Winning in the New Normal:Restaurant Brand Strategies For Growth                                         1        Tim Puli...
Agenda• 2012 Industry Outlook• Call to Action: Relevance                  Differentiation• The Four Step Plan:  -Know Your...
“May We Live inInteresting Times”            Confucius                        3
News Headlines20%                           Unemployment/Underemployment US16%                                            ...
2012 Consumer Outlook8 0ut of 10 Consumers Struggling/Getting by                           Current Financial Situation   2...
2012 Consumer OutlookOutlook for 2012 Remains Bleak               Consumer Expectations for the Economy    25%            ...
2012 Consumer OutlookThe New Normal                          - Consumers worried about economy,                           ...
2012 Restaurant OutlookTechnomic Forecasts Bottom Reached --Real growth returning (barely)                                ...
2012 Restaurant Outlook                              Real Foodservice Growth Barely Returns,                              ...
2012 Restaurant Outlook                        Over Saturation of Restaurants in U.S.                           Marketplac...
2012 Restaurant Outlook• Since 2007 most restaurant business have squeezed the  P&L, cutting food, labor, G&A and slashed ...
2012 Restaurant OutlookWinning in the New Normal RequiresRelevancy and Differentiation• So what does it take to be an outp...
Call to Action         2012 Business ChallengesConsumer Relevance   Brand Differentiation                                 ...
The Four Step Plan• The Four Step Plan:      To Insure We:-Know Your Customers                           -Gain Meaningful-...
Step 1: Know Your CustomerGet Into CustomersHeads and UnderstandWhat Makes Them Tick                                      ...
Step 1: Know Your CustomerGain Meaningful Customer Insights• How do customers feel about my brand?• What are their attitud...
Know Your Customer Example: McDonald’s knew moms disliked their food, hated the sticky white ambiance, and felt they were ...
Know Your CustomerMcDonald’s Responds to Hostage Moms • Wholesome Menu Options   •   Fresh Salads   •   Whole white meat v...
Step 2: Know Your BrandCommunicateyour brand’spt. of differenceWhy should yourbrand be chosen?                            ...
Know Your BrandBrand Building BlocksA brand lives in the        • Experiencehearts and minds of its      Aspirational + me...
Know Your BrandBrand Strategy … is the Foundation                 creates Focus & Clarity• Clearly define who  your custom...
Know Your BrandInsure Concept Fulfills Customer NeedsExample : 7 out of 10 guests are female at Mimi’s Café, acasual dinin...
Know Your BrandMimi’s Responds to Female Customer Needs:Be Gathering Place that Understands WomenMenu Innovation is focuse...
Know Your BrandSummary          • By understanding your            customers and how they            perceive and use your...
Step 3: Know Your CompetitionDefine Point of Difference vs. CompetitionStrategic Models:-SWOT Analysis-Porter Five Forces-...
Know Your CompetitionCompetitive Mapping: Define axis w/ brand insights       Example: For Shakey’s Pizza the key dimensio...
Know Your CompetitionRe-position the brand in the marketplace                                           27
Position Brand vs. Competition    Example: Reposition Shakey’s as   Family Fast Casual vs. QSR/AmusementQuality experience...
Step 4: Know Who, Why, When, Where,        and How Before Building WhatIt Is All About Integration!Translate consumer andb...
Know Who, Why, When, Where,             and How Before Building What                    Brand Positioning Statement       ...
Know Who, Why, When, Where,            and How Before Building WhatWho: (Example - Shakey’s Pizza)     •   Time pressed fa...
Know Who, Why, When, Where,            and How Before Building WhatWhy: (Example – Shakey’s Pizza)• Customers want to carv...
Know Who, Why, When, Where,          and How Before Building WhatWhen:• Weekday or Weekend  “Indoor Picnic”• Celebrate Fam...
Know Who, Why, When, Where             and How Before Building WhatWhere: (Example – Shakey’s Pizza)  •   Away from home, ...
Integrate Who, When, Where & WhenPut It All Together in a Positioning Statement  For today’s families who love pizza and w...
Positioning Drives “How” TacticsHow: All concept tactics reinforce the brand    Concept Logo,           Menu         Exter...
Positioning Drives “How” TacticsWhat: Shakey’s Pizza Parlor is Family Fast Casual         Revised Brand Logo           Fas...
Positioning Drives “How” TacticsWhat: Shakey’s Pizza Parlor is Family Fast Casual Store Design: Nod to past, look to the f...
Net: The Built Concept = The Brand                    Brand Positioning Statement              WHO / WHY / WHEN / WHERE   ...
Wrap UpThe Big Take-Aways• Focus on customer insights not just consumer trends• Clearly define your brand point of differe...
