Pappas veered away from their father’s restaurant ambitions

Pappas
Restaurants opened its first restaurant in 1976. The Family owned operation
goes back much further though. In 1897, H.D. Pappas moved to America, from the
homeland of Greece, to pursue his dream as an American restaurateur owning a
restaurant group spanning throughout Arkansas, Tennessee, and Texas. His sons
Pete and Jim followed similar American dreams but veered away from their
father’s restaurant ambitions to open a refrigeration company. Fast forward to
76′ where Jim’s sons Chris and Harris took after grandpa and opened what we
know today as Pappas restaurants. (https://pappasitos.com/our-story/)
Pappas has now over ninety-six locations and is still growing.

Mission Statement

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The
companies mission statement is broken into four parts:

Our Goal-      To be a superior restaurant company
through constant innovation, attention to detail and a focus on quality in all
we do.

Our Guests- We are dedicated to greeting each person who
walks through our doors with warmth and friendliness. We create an outstanding
dining experience through identifying and fulfilling Guest expectations.

Our Team-     We believe that the greatest strength of
Pappas restaurants lies within our people. We are committed to providing an
exciting environment that recognizes initiative and performance. We offer
opportunities for growth and challenge individuals to achieve their best.

Our Communities-   We build relationships through participation
and service and work together to help meet the needs of the community.

(http://www.pappas.com/about/us/)

Standards of Excellence

Superior
Product Quality, Superior Service, Constant Innovation

Interview Summary

The
general manager of the Pappasito’s Cantina Arlington is Jackson Garrison.
General manager is the highest title available in restaurant followed by
kitchen manager, floor manager, then training staff, and finally entry level
positions. What Jackson and I discussed that made Pappas extremely successful
was the word of mouth. Not only can they keep customers in the doors but brings
them back with friends, family, and colleagues repeatedly. Consistency and
pride definitely were the main reasons concluded in interview as to why Jackson
accredited success to his restaurant. Without a means of advertising Jackson
was optimistic business would not let up. He hinted that the company might be
looking into a marketing contract with the National Football team that plays in
Arlington but could not disclose too much information. The restaurant has one
promotion weekly which is half price fajitas, Wednesdays after 5 P.M. The
company also works with charities like Boys and Girls Club of America, M.D.
Anderson, Red Cross to promote dessert sales during various points of the year.
The concept specifically celebrates Cinco de Mayo, Hatch Chili festival, and
will run gift card promotions twice a year. An email club provides fee appetizer
upon sign-up and desserts for anniversaries or birthdays. The club will send out
emails with menu changes and also various promotions, like discounts off of two
entrees. There is no current marketing outside of the doors of the restaurant,
no billboards, posters, fliers, television or radio advertisements. The company
has plenty of accolades by various magazines and newspapers (found at
pappas.com) but no paid advertisements. Jackson believes most marketing within
the company comes from research and development for fish market and drinks. The
company has its own printing department so menus and in store materials are
inexpensive.

Environmental
Analysis

Economic Environment and Trends

More
consumers in general are eating out. 72 percent of Americans are eating out at quick
service restaurants for lunch, at least once a week in a 2016 study done by
Statista. (https://www.statista.com/topics/1957/eating-out-behavior-in-the-us/)

Political/Business Issues and Trends

Sustainability
has become extremely important. More and more consumers want to know that the
business and products used have more meaning than what they get directly.
Consumers want to know that they are making a difference tomorrow. The National
Restaurant Association has a whole guideline for conserving outlined on their
website under the “Impact Industry” tab. (http://www.restaurant.org/Industry-Impact/Conservation)

Social/Cultural Issues and Trends

More
restaurants are diversifying in culinary options. Pappasito’s being a tex-mex
restaurant may limit the influx of customer based on the specific food type.
This is true for many restaurants but must be observed closely to not shut out
potential of the risk-taking consumer.

