Basics of Marketing

Introduction

Marketing is like the megaphone for a business. It helps tell people what's special about your food truck, from your mouth-watering menu to your unique style. It is all about connecting your food truck's offerings with customers. It's figuring out what they want and showing them how your dishes meet those desires.

Marketing Objectives

• Increase Awareness: Letting people know your food truck exists.
• Boost Sales: Getting more customers to order your food.
• Build Brand Identity: Creating a unique image that customers recognize and love.
• Customer Engagement: Interacting with customers to keep them interested and get feedback.

Marketing Functions

• Research: Understanding what customers like and where to find them.
• Promotion: Using ads, social media, or events to spread the word.
• Sales: Turning interested people into customers who buy.
• Customer Service: Keeping customers happy after they've ordered.

Marketing Philosophies

• Product Orientation: Focusing on making the best dishes, believing that quality alone will attract customers.
• Sales Orientation: Putting the main effort into convincing people to buy, even if it means heavy advertising.
• Market Orientation: Understanding customer wants and needs first, then creating the menu based on that.
• Societal Orientation: Considering customer wants, society's well-being, and the truck's profit when planning the menu—like offering sustainable or healthy options.

Demand and Supply

Factors Influencing Demand and Supply

• Demand Factors:
  • Price: If your prices are high, fewer people might order.
  • Trends: Being featured on a popular food blog could boost demand.
  • Season: Warm weather might increase demand for your outdoor food truck.
• Supply Factors:
  • Cost of Ingredients: A rise in prices might limit how much you can cook.
  • Equipment: A new grill could increase how many dishes you can prepare.
  • Staffing: More skilled cooks can mean more food ready to serve.

Interactions Between Demand, Supply, and Price

Imagine your food truck sells a special burger that becomes a hit. Demand goes up, meaning more people want it than you have prepared.

• If you keep the price the same, you might run out fast because everyone wants to try it.
• If you increase the price, fewer people might buy it, but you won't run out as quickly, and you could make more money.
• If you increase your supply by getting more ingredients and maybe another grill, you can meet the demand without raising prices.

Understanding the balance between demand, supply, and price helps you make smart decisions for your food truck, ensuring you can satisfy your customers without overspending or running out of food.

Marketing and Elasticity

Think of elasticity of demand like a rubber band. Some things stretch a lot when you pull on them (high elasticity), and some things hardly stretch at all (low elasticity). In the world of selling products, like in a food truck business, elasticity tells us how much the demand for something changes when its price or how much money people have changes, or when it's promoted differently.

• Price Elasticity: If you raise the price of your best-selling taco, will you sell a lot fewer, or will most customers keep buying it? If sales drop a lot, the demand is "elastic" because it's sensitive to price changes. If sales don't change much, it's "inelastic."
• Income Elasticity: This shows if people buy more or less of something when their income changes. If families have more money and buy a lot more gourmet burgers from your food truck, those burgers have high income elasticity.
• Promotional Elasticity: This tells us how much more you can sell by advertising or running promotions. If a special deal on drinks brings in many more customers, the demand for your drinks has high promotional elasticity.

Calculating Elasticity

Calculating elasticity involves looking at how much the quantity demanded of your product changes in response to price changes, income changes, or changes in promotion efforts. The formula involves percentages and can get a bit tricky, but it essentially measures the percentage change in quantity demanded divided by the percentage change in price, income, or promotional spending.

Interpretation of Elasticity Results

• High elasticity means customers are sensitive to changes (like price hikes or more money in their pockets).
• Low elasticity means they're not as sensitive (they'll buy pretty much the same amount no matter what).

The Impact of Elasticity Measures on Business Decisions

Understanding elasticity helps you make smart choices for your food truck. If your signature dish is price elastic, you might lose customers if you raise the price. But if it's inelastic, a small price increase could boost your profits without reducing sales much.

Limitations of the Concept of Elasticity

Elasticity isn't perfect. It assumes other things don't change, like competitors' prices or how much people want your product. It's a helpful tool, but it's not the only thing to consider when making decisions.

Linking Marketing Objectives with Corporate Objectives

Your food truck's marketing objectives (like increasing brand awareness or boosting sales of a new menu item) should always support the bigger picture goals of your business (like becoming the number one food truck in your city). Every marketing plan or promotional campaign should be designed not just to sell more in the short term but to build your business and brand for long-term success.

Understanding Markets

How Markets May Differ

Markets are places where goods or services are exchanged. They can be as vast as the internet or as small as your local farmers' market. Here's how they can differ:

• Consumer Markets vs. Industrial Markets: Consumer markets are where businesses sell goods or services directly to people like you and me. Think of your local grocery store or a food truck. Industrial markets, on the other hand, are where businesses sell goods or services to other businesses, like a company selling ingredients to a food truck.
• Local, National, and International Markets: A local market serves a specific community or area, like a food truck operating in a neighborhood. National markets cover a whole country, and international markets go beyond national borders, like a food truck brand expanding to multiple countries.

