Tag Archives for " restaurant marketing "

2 Restaurant Brands — A Recipe For Failure.

In a town the size of Bend, Oregon, three top restaurants closing within weeks of each other is big news. It’s a story that goes way beyond water cooler banter. Beyond the blogosphere. Beyond the business section of the local paper and into the annals of business school curriculum everywhere.

These are lessons worthy of any MBA program in the country.

The obituaries sounded all too familiar for this town, at this time: “Merenda’s demise was hastened by prevailing economic conditions.” “The bottom dropped out of the restaurant business. Everyone’s feeling the pinch.” “The seasonal nature of business in this town makes it very difficult…”

But the story goes way beyond recessionary economics and touches on many of the fundamental principles of branding. The restaurant business is littered with cases of meteoric success and dramatic failure. For whatever reason, it’s an inherently volatile business.

Prior to 2000, the culinary scene in downtown Bend wasn’t much to write home about. Some would say, non existent. So when Merenda opened in 2002 it generated more buzz than Steve Jobs with a doctor’s appointment.

As the Bend Bulletin reported, “Chef Jody Denton pioneered a renaissance in fine dining in Central Oregon.” But the Merenda brand wasn’t about the cuisine. It was about partying. The brand promise seemed to boil down to “good friends, good times.” It was a loud, raucous place where groups would gather and drink generously from an outstanding wine list. The vibe was more urban, the energy level more electric, than anything previously. Many nights you couldn’t hear yourself think.

Lesson # 1: Trendiness seldom translates into a lasting brand.  Many of Merenda’s customers were only there because it was THE place to be. It was a superficial relationship, not a genuine bond. Success by association. When new restaurants opened the crowds thinned out.

Trendiness is a common problem in the restaurant business, fashion and high tech. The next big thing or hot spot is always right around the corner. So successful brand managers have to find ways to stay relevant with their past customers, or become relevant to a whole new group.

After five years Chef Denton got distracted. Just when Merenda neeed a little extra attention he opened another restaurant less than a block away. And his place called Deep never got above water.

Lesson #2. Brands need constant attention. This seems like a no-brainer, but many people dream of having a business that runs on autopilot and generates an endless flow of effortless revenue. That doesn’t work in any industry, much less the restaurant business. You have to mind the store.

In 2005 Cornell University published a seminal study on why restaurants fail. One of the surprising contributors was simply a lack of attention, time and effort by the owners. “Failure seemed to stem from an inability or unwillingness to give the business sufficient attention… The immense time commitment was mentioned by all of the survey respondents who had failed.”

At Deep, Denton was determined to create something completely different. As he told The Bulletin: “That’s been kind of my business model: finding what Bend doesn’t have and filling that void. I’ve always enjoyed the environment of a sushi bar. It’s always been something appealing, both from the restaurant’s and the chef’s standpoint.”

What he failed to consider was the customer point of view.

Lesson # 3: Differentiation doesn’t guarantee success. Being different from the competition is certainly important, but it’s not as crucial as being appealing. Tiny morsels of Kobe beef served on a hot rock for eight dollars a bite… That’s different! “Angry Lobster,” Monkfish pté, grilled yuzu and marinated, chopped maguro tataki were all impressively different. But not appealing enough to inspire repeat business by a large group of people in a relatively small market.

Bottom line: Deep was a high-end sushi place in a meat and potato town.

Lesson #4: All successful brands have a clear, well-defined concept that goes beyond the product. The Cornell study proved that clarity of concept is essential to restaurant success. “Perhaps the key finding was the focus on a clear concept that drives all activities… Successful restaurant owners all had a well-defined concept which encompassed an operating philosophy and business operation issues. Failed owners, when asked about their concept, discussed only their food product.”

Denton certainly had vision beyond food for both his restaurants. But the concepts behind Merenda and Deep were based more on Denton’s past experience and personal preference than on the realities of the local market.

There’s an old saying… “If you want to live with the classes, sell to the masses.” In Denton’s case, his restaurants served the classes. His high-end brands only resonated with a small segment of the population, and he didn’t reinvent Merenda when he needed to.

In the end, Denton’s concept for Merenda was not clear enough to sustain the business over the long haul. (Being first in the market isn’t a sustainable brand strategy for a single restaurant.) And the concept for Deep never had a chance. So both restaurants were shuttered, his investors came away empty handed, and there are two more empty storefronts in downtown Bend. Hopefully, the next restaurateur who comes along can learn a lesson from Merenda.

15 Four secret ingredients of all successful brands.

 

(What you can learn from a healthy bowl of cereal and a two-buck burrito.)

