Evaluate Rosa’s past and present marketing strategy. What should she do now? Should she seriously consider joining some franchise chain?

Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
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CASE STUDY: BESTTI’S RESTAURANT

SUBJECT: Operations Management

QUESTIONS:

  1. Evaluate Rosa’s past and present marketing strategy.
  2. What should she do now?
  3. Should she seriously consider joining some franchise chain?
By April 2010, the situation had begun to improve, and by June her weekly gross was up
to between $3,100 and $3,300. By March 2011, the weekly gross had risen to about
$4,200. Rosa increased the working hours of her staff six to seven hours a week and
added another cook to handle the increasing number of customers. Rosa was more
optimistic for the future because she was finally doing a little better than breaking even.
Her full-time involvement seemed to be paying off. She had not put any new money into
the business since summer 2010 and expected business to continue to rise. She had not
yet taken any salary for herself, even though she had built up a small surplus of about
$9,000, instead, she planned to put in a bigger air-conditioning system at a cost of $5,000
and was also planning to use that salary she might have taken for herself to hire two new
waitresses to handle the growing volume of business. And she saw that if business
increased much more she would have to add another cook.
1. Evaluate Rosa's past and present marketing strategy.
2. What should she do now?
3. Should she seriously consider joining some franchise chain?
Transcribed Image Text:By April 2010, the situation had begun to improve, and by June her weekly gross was up to between $3,100 and $3,300. By March 2011, the weekly gross had risen to about $4,200. Rosa increased the working hours of her staff six to seven hours a week and added another cook to handle the increasing number of customers. Rosa was more optimistic for the future because she was finally doing a little better than breaking even. Her full-time involvement seemed to be paying off. She had not put any new money into the business since summer 2010 and expected business to continue to rise. She had not yet taken any salary for herself, even though she had built up a small surplus of about $9,000, instead, she planned to put in a bigger air-conditioning system at a cost of $5,000 and was also planning to use that salary she might have taken for herself to hire two new waitresses to handle the growing volume of business. And she saw that if business increased much more she would have to add another cook. 1. Evaluate Rosa's past and present marketing strategy. 2. What should she do now? 3. Should she seriously consider joining some franchise chain?
CASE NUMBER 8:
BESTTI'S RESTAURANT
possible locations before finally deciding on the present one. Rosa explained: "I looked
everywhere, but here 1 particularly noticed the heavy traffic when į first long at it. This is
Rosa Bestti, the oyper and manager of Bestti's Restaurant, is reviewing the show growth
the crossroads for three major interstate highways. So obviously the potential is here.
of her restaurant. She's also thinking about the future and wondering if she should change
her strategy. In particular, she is wondering if she should join in fast-food or family
Having decided on the location, Rosa signed a 10-year lease with option to renew for 10
restaurant franchise chain. Several are located near her, but there are many franchisors
more years, and then eagerly attacked the problem of outfitting the almost empty store
without local restaurant. After doing some research on the internet, she has learned that
space in the newly constructed building. She tiled the floor, put in walls of suriwood.
with help from the franchisor, some of these places gross $500,000 to 1 million a year. Of
installed plumbing and electrical fixtures and extra washroom, and purchased the
course, she would have to follow someone else's strategy and thereby lose her
necessary restaurant equipment. All this cost $120,000-which came from her own cash
independence, which she doesn't like to think about. But those sales figures do sound
savings. She then spent an additional $1,500 for glassware, S2,000 for an initial food
good, and she also heard that the return to the owner-manager (including salary) can be
stock, and $2,125 to advertise the opening of Besitti's Restaurant In the local newspaper.
over $150,000 per year. She has also considered putting a web page for Besitti's
The paper serves the whole metro area, so the $2,125 bought not three guatter-page ads.
Restaurant on the internet but is not sure how that will help.
These expenditures also came from her personal savings. Next she hired five waitresses
at $275 a week and one chef $550 a week. Then, with a $24,000 cash reverse for the
Bestis Restaurant is a fairly large restaurant-about 3,000 square feet-located in the
business, she was ready to open. Reflecting her sound business sense, Rosa knew she
center of a small shopping center completed early in 2009. Besti's sell mainly full-course
would need a substantial cash reverse to fall back on until the business got on its feet.
"home-cooked" Italian-style dinners (no bar) at moderate prices. In addition to Besttis
She expected this to take about one year. She had no expectations of getting rich
Restaurant, other business in the shopping center include a supermarket, a hair salon, a
overnight. (Her husband, a high school teacher, was willing to support the family until the
liquor store, a video rental store, and a vacant space that used to be a hardware store.
restaurant caught on.)
The hardware store failed when a Home Depot located nearby. Rosa has learned that a
pizzeria is considering locating there soon. She wonders how that competition will affect
The restaurant opened in April and by August had a weekly gross revenue of only $2,400.
her. Ample parking space is available at the shopping center, which located in a
Rosa was a little discouraged with this, but she was still able to meet all her operation
