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Note: This is only fictional case.
The Alabang Outlet of RESTO A has been experiencing very low sales particularly during weekends. The president has asked the operations director, branch manager and marketing manager for a meeting.
1. Situation Analysis/Investigation
1.1. Problem Definition
Very low sales of RESTO Afs Alabang branch especially during weekends.
1.2. Problem Diagnosis
In comparison to other restaurants, the problem of RESTO A is very unusual. It is generally expected that sales during the weekends would be higher than the outputs during weekdays.
1.3. Objective Identification
The meeting called upon by the president aims to address this problem through the conduct of a meeting with the operations manager, branch manager and marketing manager to improve sales output and save the branch from a possible closure or bankruptcy.
2. Developing Alternatives
In developing alternatives, brainstorming is one way/method of doing so, for the formulation of creative solutions to problems.
2.1. The Brainstorming Process
Since the problem had already been defined, which is the low sales output of RESTO A, the participants in the brainstorming process must first analyze the possible cause or causes of this problem.
The restaurant offers a limited variety of products.
The price of their products is less competitive in comparison to other restaurants in the area.
The company may be located in a less accessible area.
There is low product awareness.
Criteria for selecting possible solutions for the problem
The solution must increase the companyfs sales during especially during the weekend.
The solution must facilitate product awareness and acceptance.
The solution must increase the companyfs share in the market (for Alabang branch).
The solution must maximize returns at the least cost.
The solution must be SMART (Specific, Realistic, Attainable and Time bound).
3. Evaluation of Alternatives
Possible Solutions and their respective scores on the basis of the given criteria (0 – being the lowest and 5 – highest):
Solution 1: Closure/Discontinuance of Operations
If after feasibility study and it is proven that the company would continue to experience low sales for a very long period. The company must already close the branch to maximize their profit.
Despite the fact that this will minimize the companyfs opportunity losses, the solution is very drastic and is very pessimistic.
Solution 2: Product Variation
The company may have variations on their present products that will cater to the taste of the customers in the area (Alabang). Examples of these are seasonal offers.
Score = 4
This SMART solution will help increase the companyfs market share if it will be able attract other customers targeted by their product variance.
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Solution 3: Sales Promotion and Advertisement
Sales promotion refers to the provision of incentives to customers or to the distribution channel to stimulate demand for a product. Like product combos/group packages, VIP discount cards and price discounts.
Advertising is any paid form of non-personal communication of ideas or products in the "prime media": i.e. television, newspapers, magazines, billboard posters, radio, cinema, flyers etc. Advertising is intended to persuade and to inform.
Score = 5
This solution will be the cheapest way of possibly increasing the companyfs sales as well as product awareness and acceptance. All the criteria given are met.
4. Implementation and Monitoring
The marketing manager may recommend the following sales promotions to help the branch manager as part of their action plan to address the problem.
Display huge, attractive, noticeable tarpaulin bulletin board advertisements of the restaurant at the mall entrance and/or a few meters away from their location so as to inform the public of its products and placement. The place may be rented for at least a month, enough for customerfs product retention and awareness.
Distribution of flyers may also be done within the vicinity for at least a month. To launch product promotions, this may be conducted a week ahead until its duration to attract the customers.
If the restaurant is located within a mall, advertisements may also be considered in the movie houses.
After every month, the branch manager must provide progress reports to the operations manager to check the affectivity of the chosen solution, after evaluation, necessary adjustments should be done to maximize results if it be positive and discuss the matter during follow up meetings, otherwise, the group must re-plan their strategy.