Marketing at a crossroads
24 February, 2012
One of the most significant changes in the eating and drinking out market in recent times has been the growing importance of and emphasis on marketing within restaurant and pub groups, writes Peter Martin. But questions remain of how it really fits into the business model.
As brands have embedded themselves and competition for consumer spend has intensified, so too has the recognition that the market needs to become better and more professional at understanding consumer needs and desires, positioning offers and communicating effectively with the public through an increasing array of media.
That is no better demonstrated than by the growing attendance at our own annual Peach Marketing & Consumer Insight seminar. Interest increased so much last year that we had to move to a larger venue, and this year’s event on March 22 will be no less popular.
Customer feedback, loyalty schemes, social media strategies and mobile marketing have all become topics of everyday conversation across the sector.
So it was with some surprise that this year’s Peach Report Business Leaders’ Survey (see Peach Report magazine, February/March) suggested that marketing might be slipping down the corporate agenda.
Every year we ask senior executives where they will be investing management time and focus in the coming year. Last year, marketing came in second place behind staff training. This year it had slipped down to fourth equal, behind not just staff training (the clear leader), but ‘service levels’ and ‘food quality’, and was equal with ‘menu development’. Also, the percentage of leaders giving it focus dropped from 80% to 64%.
There is a clear shift towards what might be seen as front-line in-store priorities, and it is true that many bosses would like to cut-back on certain marketing activities, like discounting and promotions.
The confusing element in this is that marketing remains the discipline that companies most lack confidence in. When asked which areas executives believe they are either market leaders or market laggers, marketing and consumer research come bottom of the list for leadership. Overall, 37% of bosses say they are behind the market average when it comes to marketing expertise.
All this comes at the same time as two major players, Mitchells & Butlers and Novus Leisure, have announced major shake-ups in their marketing and insight teams.
The arguments for both restructuring moves are to put marketing closer to the front-line and align it more closely with operations. The logic is absolutely right.
Marketing and operations should be one and the same thing – they need to work hand-in-glove to be really effective. The product is, after all, the customer experience that is delivered in individual pubs, restaurants and stores day after day. A company’s most important and influential sales and marketing people are likely to be their front-line teams.
The fact that ‘past experience’ is such an important factor in how consumers choose where to eat or drink out, as our own Peach BrandTrack research underlines, is evidence in itself. Some 30% of customers say it is ‘extremely important’ in making that choice, only just less than value-for-money.
Aligning marketing and operations more closely and integrating marketing disciplines within day-to-day operations may be a real game-changer for companies and a mark that effective marketing is now core to business success.
The big criticism of even the best operations teams is that they can sometimes be too reactive or pragmatic in the face of changing sales patterns or perceived customer tastes. Marketing can provide that strategic brand framework – especially important as that same Business Leaders Survey reveals that providing ‘a clearly differentiated offer’ and ‘strong brand identify’ are the top two operational challenges for directors this year.
Likewise, an operational focus will keep marketers in touch with the day-to-day realities of the business.
The danger would be in letting one discipline dominate the other. This is no time to lose or downgrade marketing expertise – because marketing is only getting more difficult.
It is perhaps telling that our business leaders also tell us that five of the top six most important means of driving sales this year will be digital – namely their own websites, email marketing, social media, online reservations and mobile marketing, with the latter showing the biggest leap in importance since last year.
These are require skills not intrinsic to the eating and drinking-out market. That’s the challenge.
A version of this article also appears in the February/March 2012 issue of Peach Report magazine