Wrap UpKeys to Success:            • Set your brand apart in a way              that is meaningful to the              cus...
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Brand strategies for growth.2012

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Tim Pulido, President & CEO with 30 years of restaurant industry experience, presents his outlook for 2012 and the brand strategies necessary to win in the New Normal.

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Brand strategies for growth.2012

  1. 1. Winning in the New Normal:Restaurant Brand Strategies For Growth 1 Tim Pulido President & CEO
  2. 2. Agenda• 2012 Industry Outlook• Call to Action: Relevance Differentiation• The Four Step Plan: -Know Your Customers -Know Your Brand -Know Your Competition -Know Who, Why, When, Where, 2 and How Before Building What
  3. 3. “May We Live inInteresting Times” Confucius 3
  4. 4. News Headlines20% Unemployment/Underemployment US16% 15.2% -Unemployment improving but stubbornly12% 9.1% high at 8.3%/Underemployment at 15.2%. 8% 5.0% 8.3% 4% 0% - December 2011 Conference Board Consumer Confidence at 64.5 is improving Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 May May May May May Sep Sep Sep Sep Sep ConsumerConfidence–US but still 37 points below 2007120100 Dec 201180 64.560 - Disposable income growth is flat4020 (Nov. 2011 -0.1%) 0 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 May May May May May May May Sep Sep Sep Sep Sep Sep Sep -Housing appears to have bottomed out – Still no real growth in sales or new builds “Are Consumers More Confident or Just Tired of Austerity?” -US debt credit downgrade + European November, 2011 sovereign debt crisis create perfect storm for equity market volatility. 4“Retailers Face Reality That Many -Net: Consumers receive mixed signals and People Can’t Trade Back Up” remain very cautious about spendingOctober 4, 2011
  5. 5. 2012 Consumer Outlook8 0ut of 10 Consumers Struggling/Getting by Current Financial Situation 20% 28% 23% 26% 56% 47% 50% 49% 24% 26% 26% 25% Dec-11 Dec-10 Dec-09 Dec-08 Struggling Getting by Living comfortably + well off 5 Source: Technomic Consumer Survey (Dec 2011)
  6. 6. 2012 Consumer OutlookOutlook for 2012 Remains Bleak Consumer Expectations for the Economy 25% 28% 21% 39% 14% 32% 34% 32% 64% 43% 38% 30% Dec-11 Dec-10 Dec-09 Dec-08 Worsen Stay the same Improve 6 Source: Technomic Consumer Survey (Dec 2011)
  7. 7. 2012 Consumer OutlookThe New Normal - Consumers worried about economy, personal finance, and their job - Practicing re-allocative budgeting: not buying on impulse, making considered trade-offs - 70% plan to spend less by trading down or reducing frequency - Want complete package of quality, experience and value when splurging Implications: - Discounting to drive traffic will onlyThe "new normal“, coined by the braintrust at the giant bond fund take you so far. Must providePIMCO, declares that the US economy quality/experience, more than price.will be at most 2% growth for - Consumer will punish brands that 7foreseeable future. The heart of theproblem is job creation. fail to deliver given “scarcity” ofNPR, July 2011 disposable income
  8. 8. 2012 Restaurant OutlookTechnomic Forecasts Bottom Reached --Real growth returning (barely) Restaurant Performance Nominal Real Segment 2011(P) 2012 (F) 2011(P) 2012 (F) Limited Service 2.5% 3.0% 0.0 0.5% Full Service 2.5% 2.5% 0.0 0.0 Total 2.5% 2.8% 0.0 0.3% Net: The economic pie is not growing. Limited discretionary income will only go to those brands that •8 have a meaningful brand and value proposition.2011 inflation: 2.5%2012 inflation: 2.5%(P)= projection (F)= forecast Source: Technomic Jan 2012
  9. 9. 2012 Restaurant Outlook Real Foodservice Growth Barely Returns, Still Far Away from “Normal” Real Growth 2007 13.% 2007 2012 3.4% 1.1%15%10% 9 5% 0%-5%-10% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Change V. 2001 Year Over Year Change (F) • Industry down 12.4 percentage points (real) from 2007
  10. 10. 2012 Restaurant Outlook Over Saturation of Restaurants in U.S. Marketplace (25 Year Trend) Number of Restaurants Restaurants have 580K 600 doubled unit counts in past 25 yearsUS Marketplace (all types)Number of Restaurants in 500 400 290K Far in excess ofin the Thousands. 300 population growth 200 Industry is over- 100 saturated: recession 0 and anemic recovery 1986 2011F will drive shake out 10 and consolidation Source: GE Capital 2011 Chain Restaurant Industry Review
  11. 11. 2012 Restaurant Outlook• Since 2007 most restaurant business have squeezed the P&L, cutting food, labor, G&A and slashed new store development• The recession and financial crisis has led to store closings, lease concessions, bank workouts and restructurings• Now there is little left on the P&L to cut. Today restaurants must find ways to grow customer traffic and develop new stores to survive.• Given over capacity, businesses must build and 11 differentiate their brands. The alternative is to close or be consolidated.