 

 

Demographic Issues and Trends

Arlington,
in 2015, was listed by a GOBankingRates study (provided by Dallas Morning News,
https://www.dallasnews.com/business/money/2015/03/01/arlington-is-one-of-10-most-affordable-cities),
to be one of the country’s top 10 most affordable places to live. This could
suggest that the practicality of Arlington’s living makes restaurants more
likely to have customers in their doors. Because of the want or desire to live
in Arlington because of its affordability could suggest that maybe people are
less apt to spend money at a restaurant and save it for housing and groceries.
The crowd drawn to Arlington for entertainment are sports fans and might be of
a higher income allowing more money to be recycled into Arlington’s businesses
and restaurants.

Technological Issues and Trends

Cybersecurity
seems to be the talk, more so every day. The industry as a whole is not seeing huge
data hacking, however with internet security needing to be at an all-time high,
companies are taking no risks at losing customers over poor security. Companies
are using more technology every day, like pay-at-the-table technology, so it is
important that companies stay ahead of the hackers every day. (http://www.restaurant.org/News-Research/News/Dont-get-caught-in-a-breach-Prepare-for-cybersecu)

SWOT
Analysis

Internal – Strengths

Pappasito’s
is a well-known name and customers naturally flock to the Pappas brand. The
company’s customer relationship management is very well executed so the
customer value matches satisfaction (chapter 1 ppt, slide 20). The restaurant
in Arlington ranked number 7 amongst 684 Arlington restaurants according to
trip advisor (https://www.tripadvisor.com/Restaurant_Review-g30183-d465096-Reviews-Pappasito_s_Cantina_Rstrnts-Arlington_Texas.html).  Pappasito’s consistently performs to a level
that is review worthy via consumers. Guest relations would prove to be of the
up most importance. Freshness is a constant attention for this company and
works directly with University of Houston students to innovate how Pappas
creates a freshness standard (http://www.pappas.com/about/news-and-events/?m=11=2017=229).

Internal – Weaknesses

An
internal weakness may stem from the fact that the restaurant has no technology
for consumers to indulge in experience. Pappas has a high number of families
that visit the restaurant and have children that would enjoy stimulation.
Limited variety would also be a weakness of this restaurant. Only the people
that want tex-mex are apt to visit this restaurant.

External – Opportunities

The
main source of opportunity for this restaurant is that they are not doing any
advertising amongst the community. This is especially true when the Dallas
Cowboys and Texas Rangers play within a two-mile radius of the restaurant. The
marketing could be done simply by print and the company doesn’t even have to
use new technology to develop. Pappas Restaurants owns a property right next to
the Pappadeaux seafood kitchen in Arlington, there is a good chance that an
emerging concept could lower the need for customers to go to another restaurant
and the overflow remains under the same belt.

External – Threats

The
immediate threats to business in terms of marketing would be all of the other
options available as potential customers drive to Pappasito’s. As mentioned
before, there could be a lost market because the restaurant is not located
within closer proximity to the stadium, in the Entertainment District of
Arlington.

Success and Failure (per O’Donnell’s
request)

Pappasito’s
is successful at creating a restaurant worth revisiting. Current marketing like
half priced fajitas creates a under selling for the product. Customers come in
for the great deal, are wooed by the fantastic service and great food, then
hopefully they will want to comeback with guests to dine another night of the
week. Captivating an audience in this way can be excellent and also hurtful.
Those same guests could come back next week only for the half-priced promotion
with a bus load of people, spend less money to feed more, and only visit in
this manner. The long line of people creates longer waits, less turnover on
tables, and makes the deal undesirable for the idea that they might wait up to
an hour and a half for a product they might be able to get at Chili’s down the
street.

Competitive
Analysis

Primary Competitors – Their Strengths and
Weaknesses

Pappadeaux
Seafood kitchen, Boomerjack’s, Buffalo Wild Wings, Chili’s, TGI Friday’s, and
many other restaurants are primary competitor’s due to proximity to not only
the stadiums and might draw attention of the consumer, but because they are also
cheaper. For that reason, another Pappas name, like Pappadaux, closer to the
stadium would maybe be the stiffest competition in the area. It is a sister
restaurant that charges at the same price point, serves the same quality, and
is located just a little closer to the center of the Entertainment District of
Arlington. However, Torchy’s Tacos opened up in a similar proximity. The
restaurant is much quicker serve and the price is cheaper as well. The market
at Torchy’s is tacos and they do not offer a full menu of tex-mex items.