Branding is a popular topic in the business press these days. Unfortunately, case studies about Coca-Cola, Nike and Virgin, make is sound like Branding is a discipline reserved for the Fortune 500 companies and globe-trotting billionaires.

Let me set the record straight on that: It’s entirely possible to build a successful brand without a million-dollar marketing budget or a cadre of high-paid consultants. Many small-business owners do it intuitively. They build a successful business, step by step, and over time a great brand develops.

It does not happen the other way around. You can’t just come up with a nice name a great logo and expect the brand to suddenly succeed. Without a good, solid business operation, you can’t have a great brand.

If you look, you can find plenty of inspiring brands in everyday places. Like the breakfast table and the local Mexican restaurant. Because the fact is, branding is not exclusive to big business. In addition to the multi-national brands that have become household names, there are successful regional brands and millions of small but prosperous local brands. Conversely, many big, international companies don’t adhere to any principles of Branding. It can go both ways.

This isn’t the Harvard Business Review, but if you deconstruct it, you’ll see that all successful brands share four important things:

Relevance.

Credibility.

Differentiation.

Consistency.

Forget about Proctor & Gamble for a minute and consider the small businesses in your town that have a loyal following. What makes them successful? What have the owners done that turned their typical small business into a successful local brand?

In Bend, Oregon there’s a tremendously popular restaurant named, simply, “Taco Stand.”It’s the best Mexican food in town, and it costs next to nothing. It’s so cheap it’s almost embarrassing. Taco Stand’s in a terrible location next to a laundry mat. It’s not open for dinner. They have no web presence or advertising budget. And yet, it’s a successful little brand, doing much better than many high-end restaurants downtown.

Taco Stand has all four ingredients of a tasty brand, with a bit of Tabasco thrown in for good measure. It has always been relevant to young people living the ski bum life who can’t afford fifteen bucks for lunch. And since our building boom crashed, a cheap lunch at Taco Stand has become cool to a lot more people. Like Walmart… hard times equal increased relevance.

For Taco Stand, differentiation and credibility stem from the genuine quality of the food and the loyal, locals-only reputation.If there were an insider’s guide to Bend dining, Taco Stand would be top of the list. And consistency… you’re never going to walk into Taco Stand and find they’ve changed the menu on you. They do simple Mexican fare, and that’s that.

But, you say, “my business is a lot more complex than that. We have a sales force and a supply chain to deal with.” It doesn’t matter. You still need the same four ingredients. Leave one out and you can have a successful business, but not an enduring brand.

Differentiation and credibility used to be easy for big corporations. They could launch a new brand with a massive tv campaign, effectively differentiating their product on nothing but advertising creativity and pretty packaging. And the television presence alone equaled credibility.

Smart Start brand case study on brandingKellog’s tried this recently with a new brand of cereal called Smart Start. Great name. Great-tasting product. And an old-school, Fortune-500 style marketing effort. Lots of full page, full color ads in smart magazines like Shape and Parenting.

My kids like Smart Start, but they’re not the target market. It’s an adult cereal, promoted on its nutritional virtues. Too bad. As it turns out, Smart Start isn’t as nutritious as it’s cracked up to be.It’s loaded with sugar… 14 grams of high fructose corn syrup. That’s more than Fruit Loops, Cocoa Puffs or Cap’n Crunch.

I’ll bet Smart Start doesn’t have the staying power of Cap’nCrunch — my childhood favorite. Because in this day and age, consumers are too smart for Smart Start. When the word gets out, the brand’s going to have a substantial credibility issue on their hands.

Kellog’s will probably fight it with the old line-extension strategy trick. Rather than addressing the underlying weakness of the product, they’ll just keep launching new flavors of Smart Start and new spin-offs. (They already have several variations.) But in the process, the brand will lose another key ingredient… consistency.

So Smart Start’s credibility is questionable. The brand’s consistency is debatable with all the line extensions. And relevance is dwindling as more people find out about its nutritional shortcomings.

I predict the brand will eventually die out because it doesn’t live up to the promises of its marketing. But even if it dies, Kellogs might consider Smart Start a branding success. Maybe it’s done well enough. Maybe Kellogs can chalk up a good profit with new brands that have short life cycles. It’s a big company, with big resources. They can just move on and do it all again.

Smaller companies don’t have that luxury. You can’t afford to launch a new brand under false pretenses of any kind. Credibility too hard to come by, under the best of circumstances.

What do you suppose would happen to Taco Stand if they suddenly started marketing “healthy” burritos without changing the way they cook. It’d be a recipe for branding disaster. Relevance and credibility would be the first to go, followed shortly by consistency. After that, no amount of differentiation would help. It would end up like so many other restaurants that just come and go, leaving a bad taste in everyone’s mouth.