  12. 12. 2012 Restaurant OutlookWinning in the New Normal RequiresRelevancy and Differentiation• So what does it take to be an outperforming restaurant company? It is our belief that brands and concepts that are best able to develop, communicate, execute, and then continuously innovate upon their own differentiated value equation are best-positioned to outperform their peers over time…• Our collective consumer research and industry experience leads us to believe that a successful value equation stems from a solid strategic vision and often touches on some combination of consumer relevance. 12Piper Jaffray Industry Note, p. 7 January 4, 2012
  13. 13. Call to Action 2012 Business ChallengesConsumer Relevance Brand Differentiation 13
  14. 14. The Four Step Plan• The Four Step Plan: To Insure We:-Know Your Customers -Gain Meaningful-Know Your Brand Customer Insights -Communicate Your-Know Your Competition Brand’s Pt. of Difference -Translate the Brand into-Know Who, Why, When, 14 Where, and How Before all tactics Building What
  15. 15. Step 1: Know Your CustomerGet Into CustomersHeads and UnderstandWhat Makes Them Tick 15
  16. 16. Step 1: Know Your CustomerGain Meaningful Customer Insights• How do customers feel about my brand?• What are their attitudes and use of my concept?• Why do my customers behave the way they do in context of broader consumer trends? -Be brand / concept specific -Insights come from a rigorous review of research -Look for 2-3 word clarity and insight 16
  17. 17. Know Your Customer Example: McDonald’s knew moms disliked their food, hated the sticky white ambiance, and felt they were dragged there by their kids.Brand Insight: McDonald’s Had Hostage Moms 17
  18. 18. Know Your CustomerMcDonald’s Responds to Hostage Moms • Wholesome Menu Options • Fresh Salads • Whole white meat vs. mystery meat • Healthy Kids meals (Apple Dippers/Milk) • Ronald McDonald promotes exercise & fun • High Impact Store Design • Upgraded Ambiance • Adult place + kid place • McCafe: Create Mom’s Space in the Store • A Mom’s place for connection with her friends Net: Actions are Directed by 18 Customer Insight
  19. 19. Step 2: Know Your BrandCommunicateyour brand’spt. of differenceWhy should yourbrand be chosen? 19
  20. 20. Know Your BrandBrand Building BlocksA brand lives in the • Experiencehearts and minds of its Aspirational + memorable + trustworthycustomers andprospective customers. • ManagementIt is how your company is Alignment + relevanceperceived. • Identity Name + logo + color pallet + design • Brand Strategy Marketplace + Differentiation 20
  21. 21. Know Your BrandBrand Strategy … is the Foundation creates Focus & Clarity• Clearly define who your customers are, as well as their Customer Concept key wants and needs.• Ensure concept addresses identified key needs. Competition• Define concept niche 21 vs. competition The Three C’s
  22. 22. Know Your BrandInsure Concept Fulfills Customer NeedsExample : 7 out of 10 guests are female at Mimi’s Café, acasual dining concept. Women from the Red Hat Lady’sClub to the PTA congregate at Mimi’s as a place to eat freshfood and for female social connection. Key Needs: -Fresh, light meals -Portion control -Cozy ambiance -Opportunities for indulgence -Place to connect with friends 22 -Charming, whimsical ambience
  23. 23. Know Your BrandMimi’s Responds to Female Customer Needs:Be Gathering Place that Understands WomenMenu Innovation is focused against target needs • New Fresh & Fit Menu (Lower calorie/fat content) • New Just Enough (Smaller Portion) offerings • New Small Plates (Smaller Portions/Sharing Size) • Expanded Café Salads, Fish Market Menu (fresh/healthier) • New Gourmet François section (French indulgence) • New Petite Treats(smaller portion indulgence) • Expanded wine offerings (alcoholic indulgence)Marketing media selected to reach target • • Leverage social media to set brand as the place for connection for affluent, educated female guest targetRemodel package designed for women • New French Sidewalk café remodel design • New Look/New Bar/New Bakery 23 • Fresh cut flowers on every table • It is all about the charm!