 

Secondary Competitors – Their Strengths
and Weaknesses

Places
like Chuy’s serves a very similar tasting product with sub-par levels of
quality and is also much further away from the stadiums. Same goes for other
Tex-Mex restaurants like Fuzzy’s. Fortunately, most of the other restaurants
listed above do not offer any locations close enough to Pappasito’s to make an
impact on the Tex-Mex market.

Customer
Analysis

Customer Demographics

Pappasito’s
customer would consist of young families with younger children and adults
ranging 30-60. The average price per person average was about $25 according to
Mr. Garrison. Meaning that after approximately twenty percent tip for a family
of 4 the tab runs at about $120. When compared to a restaurant with a $15 per
person average, we are dealing with a $48 difference meaning customers are
middle-higher income.

Customer Psychographics/Lifestyle
profiles

The
psychographic amongst those in the Arlington area varies from sports fans,
concert goers, and event driven people. Consumers are willing to spend money
for experience as that is usually what brings people to the area for games,
concerts, and events. Family consumers are drawn to the idea of not having to
wait and knowing the dining experience is as easy as possible, this makes the
restaurant thrive on family based sales.

Customer Buying/Loyalty Profile and
patterns

Many
people are perceived as regulars, or a frequent consumer to the market. The
customers might have season tickets to events or live down the road but many
customers are loyal to the brand and visit weekly. Buying decisions in
Arlington seem to be heavily weighted on the fact that there are two major
sporting venues within throwing distance of the city. Consumers of events
tickets are more likely to spend money on an experience like dining. That can
also mean that a lot of people are likely to tailgate the game and avoid
restaurants at all costs. If you can create a consistent business model that is
also positive, the people will continue to visit because they don’t have to
worry about any malfunctions in the dining experience. Because Pappas strives for
this as a company they are able to draw loyalty from other locations as well. The
email club Pappas uses allows for consumers to engage in free appetizers on
sign up, desserts for anniversary and birthdays, and discounts on meals
throughout the year.

Customer Perceptions of the restaurant

Customers
perceive that the product will be consistent every single time. They know the
business of the restaurant can be high but wait time and food cooking time are
always executed well. Customers know what level of attentiveness is adequate
for Pappas standards in their restaurants, these customers are bias to that
quality and often compare each location as separate entities but gather the
same result.

Perceptions – Relative to competitors

The
general consensus would be a concern for price associated with the food. Pappas
is well aware that the price is higher than competitors and they can justify by
superior quality compared to the others in the market. What makes it difficult
is when that standard isn’t met or attained. This creates a need for service
recovery, Pappasito’s either does a great job at not allowing these points or a
good job making sure every issue they are made aware of, remain resolved.

Positioning
of the Restaurant

Targeted Image and Customer Perceived
Image

The
target image is to be the best every time. It is stated right in the standards
of excellence that Pappas wants to perform at the highest standard available to
them. If you provide the best fajitas at an expected value with excellent
service of course consumers will be back next week rather than making the decision
to try a different restaurant.

Perceptual Map and discussion of Map

Let’s
put the restaurant on a map measuring expensiveness (right bound) versus
affordability (left bound) for the horizontal axis and quality of food served
on the vertical axis. High quality will be upward and low quality will be
downward. Pappasito’s would land almost exactly in the center of the upper right-hand
quadrant. The restaurant would be considered a Cadillac amongst Kia and Porsche.
Perceptual maps can put into perspective a lot of different elements. By basing
the restaurant on this map, it allows an easy representative of maybe why
family consumptions for celebrations or get together would be higher hear opposed
to a lower price point and quality food like Taco Bell.

