Department of Marketing & Corporate

Communications

COLLEGE OF ARTS AND SCIENCES

San Beda College

Mendiola, Manila

Mini Direct Marketing Plan of Don Rogelio’s Pizza, Pateros

A Marketing Paper Presented to

The Faculty of College of Arts and Sciences San Beda College

Of the Requirements of MKC15A: Direct Marketing

Bachelor of Science in Business Administration Major in Marketing and Corporate Communications

Prepared by:

Flores, Lloyd Marc Vincent M.

Executive Summary

Don Rogelio’s Pizza is a pizza parlor situated along the business district of

Pateros. Recently established, it has not been doing well in terms of customers

especially when compared to neighboring food businesses as well as in competition

with the only other pizza parlor in town. The problem is that they lack interaction with

prospects and have no discernible marketing effort at all. This makes it a prime

candidate for this mini marketing plan which hopes to resolve the challenges they are

facing.

For this paper, a direct marketing approach was implemented to resolve Don

Rogelio’s Pizza’s issues and increase its sales, promote brand awareness, and

stimulate loyalty from the market. The main objectives include building a customer

database, segmenting the market, creating a strategy to fit the target market,

implementing the strategy, and measuring results.

The specific courses of action are sending direct mailers to get the customers

attention, giving out bounce back offers to encourage customers to make repeat

purchases, offering discount coupons, issuing a personalized loyalty cards that doubles

as a promotion in which customers becomes more motivated to come back.

Hopefully, the plan works and helps Don Rogelio’s Pizza attain a new position as

the next successful business in the district.

Market Description and Analysis

Internal Scan

Don Rogelio’s Pizza is located at Pateros, right at the town square or the

business district of the municipality. It is a relatively new addition to the list of

businesses in its area as it only began its operations last November. They mostly sell

pizza products with a variety of choices ranging from the ever popular Hawaiian pizza to

a more unique variant they created called the Grandslam Pizza, which contains an

extensive assortment of toppings than their other products. The prices of their pizzas

can be as low as P53.00 to P210.00, reasonably cheap considering the prices of other

pizza parlors. The stall is usually managed by four employees who take turns taking the

orders of customers and prepping the pizzas to be baked. The entire establishment is

housed in a kiosk-like store which it shares with one other food stall which is actually a

subsidiary of Don Rogelio’s Pizza that offers noodle based products.

External Scan

Since its location is along the business district of Pateros, its neighbors are

mostly firms and include those that belong to the food service category. Competition

ranges from big food service restaurants such as Jollibee, McDonalds and Mang Inasal

to cheaper alternatives such as lugawan, ihawan, karinderia and tapsilogan. Aside from

the competition in the food category in general, there is another pizza parlor in the area,

Lots’ A Pizza. Customers are typically those passing through the district on the way

home from work or elsewhere. Most customers are therefore those living nearby or

those who are a ride away from their homes.

Analysis

Don Rogelio’s Pizza is in a prime location to conduct its business as it is located

at the busiest part of Pateros. Heavy human traffic is expected to come and go in the

area as it is also a place where multiple modes of public transportation are available

such as jeepneys, FX and tricycles and is the loading and unloading areas of these

vehicles. These people who traverse the strip are most likely either passing through or

living in pateros itself. The fast human turnover of the place makes it a likely area for

food establishments, so as to cater to people who are on the go, which is why most

businesses are food service oriented. This means that Don Rogelio’s Pizza has a lot of

competition for the target consumers, especially with the presence of its direct

competitor in the pizza segment, Lot’s A Pizza. Although not as popular as its

competitor, Don Rogelio’s Pizza has an advantage with regard to its prices as Lots’ A

Pizza typically has a P20~P40 premium over similar products. Currently, the four

employees managing the parlor makes for fast preparation of the products which

typically results in a minimal waiting time for customers although the maximum number

of pizzas they can cook at any given time is three as allowed by the oven they use.

Problem Identification

When Don Rogelio’s Pizza opened in the area last November, people were

willing to try out the place as it was a new addition to the list of eateries in the Pateros

town square and people might have been curious about the new pizza parlor in town.

This could be attributed as a reason why business was good for the first few days.

Unfortunately, it started to slow down after a about a week or two into operations as

there was little effort in promoting the place to passers-by and seemed to rely more on

the on-the-whim kind of customers. This could possibly be construed as an opportunity

loss for the establishment as they were not maximizing their potential by not doing much

to attract customers beyond the physical aspect of the kiosk.

They have a great potential to survive and thrive in the area since they have a

few advantages over their competitors, such as being located at the heart of the district

in relation to other food establishments or having a slightly better pricing model than its

direct competition that makes it more attractive to a budget-conscious market.