  24. 24. Know Your BrandSummary • By understanding your customers and how they perceive and use your brand , you can prioritize tasks, direct innovation, design the concept, and reach your target with greater relevancy • Net, you will stand out you will be the brand that 24 “gets” their customer
  25. 25. Step 3: Know Your CompetitionDefine Point of Difference vs. CompetitionStrategic Models:-SWOT Analysis-Porter Five Forces-Competitive mapping: Understand your competitive set and determine an opportunistic niche vs. others • Get your team out into the marketplace • Examine and analyze the competition (menus, store layouts, pricing, promos, their customers) 25 • Understand how your concept is or can be different
  26. 26. Know Your CompetitionCompetitive Mapping: Define axis w/ brand insights Example: For Shakey’s Pizza the key dimensions were Kid vs. Adult and High vs. Low Quality Perception (Food/Ambience) FRIENDLY FOCUSED 26
  27. 27. Know Your CompetitionRe-position the brand in the marketplace 27
  28. 28. Position Brand vs. Competition Example: Reposition Shakey’s as Family Fast Casual vs. QSR/AmusementQuality experience for adults and fun place for kids Food first Entertainment second 28
  29. 29. Step 4: Know Who, Why, When, Where, and How Before Building WhatIt Is All About Integration!Translate consumer andbrand insights into a brandpositioning that guides everything you do that touches thecustomer.Tactics (How) work togetherto communicate the “Big Idea”of your brand 29
  30. 30. Know Who, Why, When, Where, and How Before Building What Brand Positioning Statement WHO / WHY / WHEN / WHERE HOWMenu / Layout / Store Design / Logo / Service System / Price / Uniform Integrated Brand Whole THE WHAT 30
  31. 31. Know Who, Why, When, Where, and How Before Building WhatWho: (Example - Shakey’s Pizza) • Time pressed families, especially with tweeners • Large Hispanic families are the brand’s heavy users • Groups, sports teams, schools, birthday parties • Adults on the go 31
  32. 32. Know Who, Why, When, Where, and How Before Building WhatWhy: (Example – Shakey’s Pizza)• Customers want to carve out a relaxing, fun time w/family & friends• Want to connect with family• Escape cooking/stress• Pizza is for sharing/Kids love pizza• Kids can really be kids in game room• Want good value for their money• Expect to get an emotional return for their investment of limited 32 discretionary dollars
  33. 33. Know Who, Why, When, Where, and How Before Building WhatWhen:• Weekday or Weekend “Indoor Picnic”• Celebrate Family Events• Spontaneous• After school• After the game 33
  34. 34. Know Who, Why, When, Where and How Before Building WhatWhere: (Example – Shakey’s Pizza) • Away from home, but neighborhood destination • Moms declare “kitchen is closed/Not cooking/cleaning" • Relaxing/not stuffy dine-in experience • Place where kids can be kids 34
  35. 35. Integrate Who, When, Where & WhenPut It All Together in a Positioning Statement For today’s families who love pizza and want something special for the kids, Shakey’s is the gathering place where everyone has fun.We now have a roadmap. Everything must reflect position: • Menu Innovation • Menu Design • Marketing Medium • Promotional Materials • Concept Layout and Décor 35 • Service Systems • Uniforms
  36. 36. Positioning Drives “How” TacticsHow: All concept tactics reinforce the brand Concept Logo, Menu Exterior Store Customer Uniforms, Element Brand colors, Layout, Design, Interior Flow, Crew Brand icon, Design, Decor,Materials Service Training, Offerings, Lighting. System Manage Concept Pricing Seating, ment Descriptor, Color Palette SelectionPositioning Site CriteriaWhoWhyWhen 36Where
  37. 37. Positioning Drives “How” TacticsWhat: Shakey’s Pizza Parlor is Family Fast Casual Revised Brand Logo Fast Casual Menu Layout vs. QSR 37 Raise Quality with Gourmet Pizzas Fresh Tossed Salads for Mom
  38. 38. Positioning Drives “How” TacticsWhat: Shakey’s Pizza Parlor is Family Fast Casual Store Design: Nod to past, look to the future Uniforms: Quality, Not Fast Food 38 Fast Casual Service System Games in back room. Not in your face
  39. 39. Net: The Built Concept = The Brand Brand Positioning Statement WHO / WHY / WHEN / WHERE HOWMenu / Layout / Store Design / Logo / Service System / Price / Uniform Integrated Brand Whole THE WHAT Relevant, Consistent, and Differentiated Brand Experience 39
  40. 40. Wrap UpThe Big Take-Aways• Focus on customer insights not just consumer trends• Clearly define your brand point of difference -Versus customer needs and competition• Define brand positioning so all tactics will communicate the big idea• The Four Steps: 1. Know your customer 2. Know your brand 3. Know your competition 40 4. Know who, why, when, where, and how before building what
  41. 41. Wrap UpKeys to Success: • Set your brand apart in a way that is meaningful to the customer • Make sure everything you do (The How) reinforces and communicates your point of difference 41 • It’s all about relevancy and differentiation
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