residential section of a growing suburb to the east, along a heavily travelled major traffic
expenses without investing any new money in the business. She also got a few good
route.
customer reviews on Yelp. By September business was still slow, and Rosa had to invest
an additional $3,000 in the business just to survive.
Rosa graduated from a local high school and a nearby university and has lived in this
town with her husband and two children for many years. She has been self-employed in
Business had not improved in November, and Rosa stepped up her advertising-hoping
the restaurant business since her graduation from college in 1994. Her most recent
this would help. In December, she spent $1,200 of the cash reserve for radio advertising-
venture before opening Bestüs was a large restaurant that she operated successfully
10 late-evening spots on a news program at station that aims at middle-income America.
with her brother from 2000 to 2006. In 2006, Rosa sold out her share because of illness.
Rosa also spent $1,600 more during the next several weeks for some metro newspaper
ads.
Following her recovery, she was anxious for her something to do and opened the present
restaurant in April 2009. Rosa feels her plans for the business and her opening were well
thought out. When she was ready to start her new restaurant, she looked at several
Transcribed Image Text:CASE NUMBER 8: BESTTI'S RESTAURANT possible locations before finally deciding on the present one. Rosa explained: "I looked everywhere, but here 1 particularly noticed the heavy traffic when į first long at it. This is Rosa Bestti, the oyper and manager of Bestti's Restaurant, is reviewing the show growth the crossroads for three major interstate highways. So obviously the potential is here. of her restaurant. She's also thinking about the future and wondering if she should change her strategy. In particular, she is wondering if she should join in fast-food or family Having decided on the location, Rosa signed a 10-year lease with option to renew for 10 restaurant franchise chain. Several are located near her, but there are many franchisors more years, and then eagerly attacked the problem of outfitting the almost empty store without local restaurant. After doing some research on the internet, she has learned that space in the newly constructed building. She tiled the floor, put in walls of suriwood. with help from the franchisor, some of these places gross $500,000 to 1 million a year. Of installed plumbing and electrical fixtures and extra washroom, and purchased the course, she would have to follow someone else's strategy and thereby lose her necessary restaurant equipment. All this cost $120,000-which came from her own cash independence, which she doesn't like to think about. But those sales figures do sound savings. She then spent an additional $1,500 for glassware, S2,000 for an initial food good, and she also heard that the return to the owner-manager (including salary) can be stock, and $2,125 to advertise the opening of Besitti's Restaurant In the local newspaper. over $150,000 per year. She has also considered putting a web page for Besitti's The paper serves the whole metro area, so the $2,125 bought not three guatter-page ads. Restaurant on the internet but is not sure how that will help. These expenditures also came from her personal savings. Next she hired five waitresses at $275 a week and one chef $550 a week. Then, with a $24,000 cash reverse for the Bestis Restaurant is a fairly large restaurant-about 3,000 square feet-located in the business, she was ready to open. Reflecting her sound business sense, Rosa knew she center of a small shopping center completed early in 2009. Besti's sell mainly full-course would need a substantial cash reverse to fall back on until the business got on its feet. "home-cooked" Italian-style dinners (no bar) at moderate prices. In addition to Besttis She expected this to take about one year. She had no expectations of getting rich Restaurant, other business in the shopping center include a supermarket, a hair salon, a overnight. (Her husband, a high school teacher, was willing to support the family until the liquor store, a video rental store, and a vacant space that used to be a hardware store. restaurant caught on.) The hardware store failed when a Home Depot located nearby. Rosa has learned that a pizzeria is considering locating there soon. She wonders how that competition will affect The restaurant opened in April and by August had a weekly gross revenue of only $2,400. her. Ample parking space is available at the shopping center, which located in a Rosa was a little discouraged with this, but she was still able to meet all her operation residential section of a growing suburb to the east, along a heavily travelled major traffic expenses without investing any new money in the business. She also got a few good route. customer reviews on Yelp. By September business was still slow, and Rosa had to invest an additional $3,000 in the business just to survive. Rosa graduated from a local high school and a nearby university and has lived in this town with her husband and two children for many years. She has been self-employed in Business had not improved in November, and Rosa stepped up her advertising-hoping the restaurant business since her graduation from college in 1994. Her most recent this would help. In December, she spent $1,200 of the cash reserve for radio advertising- venture before opening Bestüs was a large restaurant that she operated successfully 10 late-evening spots on a news program at station that aims at middle-income America. with her brother from 2000 to 2006. In 2006, Rosa sold out her share because of illness. Rosa also spent $1,600 more during the next several weeks for some metro newspaper ads. Following her recovery, she was anxious for her something to do and opened the present restaurant in April 2009. Rosa feels her plans for the business and her opening were well thought out. When she was ready to start her new restaurant, she looked at several
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