Unfortunately, they do not take enough measures as of the moment to take advantage

of the situation which has the effect of making them blend in rather than stand out in the

area. They do not have any marketing peripherals at all such as flyers or contact

numbers. Unlike their direct competition, they lack the ability for delivering their products

which, although understandable with their current resources, makes it a handicap in

creating loyal customers.

As for their current market, most of their customers right now are those who are

curious in trying out the product as they are relatively new in the area and people have

yet to taste their products. The risk in this kind of condition is that eventually, the

number of people curious to try the place will be reduced which would probably affect

the number of incoming consumers. Also, without any effort to home in on a target

market, this could result in a slowdown of business which, when coupled with the fact

that they have no marketing efforts to speak off, could make them fade into obscurity in

the eyes of potential consumers.

As for the baking and serving of the products themselves, taking about fifteen

minutes is typical for the preparation of any pizza and is an acceptable norm in the

industry. What they lack in that regard is that they can only accommodate properly up to

three pizzas at a time which means in excess of that number of orders at a given

moment increases the delay and limits their ability to serve a big number of people. This

is apparent when in the week between Christmas and New Year, there came an

increase of customer traffic in the food service of Pateros but they were not able to

maximize the opportunity as a lot of customers were turned away due to the long wait

they’d had to endure during times of many customers. Although the situation occurs

infrequently, the fact that they do occur means that they throwing away opportunities to

grow as they are putting an apparent limit to their operations. This kind of setup also

wastes their employees productivity as more than half of the time, the stall can properly

be managed by half the current employee base. Increasing productivity should also be

one of their objectives as a business.

In summary, the challenges that Don Rogelio’s Pizza should be facing is that

they should be pouring more effort into attracting consumers by first knowing their target

market. They should also have a marketing strategy to advertise their products and

promote their place and try to create a consumer base that they might possibly build

relationships with. Lastly, internal productivity should be considered as any waste is a

loss for the establishment and hampers its potential for growth.

Alternative Courses of Action

A. Marketing Objectives

General Marketing Objectives

o Identify the target market

o Increase in sales

o Brand Awareness

o Return on Investment (advertising)

Direct Marketing Objectives

o Create a database

o Tailor fit a strategy for the target market

o Stimulate a response from the target market

o Customer retention/loyalty

o Identify which channel of distribution to use

o Measure the response rate

The objectives of the plan encompass a wide range of options that would help

Don Rogelio’s Pizza increase its sales through successfully applying different strategies

aimed to stimulate the market into buying their products. One of the initial objectives is

to identify their target market so as to begin the process of creating a database of their

consumers. Other general objectives of the plan include increasing brand awareness to

make them familiar to the market and generating enough sales to cover the expenses of

advertising.

As for the direct marketing plan itself, the main objective is to build a database of

the customers which would help them determine the different demographics of their

target market and begin the process of tailor fitting a strategy for these consumers. A

good indicator of any successful marketing strategy is the amount of consumers who

responds to these strategies which means that the direct marketing strategies are

approaches that try to stimulate a response from the target market. Also, determining

the proper method to connect with these consumers is essential so as to save costs and

find the most effective way of getting consumers to respond to stimulants. Finally,

knowing the response rate of the market with regard to the strategy employed will

determine the viability of the strategy for future use and help shape the follow-through

programs.

B. Strategies/Programs

Direct Marketing Strategies

o Building the database

The first step in building relationships with the consumers through direct

marketing is to build a database of its current customers. For Don Rogelio’s Pizza, this

could be done by simply giving out a form to their customers to fill up while they are

waiting for their orders to be prepared. Since it takes a minimum of fifteen minutes to

prepare a pizza, this is ample time for consumers to finish filling out the form. Data to be

filled should include, among other things; name, address, gender, contact number,

email, age, and marital status. They can also include a comments area or ask to cite

reasons for purchase so as to have an idea how the minds of their basic consumers

work. Other approaches besides the fill-up form could be a computer or a tablet situated

near the counter or operated by an employee which will make it easier for aggregating

the data in a machine or a database program. Data gathered from this procedure may

help determine the most effective and efficient way to reach out to consumers.

o Segmenting the market

After building the database, Don Rogelio’s Pizza now has enough information for

them to be able to segment the market in groups or categories and choose the target

market for their direct marketing programs. Those with addresses nearby Don Rogelio’s

pizza are prime candidates for a direct mailing program while anyone who has an email

would be sent newsletters of their upcoming events and promotions as electronic

mailing is cheaper than conventional ones. Knowing the average age or marital status

of their customers can be used to form the outline of promotions best-suited to attract

their average consumers. Also, push notification through texts can also be utilized for

those who use cellular phones rather than landline.

o Reaching out to a specified market

Once Don Rogelio’s Pizza has settled on the target market they’ve chosen for a

particular promotion, they need to start sending out their messages through any of the

channels of communication they can utilize. As was mentioned, slow mail, email, and

cellular phones could be used individually or collectively depending on what they think

would produce the best results.

o Getting them to spend more by coming back/repeat purchase

Lastly, establishing communications with the customers is only a part of a bigger

plan to create loyal customers who frequently buys from Don Rogelio’s Pizza. Getting

them to spend more than they would have without the marketing efforts is instrumental

to the precise measure of the success of the marketing plan. Through their promotions

in the direct marketing strategies, Don Rogelio’s Pizza should be constantly giving them

reasons to come back again and again. This increases the lifetime value of each

customer, which means more profit for the business.