Assessment
of the 4Ps and 4Cs

Product

Pappasito’s
delivers a variety of tex-mex options to customers. The restaurant does not
offer any other option for food, the company does have different concepts
though. For this reason, Pappasito’s has little product diversification outside
of the traditional tex-mex options to choose from. The restaurant does do a
very great job at being the best for the market and defiantly serves the most
reputable culinary option in the area for tex-mex.

Prices

Pappasito’s
is expensive. Appitizers can range up to $24.95, single entrees for $38.95, which
means that the restaurant must remain at a high standard to ensure the guests
are willing to compensate the company for the product and service provided (https://files.pappasitos.com/images/dyn/menus/menu_186.pdf).

Promotion – Traditional and
Digital/Online/Social Media

Promotion
is a huge area of opportunity for this company. Pappas could utilize
attractions to the city to lure guests into their doors. The Rangers, Cowboy’s,
and many other events flood the area multiple times a week sometimes, this
might be an avenue to look into for an investing standpoint. Money put in here
would spread like wildfire if the company maintained the level of detail that
loyal customers already expect. Now the second piece the communication, portion
of the promotion needs to be shared with customers.

 

 

Place/Distribution/Location

This
restaurant is in a great location for a few reasons. First, it is close to the
stadium. Not exactly walking distance but not more than five minutes by car.
That makes the distance ideal for those that also are not attending the events
because the lot does not get used for un authorized event parking and also avoiding
traffic on the roads directly connected to the stadium from the highway. The building
itself turnover just about 500 heads on a busy hour, this makes it ideal for
large crowds that are in and out. The convenience for guests is perfect amount
of near the events for those wanting a quick bite before attending, but just
far enough it won’t leave them wanting to avoid visiting when an event is in
town,

Current alignment of 4Ps/4Cs with
current targeted positioning

The
current alignment works. The company has a product that consumers want, the
price associated and be justified as a cost assuming the quality is met one
hundred percent of the time. The promotion has enough word of mouth
communication to work, and finally, the place is convenient and consumers are
willing to come to the restaurant.

Proposed
Marketing Plan

Objectives/Budget/Timeline for your plan

The
objective of my marketing plan is to gain more draw from buyers in the event
centers in Arlington. The idea is that by purchasing advertising location
either AT Stadium or the new Rangers stadium that will be opening up then
Pappasito’s will see an influx of customers coming to visit after events. This will
also allow to get the consumer more exposed to the company, resulting in future
visits to all of the company’s locations. It would be ideal that a small
one-off restaurant front could open but unlikely due to the contract deals the
event centers have.

Product Plan

The
product is the concept as a whole. To make the concept more well known in the
eyes of the consumer it is going to take strategy. For starters, what locations
of signage is available to the restaurant for display purposes. A message will
be prompted that will encourage people at the game to sign up for a free appetizer
and the customer will then navigate to an email club sign-up page. Print ads at
the stadium will have QR codes that will allow for ease of access to the club
sign up. This promotion is not only going to get customers to come to visit
once, they will continue to receive offers and promotions to keep them coming
back once we have captivated them on an initial visit.

