1. Frank Rainsford has been, in effect, the CEO of Frank’s All-American BarBeQue since its inception. His major role has been that of restaurant manager, receiving support from his assistant manager Ed Tobor for the last fourteen years. Frank has two children, a son and daughter, who both worked in the restaurant as teenagers. His daughter has worked periodically at the restaurant since she graduated from high school. Frank’s son, who recently lost his job, has returned to work for his father. The son produced several plans to expand the business, including the opening of a second restaurant and the extensive use of social media. After careful consideration, Frank has decided to open a second restaurant, but this has presented him with a major problem—how to assign responsibilities to personnel. His son wants to be designated the restaurant manager of the second restaurant and made the vice president of marketing. Ed Tobor also wants to be the manager of the new restaurant. His daughter has expressed an interest in being the manager of either restaurant. How should Frank resolve this problem?
2. One night after the restaurant had closed, Frank Rainsford sat down with his son, Robert. Frank had finished reading his son’s business plan for a third time. Robert sensed that his father had some sort of reservations. “What’s the matter, Dad? Didn’t you like the plan?” Frank paused and said, “Bobby, from a technical standpoint I think you have done a very, very credible job, but you are right. I do have some concerns.” Disappointed, Robert asked his father to lay out his concerns. Frank told him that opening another restaurant was a huge and expensive undertaking. He knew that Robert understood the financial risks, but he was not sure that his son understood the problems associated with getting people to come to a new restaurant. Frank was straightforward and told his son, “I have been at this for thirty-plus years. It took me years to build up my client base. I really know my customers and what they like. Up until this year the only marketing I did was flyers and a few ads in the local paper and the church bulletin. How are we going to understand our customers at the new location? We are going to have to fill it up quickly if we are to pay the bills. I know I’ve had some good success with selling the sauces during the last few years, but remember that I’m selling them from Harry’s grocery store. His customers already know me and my product. Your plans for ramping up sauce sales are great, but again, how are we going to get people to know who we are and interested enough to by a six dollar bottle of barbecue sauce?” Frank went on to tell his son that he knew that Robert was extremely knowledgeable about marketing and the use of the Internet. He reminded Robert that he had given him a greatly enlarged marketing budget in 2010. If you were Robert, how would you go about alleviating your father’s concerns? (You may want to consult Chapter 16 "Appendix: A Sample Business Plan" and review Robert’s business plan for a new restaurant.) Answer the question from a marketing perspective.
3. Locate the average values of these values for the restaurant industry and comment on how well or poorly Frank’s All-American BarBeQue appears to be doing with respect to the industry.
1. In the given case scenario, Frank Rainsford, the CEO of his BarBeQue restaurant had Ed Tobor as an assistant manager for the last fourteen years. Evidently, he qualifies for the post of manager at Frank’s new restaurant as he has gained exquisite experience. Also, he knows the business inside out as he has worked for Frank as a substantial support. Frank’s children have been away while Robert was working for another organization and not at the restaurant. He holds a BS degree in marketing and lost his job after which he decided to contribute to his father’s business. Frank’s daughter Susan worked at his restaurant as a teenager during summer vacations. It is observed that both the kids, Robert and Susan want to be designated as the manager of Frank’s new restaurant. Under functional organizational structure, the organization has different groups or functional areas such as marketing, operations and others (Karatepe and Kilic 2015). Ed Tobor who has contributed his fourteen years expresses his interest in being the manager of either restaurant. It is argued that Ed Tobor knows the business inside out and must be made the manager at the new restaurant. In a new restaurant, Frank requires a qualified professional who could successfully delegate tasks to the personnel. Susan must be made the assistant restaurant manager where she can gain experience and qualify for a higher position. Robert must be made the vice president of marketing that would help Frank’s All-American BarBeQue in reaching new levels (Martin et al. 2012).
2. As stated in the given scenario, Frank is concerned about the marketing standards for attracting customers at the new location of restaurant at Connecticut. So far, the customers at the previous location have known Frank’s product at Harry’s grocery store. However, from the marketing perspective, Frank needs to be explained about Robert’s business plan. Frank needs to understand that thirty years back when he started the business of selling sauces, he needs to compete through the modern methods of communication. Robert must enlighten Frank with the benefits of internet and web marketing. For selling the sauce at six dollar per bottle, the advertisements can overcome the barriers of reach through internet. Online marketing shall also help in targeting the suburban population where the market needs to be divided into various demographic regions (Annunziata and Vecchio 2013). The customers can express their concerns or interests which can be addressed by Robert at a later stage. The ease of marketing through internet is enhanced as the products can be browsed at any time. The details of the products can be viewed by the customers without having them visit the store. Campaigns may be generated for attracting the customers. Internet is a platform for building relationship with the customers which would also help in improving retention. Emails can be made to customers for maintaining relationships using personalized offers. Robert must further explain about the tracking results for growth, leads and sales conversions from the marketing search campaigns (Hidayanto et al. 2012)
3. There are different values which can be used to measure the wellness of Frank’s All-American BarBeQue restaurant with respect to the restaurant industry. They are:
Asset Approach- According to the asset approach, the method seeks to determine the business value on the basis of valuation of assets. It is analyzed that Frank’s business is doing well because the long-term assets have a fair value. Also, the company has substantial cash, inventory and other assets to maintain a positive balance (Wu 2013).
Market Approach- The market approach or the pricing multiples help in determining potential selling price, revenue or profits. According to the market analysis, the potential customers have a significant market share when it comes to buying sauces. Frank is doing well as the barbecue food is served at a reasonable price and is sold in a family-friendly manner (Ha and Jang 2013).
Income Approach- This approach helps in determining the value of a business based on the ability for generating desired economic benefit for the owners. This approach helps in determining the business value as a function of profitability or economic benefit. Based on the data and figures given in the case study, both 2009 and 2010 were crucial for the restaurant industry. There would be stiff price competition and the level of personal income was estimated to grow in both 2011 and 2012. Therefore, the value in terms of income approach falls on the positive side as the people shall spend for eating at Frank’s restaurant or buying the barbecue sauce (Ha & Jang 2013).
Annunziata, A. and Vecchio, R., 2013. Web marketing strategies of food producers in Italy: a competitive analysis. International Journal of Internet Marketing and Advertising, 8(1), p.1.
Ha, J. and Jang, S., 2013. Attributes, consequences, and consumer values. International Journal of Contemporary Hospitality Management, 25(3), pp.383-409.
Hidayanto, A., Adha, M., Jiwanggi, M. and Melia, T., 2012. A study of impact of search engine optimisation to internet marketing strategy. International Journal of Services, Economics and Management, 4(4), p.298.
Karatepe, O. and Kilic, H., 2015. Does Manager Support Reduce the Effect of Work–Family Conflict on Emotional Exhaustion and Turnover Intentions?. Journal of Human Resources in Hospitality & Tourism, 14(3), pp.267-289.
Martin, R., Mu?ls, M., de Preux, L.B. and Wagner, U.J., 2012. Anatomy of a paradox: Management practices, organizational structure and energy efficiency. Journal of Environmental Economics and Management, 63(2), pp.208-223.
Wu, H., 2013. An Empirical Study of the Effects of Service Quality, Perceived Value, Corporate Image, and Customer Satisfaction on Behavioral Intentions in the Taiwan Quick Service Restaurant Industry. Journal of Quality Assurance in Hospitality & Tourism, 14(4), pp.364-390.