BUSINESS IDEAS Forum

5.0 Strategy and Implementation Summary

Our strategy is based on serving our niche markets well. The seniors, baby-boomers, families with young children, blue collar workers, middle income individuals, and most of mid-America can all enjoy the dining experience at Sagebrush Sam's.

What begins as a customized version of a standard product tailored to the needs of a local clientele can become a niche product that will fill similar needs in markets across the U.S.

We are building an infrastructure so that we can replicate the product, the experience, and the environment across broader geographic lines. Concentration will be on maintaining quality and establishing a strong identity in each local market. The identity becomes the source of "critical mass" upon which expansion efforts are based. Not only does it add marketing muscle but it also becomes the framework for further expansion, using both company-owned and possibly franchised-store locations.

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5.4 Marketing Strategy

A combination of local media and local store marketing programs will be utilized at each location. Local store marketing is most effective, followed by radio, then print. As soon as a concentration of stores is established in a market, then broader media will be explored.

We believe, however, that the best form of advertising is still "word-of-mouth." By providing an entertaining environment, with unbeatable quality at an unbelievable price in a clean and friendly restaurant, we will be the talk of the town. Therefore, the execution of our concept is the most critical element of our plan.

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5.1.1 Positioning Statement

Our main focus in marketing will be to increase customer awareness in the surrounding community. We will direct all of our tactics and programs toward the goal of explaining who we are and what we are all about. We have no plans to join in the coupon/discounting wars nor the birthday or frequent buyer clubs upon which others have embarked. We will price our products fairly, keep our standards high, and execute the concept so that word-of-mouth will be our main marketing force.

Furthermore, we will do no outside marketing for the first 90 days of business at each new location. The "honeymoon period" of each opening restaurant will bring in all the guests we can handle properly. It would be a mistake to bring in more customers than we can serve at our peak quality level.

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5.1.2 Pricing Strategy

All menu items are moderately priced. (Confidential or proprietary information deleted.) While we are not striving to be the lowest priced restaurant around, we are aiming to be the value leader.

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5.1.3 Marketing Tactics

We will employ three different marketing tactics to increase customer awareness of Sagebrush Sam's. Our most important tactic will be word of mouth/in-store marketing. This will be by far the cheapest and most effective of our marketing programs. The second marketing tactic will be Local Store Marketing (LSM). These will be low-budget plans that will provide community support and awareness for our facility. We plan on doing approximately two or three LSM programs per marketing quarter. The last marketing tactic will be local media. This will be the most costly and will be used sparingly to supplement where necessary.

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5.1.4 Marketing Programs

Word Of Mouth/In-Store Marketing

• Table tents.
• Wall posters.
• V.I.P. party.
• In-store tour given to every new customer.
• Outdoor marquee message changed weekly.
• Grand Opening celebration.
• Yearly birthday parties.

Local Store Marketing

• School programs - perfect attendance, honor roll.
• Local charity carwash site.
• Customer raffle for western apparel or Sagebrush Sam's artifacts.
• Free Sagebrush Sam's "T" shirts to guests that line dance with us.

Local Media

• Direct mail piece - containing interior pictures of our restaurant, our prices, "Theme Nights," and an explanation of our concept.
• Radio campaign - complete with live remotes on our parking lot. We will pick the three top local stations with which to place our short and catchy ads. We will also sponsor radio call-in contests with free meal coupons to Sagebrush Sam's as the prize. We will trade our complementary dinner coupons for free radio time. We will also make "live on the air" presentations of our food products to the disk jockeys, hoping to get the reactions broadcast to the listening audience.
• Newspaper campaign - placing several large ads throughout the month to explain our concept to the local area.
• Cable TV - will be a possibility if we can secure favorable rates with enough frequency.

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5.2 Sales Strategy

The sales strategy is to build and open new locations on schedule in order to increase revenue. Each individual location will continue to build its local customer base over the first three years of operation. The goal is $3-$4 million in annual sales per unit. A unit will be considered mature once it has passed the $3.5 million mark in annual sales.

The following sections illustrate the combined sales forecast.

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5.2.1 Sales Forecast

Opening day for our first store is scheduled for July 1, 2001.

Sales Monthly

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5.2.2 Sales Programs

Each opening of Sagebrush Sam's will have the same mix of marketing programs as the others. Below are the programs that we will develop to kick open each location.

• Grand Opening -- Each new store will have outdoor signs in place as soon as possible. We want the marquee and road sign to announce that something new and exciting is coming to the neighborhood. Once the shell of the building is up, we will begin mounting large banners announcing that we will open soon. At the grand opening, we will attach rows of pennants to our building, outdoor sign, and pole lights to attract attention. All of this is low cost but has proven to be highly successful.
• VIP Parties -- We will host both a VIP lunch and dinner. This will serve the dual purpose of training our staff and introducing ourselves to the community. The list of individuals we invite will come from the Chamber of Commerce. We will choose a local charity to be the beneficiary of our event. All guests will receive an invitation for themselves and one other, to attend our event free-of-charge. All we will ask of our patrons is that they make a small contribution to the hosting charity. We will run the lunch on Monday, followed by the dinner on Tuesday, with our Grand-Opening on Wednesday.
• Point of Purchase (P.O.P.) --We will use table toppers to explain the concept and differences between lunch/dinner, "Theme Nights," sell gift certificates, announce job openings, and possibly mention franchise opportunities. Brochures and handouts will explain that we can handle large parties, banquets, or buses. Another brochure will list our daily featured entrees.
• Direct Mail Piece --A stand-alone piece measuring 6" by 7.5" in size, once folded, will be produced in full color on heavy weight paper. Inside will be all the important details of Sagebrush Sam's. We will explain our menu, prices, hours of operation, "Theme Nights," method of service, and provide a locator map.

• Radio --We will create one short, humorous, music-based radio commercial, in both a 30- and a 60-second spot. Both commercials will have a 10-second blank bed where we can mention something specific about the restaurant.

• Newspaper --We will create several different size ads, generic in nature, to be used for any store in the chain.
• Local Store Marketing (LSM) --We have three LSM programs in our current arsenal. We envision having over two dozen LSM promotions for use by individual Sagebrush Sam's. The three that we will use during the initial marketing wave are the customer raffle, charity carwash (free carwash while you dine with us), and our school program (perfect attendance or honor roll students receive a free meal).

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5.3 Milestones

The following table lists important milestones, with projected dates, management and budget responsibility. The milestones schedule indicates our emphasis on planning for sales strategies.

Milestones

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