Program Mechanics

o Bounce back

The bounce back program is an excellent strategy to use for Don Rogelio’s Pizza

as it encourages consumers to come back and make another purchase in a short period

of time. This can be especially effective if Don Rogelio’s Pizza considers implementing

a delivery service as they can simply slip in the coupons or tape them on the boxes.

Examples of bounce back coupons could be having a free upsize on a customer’s next

order of a large pizza and could even be modified to apply only for a specific product, in

such cases like promoting a new flavor, for instance. The call-to-action aspect of the

promotion is by having the bounce back coupon as a limited offer in terms of the time

frame, such as being applicable on the customer’s next purchase one month from the

date the coupon was issued.

This kind of promotion can be personalized by knowing some details of the

consumer who is ordering, which can be done if a database has been maintained.

Knowing the details of the consumer can mean a more precise targeting method like

giving coupons designed for students or barkadas; or coupons designed for families or

working class consumers.

o Discount coupons

Discount couponing is a tried and true strategy for marketing a business. The

mechanics of a usual discount coupon is that it should contain an expiration date by

citing the period it is valid for redemption. There should be a code of some sort in the

coupons so that Don Rogelio’s Pizza can track who receives the coupon and how many

people avail of the promo.

Though discount coupons are not personalized on its own, it could be part of a

direct marketing strategy if it goes through to the consumers in any of the direct

marketing channels, such as sending it via email or slow mail, coupling it with the direct

mailer as an incentive to the target consumer. It would also serve as a measuring tool

as Don Rogelio’s Pizza will be able to determine just how many of the target market

responded to the direct marketing strategy.

o Loyalty card

The loyalty card is a great way for Don Rogelio’s Pizza to get their customers to

come back again and again by having motivating them to reach a certain number of

purchases to get prize, or in their case, a free pizza perhaps. The way it would work is

to offer customers the loyalty card for a small premium such as P20, after which they

would receive a simple laminated card that has their name on it in front and the promo

on the back. The promo would consist of a number of boxes in which to put stickers and

keep track of how many more purchases are needed before becoming eligible for a

freebie.

The process of making the loyalty cards should be brief and doable within the

time customers are waiting for their orders to be prepared so as to make it more likely

for them to avail of the card. The process of putting the customer’s name on the front

side of the card gives it that personal touch and could even entice them more to make

future purchases.

Timetable

February March April

onward

Week1 Week2 Week3 Week4 Week1 Week2 Week3 Week4

Building the

database

Organizing/

segmenting

Sending

Mailers

Coupons

Loyalty

Card

This timetable means that Don Rogelio’s Pizza should begin building the

database as soon as possible as it is the most important part of any direct marketing

strategy. Loyalty cards can be issued to interested customers as early as when the

database is being created as the promo can function without the need any extensive

content on the database and the process of issuing the loyalty cards can double as a

way of gathering customer information which can be used in the database. Once a big

enough database has been created, organizing and segmenting the information is the

next step in determining the target market. Mailers are then sent through any channel of

to get to the customers and should be done typically about only once or twice a month

so as to sustain the effectiveness of the strategy and give time to analyse which

strategies work best through the number of people who respond to the mailers. Finally,

the coupons for the strategy such as the bounce back offers or the discount coupons

should coincide with the time the mailers are sent and consistently offered to Don

Rogelio’s Pizza’s market.

C. Long Term Plans/Follow-Through Programs

After the implementation of the direct marketing strategies, Don Rogelio’s Pizza

should now be looking into measuring how successful the program is. Through careful

examination of data that they gather throughout the program, several things can be

accomplished to ensure that the strategy is going in the right direction. For the direct

mailer, measure the response rate of those who were sent the mailer is critical in

knowing how effective the direct mailer is. Varying offers and measuring the response

for each kind of offer can help Don Rogelio’s Pizza determine which strategies to use

more frequently and which strategies should be abandoned or changed. A successful

follow-through program for Don Rogelio’s Pizza will keep customers coming back from

losing interest in the business or switching to the competition.

Conclusion

Don Rogelio’s Pizza has a lot of potential to become a very profitable pizza

parlor. Its lack of marketing efforts is the only reason it is holding back its potential.

Though there are alternative ways to deal with the issues of Don Rogelio’s Pizza and

different marketing disciplines could certainly address their problems, a direct approach

might just be what it needs to become the next big pan-baked pizza chain in the local

scene.