Product Orientation vs. Customer (Market) Orientation

• Product Orientation: This approach focuses on the product itself. The business believes in making the best possible product, thinking that quality alone will attract customers. For example, a food truck might focus solely on creating the most authentic Mexican tacos, assuming that the tacos' authenticity will bring in customers.
• Customer Orientation: Here, the focus is on the customers' needs and wants. The business shapes its products and services around what the customers prefer. If a food truck notices that customers in its area prefer vegan options, it might start offering vegan tacos.

Measurement of Market Share and Market Growth

• Market Share: This is a measure of how much of the market a business or product owns compared to competitors. For a food truck, having a 25% market share in the local food truck market means 25% of food truck sales in the area come from it.
• Market Growth: This refers to how much the overall market is expanding. If more people are eating at food trucks this year compared to last, the food truck market is growing.

The Implications of Changes in Market Share and Market Growth

• Changes in Market Share: If a food truck's market share increases, it's doing well compared to its competitors. It might mean more customers prefer their food, or they've successfully expanded their menu. A decrease might signal problems or increased competition.
• Changes in Market Growth: If the market is growing, there's a larger customer base, and a food truck might expand or try new marketing strategies. If the market is shrinking, the food truck might need to innovate or find new ways to attract customers.

Consumer and Industrial Marketing

The Classification of Products

Products can be divided into two main categories: consumer products and industrial products.

• Consumer Products: These are goods or services bought by individuals for personal use. Think of anything you might buy for yourself or your home, like snacks from a food truck, a new phone, or a pair of sneakers.
• Industrial Products: These items are purchased by businesses for use in producing other goods, providing services, or for general business operations. This could be the ingredients a food truck buys to make their dishes, the ovens they cook with, or the software they use to manage bookings.

B2C Vs B2B Marketing

The approach to marketing depends on whether you're selling directly to consumers (B2C) or to other businesses (B2B).

• B2C Marketing:
  • Emotional Appeal: B2C marketing often focuses on creating an emotional connection with the consumer. For a food truck, this might involve highlighting the experience of eating their food, such as the joy of sharing a meal with friends.
  • Brand Awareness: It's important for B2C companies to make their brand recognizable and memorable to consumers. A food truck might use bright colors and a catchy name to stand out.
  • Wider Audience: Consumer marketing targets a broad audience since many people could be potential customers. Social media and local events are effective channels for reaching out.
• B2B Marketing:
  • Relationships and Trust: B2B marketing focuses on building long-term relationships and trust. A food truck that caters corporate events would emphasize their reliability and professionalism to business clients.
  • Detailed Information: Businesses need detailed information before making a purchase. A food truck selling wholesale might provide extensive details about their ingredients, preparation methods, and delivery logistics.
  • Niche Targeting: B2B markets are usually more niche. A food truck might specifically target businesses in the event planning or hospitality industry, using trade publications or industry events to reach them.

For a Food Truck Business

A food truck entrepreneur needs to understand these differences to effectively market their products. If they're selling directly to customers at a park or event, they'll focus on B2C marketing strategies like creating an appealing brand and engaging with customers on social media. They might highlight the freshness of their ingredients, the uniqueness of their recipes, or the fun atmosphere of ordering from their truck.

If the food truck also caters events or sells products wholesale to local cafes or businesses, they'll employ B2B marketing tactics. This could involve developing professional brochures, offering taste tests for event planners, or attending trade shows related to the hospitality industry.

Marketing Strategies

Niche Marketing

• What It Is: Focusing on a specific group of customers who have unique preferences and needs.
• Benefits:
  • Specialized Appeal: Like a food truck that only sells gluten-free treats, targeting a specific customer base can create loyal followers.
  • Less Competition: Serving a unique market means fewer businesses are competing for the same customers.
• Limitations:
  • Limited Growth: Since the target market is small, there might be a cap on how much your business can grow.
  • Risk of Changes: If the niche market's preferences change, the business might struggle.

Mass Marketing

• What It Is: Aiming to reach as many people as possible, regardless of their specific preferences.
• Benefits:
  • Large Audience: Like a food truck that offers a little bit of everything, you can appeal to a wide variety of customers.
  • Potential for High Sales: More customers mean more potential sales.
• Limitations:
  • High Competition: Trying to reach everyone puts you in competition with many other businesses.
  • Less Personalization: It's hard to please everyone, and some customers might feel your business lacks a personal touch.

Customer Relationship Marketing (CRM)

The Aims of CRM

CRM is all about building and maintaining relationships with your customers. The goal is to make customers feel valued and connected to your food truck, encouraging loyalty and repeat business.