Pricing Plan

Pricing
will be relative to contract basis. UNT just signed a two-year deal with the Cowboy’s
promotional team that will give them coverage in both AT&T Stadium and The
Frisco STAR. That contract set UNT back $1.725 million (https://www.lewisvilletexan.com/news/featured/unt-dallas-cowboys-contract-releases/).
For 2 years, the deal with the cowboys calculates for about 30 regular season
games costing $57,500 per game. UNT would make its money back if one student were
to enroll every regular season game their advertisements were shown. The
average Cowboy’s regular season game hosts approximately 92,539 people. That is
the most amongst all National Football League Teams (https://www.statista.com/statistics/283897/national-football-league-teams-ranked-by-average-attendance-2013/).
I would tend to say that out of those 92,539 people every week, someone is bound
to enroll at UNT or even consider doing so. That number would change
drastically if the contract included a spot in the stadium that national television
caught a glimpse of (i.e. field goals, sidelines, equipment). As stated by John
Claiborn Osborn, in a University of Texas master thesis, entitled Benefits of Advertising and Marketing During
Televised Sporting Events, “When companies with billion-dollar advertising
budgets are investing 25 percent of that into advertising during sporting
events the companies are counting on seeing some return on this large amount of
capital invested.” (https://repositories.lib.utexas.edu/bitstream/handle/2152/22390/OSBORN-MASTERSREPORT-2013.pdf?sequence=1=y)
If one Pappas location averages $100,000 per week and Pappas invested $1
Million, it would take the two Arlington locations less than 2 months to pay
off the promotion. As a company, Pappas consists of ninety-six locations, it
would take less time than 2 months to pay the debt. According to business
insider, whom rated Pappasito’s as the twelfth “Best Chain Restaurants in America
2017” claimed the sales of Pappasito’s as a concept, specifically at $160
million. (http://www.businessinsider.com/best-chain-restaurants-in-america-2017-2017-8/#12-pappasitos-cantina-9)
the company should have no problem justifying this payment.

Another
positive to this marketing promotion is that the company already has an email
club in place. Utilizing the free appetizer as a means for promotion is already
an accumulated cost the company expects to pay.

For
a family of 4 to come in, after signing up for a queso at a Cowboys game, they
then average twenty-five dollars in spending each this is only a ten percent
loss in sales. Meaning for that ten dollars the return on investment is ninety,
not considering the cost of the marketing at the stadium. As for the family,
they just received a ten percent discount on their meal.

Promotional Plan – Traditional and
Digital/Online/Social Media

Return
on investment is the idea behind this marketing plan. By using stadiums and
events down the road from the company more people will start to venture in to
the Pappas Restaurants name. this will allow time to capture the market, pay
off the debt then proceed in growth. UNT does not offer any incentives with
this advertisement. It is simply brand awareness. When one associates with the
Cowboy’s the feeling is that the university is top of the line and something
that represents them personally. Using the email club will create an initial
visit, customers will be wowed by all of the attributes that makes Pappas Restaurants
so successful, then the next emails will encourage return visits. In store, all
of the managers will learn about the email promotion happening during the
season, and they will be instructed to key they appetizer under Cowboys promo
key on point of sale systems. This can then keep track of effectiveness.

Place/Distribution/Location Plan

Location
will be AT&T stadium and the main sources of revenue will be the locations immediately
in the Arlington area. Distribution would be to all that enter the doors of the
stadium and encourages repeat visitors. Not only are the locations still close
to the stadium, if they are returning to their homes in the Dallas metroplex,
they can visit a number of other locations as well from a returning guest
standpoint because of the email club.

 

 

Assessment of success – Financial and
Timeline Benchmarks

Success can be monitored weekly in
headcounts after game and throughout the week, by accounting for how many times
a person used a coupon received by email in POS system, and by game day business
level observations. It will be important to track the return on investment for
these checks as well. The sales reports for the football season should increase
as well as monitor the whole year headcount trends. A small increase might
suggest not much impact, but large increases can mean that the marketing ploy worked.
If successful in this market would encourage the company to invest in its
largest market, Houston. The Pappas family could employ the same strategies in
the city to which it is based.

Conclusion

Summary

Pappas has many tools available to
accredit for current successes. To grow as a company and expand the name I believe
that the company should try captivating a market within its own backyard,
AT&T stadium. This creates a fun, energetic, young crowd that would keep
the Pappas name viable amongst a new generation. Pappas already has a great
business model for family dining and growing fans.

Reflections
& Analysis

By using existing systems and already
being a well-known brand the company will have much success with the
implementation of the new marketing run. Pappasito’s has a current marketing
mix that is conservative and works to a degree. This new implementation will expand
market without setting the company back very far. The growth should heavily
outweigh the cost due to the fact that the stadium sees so many fans in a given
regular season game.

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