Costs and Benefits of CRM

• Benefits:
  • Improved Customer Loyalty: When customers feel connected to your food truck, they're more likely to come back and even recommend you to friends.
  • Better Communication: CRM tools can help you understand what your customers like and dislike, allowing you to tailor your menu and service accordingly.
  • Increased Sales: Happy, loyal customers tend to spend more over time.
• Costs:
  • Upfront Investment: Setting up CRM systems, like software for tracking orders and customer preferences, can be expensive.
  • Time and Effort: Building real relationships with customers takes time and consistent effort, like responding to feedback and remembering regulars' favorite orders.

Market Research

Imagine you're planning a journey to a place you've never visited. You'll probably look up maps, check the weather, and ask friends who've been there what to expect. Market research in the business world is similar. It's like the homework you do to understand where your food truck fits into the larger market. It involves collecting information about who might buy your food, what other food trucks are doing, and what trends are popular.

Importance of Market Research

Knowing the lay of the land is crucial before starting any venture:

• Reduces Risks: Just as you'd check the weather before an outdoor event, market research helps you avoid costly mistakes.
• Identifies Opportunities: Like finding a popular spot with lots of foot traffic for your food truck, market research shows you where the best opportunities lie.
• Understands Customers: It's like knowing exactly what your friends want for lunch. Market research tells you what your customers crave.

Process of Market Research

1. Setting Objectives: Decide what you need to know. For a food truck, you might want to understand what street food is trending.
2. Collecting Data:
   • Primary Research: This is first-hand information. Think of it as going out and asking people what they think about your menu ideas.
   • Secondary Research: This involves looking at information that already exists, like food trend reports or sales data from other food trucks.
3. Analyzing Data: It's like going through your recipe notes to figure out which dish was a hit at the last event and why.
4. Making Decisions: Based on what you've learned, you might decide to add a new item to your menu or try a different location.

Identifying Main Features of a Market

• Market Size: How big is the potential market for your food truck? Is it a niche market or a broad one?
• Market Growth: Is the demand for food trucks increasing? Are more people looking for gourmet street food?
• Competitors: Who else is serving food in your area? What are they offering, and how can you differentiate your truck?

Identifying Customer and Consumer Characteristics

• Customer Profiles: These are detailed descriptions of your ideal customers. For a food truck, it might include office workers looking for quick lunch options or families seeking a fun dinner experience.
• Wants and Needs: Understanding what drives your customers. Do they value speed and convenience, or are they looking for a unique culinary experience?

Market-Orientated Businesses

Market-orientated businesses are like chefs who taste their dishes while cooking, adjusting the recipe based on feedback to make sure the final meal is delicious. These businesses use market research to understand customers' tastes and preferences, ensuring their products or services hit the spot.

Primary Research and Secondary Research

• Primary Research:
  • What It Is: Collecting new data directly from sources.
  • Benefits: Tailored specifically to your needs, offering up-to-date and relevant information.
  • Limitations: Can be time-consuming and expensive to collect.
  • Examples: A food truck might use an online survey to ask customers what new menu items they'd like to see.
• Secondary Research:
  • What It Is: Analyzing data that has already been gathered by someone else.
  • Benefits: Less expensive and quicker to access than primary research.
  • Limitations: Might not be as specific or relevant to your exact needs.
  • Examples: A food truck owner might review online articles or government sources to learn about food safety regulations.

Methods of Primary Research

• Postal Questionnaire: Sending out questions by mail.
  • Pros: Can reach a wide audience.
  • Cons: Low response rates.
• Online Survey: Using digital platforms to gather feedback.
  • Pros: Quick and can reach many people.
  • Cons: Might not represent all customer groups.
• Interviews: One-on-one discussions.
  • Pros: In-depth information.
  • Cons: Time-consuming.
• Focus Groups: Group discussions led by a moderator.
  • Pros: Detailed feedback.
  • Cons: Can be influenced by group dynamics.

The Need for Sampling

Sampling means selecting a portion of the population to represent the whole. It's necessary because it's impractical to gather data from everyone. However, sampling can have limitations, such as not accurately representing the entire population's views.

Methods of Secondary Research

• Online: Searching the internet for information.
• Government Sources: Accessing public data provided by government agencies.
• Commercial Market Research Reports: Buying reports from market research companies.

Usefulness of Data Collected

The data collected from both primary and secondary research can provide valuable insights into customer preferences, market trends, and competitive analysis, helping businesses make informed decisions.

Factors Influencing the Accuracy of Market Research Data

• Sample Size and Selection: How many people are surveyed and whether they represent the target market can impact accuracy.
• Question Design: Poorly worded questions can lead to misunderstood responses.
• Research Bias: The researcher's expectations can influence the study's outcome.