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TO: Professor Simon FROM: Team 10 - Groendal, Amanda - Lawlor, Elizabeth - Ly, Antonio - Nelson, Joshua - Totah, Chelsea DATE: November

3, 2011 SUBJECT: Marketing Plan Project 1

COMPANY: Brinker International, Inc. (NYSE: EAT) PRODUCT: Chili‟s Bar and Grill

.. Exhibit B: Chili‟s Multi-Attribute Positioning Map………………………………………..3 1.. SWOT Analysis………………………………………………………………………………..7 3. Issues…………………………………………………………………………………….. 10 4...5 2.4..2. Strengths………………………………………………………………………………….1.. Competitive Review……………………………………………………………………….... Objectives………………………………………………………………………………. Product Review……………………………………………………………………………. Exhibit D: Chili‟s Herfindahl Index……………………………………………………. Exhibit A: A View of Chili‟s……………………………………………………………….4 1. Threats……………………………………………………………………………………......2 Table of Contents 1..10 4.5 2...7 3.8 4..2..... Current Marketing Situation…………………………………………………. Market Description……………………………………………………………………. Objectives and Issues…………………………………………………………………………....3.4..3..2. Appendix………………………………………………………………………………………...1. Weaknesses………………………………………………………………………………...5 2.3. Distribution Review……………………………………………………………………….....1....7 4. Opportunities………………………………………………………………………………......3 1..5.7 3..4...9 4....3 1.8 4. Works Cited………………………………………………………………………………11 ..1..........2...6 2.6 2.. Exhibit C: Chili‟s Product Lifecycle…………………………………………………….

The menu features items such as “Texas Cheese Fries. Chili‟s interiors are well lit and make use of wooden floors. Guests . Chili‟s serves large portions and utilizes the color of its ingredients for presentation. These restaurants are configured to attract a wide array of consumers in middle America though young adults and families are generally the most highly valued groups (Industry Profile: Casual Restaurants.3 1. Chili‟s targets the 18-54 year old age group which comprises about fifty percent of the American population (“Brinker International Inc. steaks and sandwiches that cater to the southwestern and Tex-Mex theme (Menu. countertops and tables to create a warm atmosphere.1 Market Description Chili‟s Grill and Bar (Chili‟s). 2011). 1. there appears to be little disparity among the number of ethnic groups that patronize Chili‟ s which indicates the chain is able to attract a variety of customers regardless of geo-demographic location.   (MRI + MediaMark. The atmosphere is fun. Chili‟s). College Graduates were 30% more likely to have purchased a meal at Chili‟s in the last six months of 2010. salads. Households with aggregate income greater than $150. Women between the ages of 18 and 54 were more likely to have purchased a meal at Chili‟s in the last six months of 2010 compared to men of the same age group. According to MRI+ data. Chili‟s).000 were 43% more likely to have purchased a meal at Chili‟s in the last six months of 2010. Leisure and Sports 2010) Chili‟s targets a broad audience as part of its business strategy. Current Marketing Situation 1. inexpensive meal if cooking is not an option. Chili‟s‟ target markets: the following is an analysis of the chain‟s most salient customer groups within the 18-54 year old age range based on whether the customers had purchased a meal from Chili‟s within the last six months of 2010. kids‟ menus and promotional coupons. burgers.S. operates within the casual dining industry: primarily full service restaurants offering decent quality food at affordable prices (Industry Profile: Casual Restaurants. Parents with younger children are among the groups that are increasingly time poor. the food tastes good and is relatively cheap for those with more disposable income (college graduates/professionals). (Brinker). seafood. Professionals were 44% more likely to have purchased a meal from Chili‟s in the last six months of 2010. Young professionals visit Chili‟s for lunch and happy hour with co-workers when their schedules allow.” “Margarita Chicken Tacos” and their heavily promoted baby back ribs .. Compared to the general U. Families enjoy Chili‟s‟ friendly environment.2 Product Review Chili‟s serves southwestern and Tex-Mex style dishes emphasizing “bold flavors that will satisfy any appetite” (Brinker International Company Report. but continues to use plastic basket s for items like hot wings. Chili‟s has an all-day menu and consistently offers special deals such as the current twenty dollar dinner for two (Menu. Chili‟s appears to be more popular among women because men generally prefer sports orientated restaurants such as Wingstop. Inc. as a subsidiary of Brinker International. People view Chili‟s as a place they can go any night of the week for an easy. walls. This is one way Chili‟s positions its products—traditionally American food with a splash of ethnic influence.” 2011). but additionally includes a variety of soups. 2010). adult population:    18-49 year olds were most likely to have purchased a meal from Chili‟s in the last six months of 2010. so a convenient meal at Chili‟s is often attractive. The restaurant uses ceramic plates and bowls for most of its dishes. 2011). Finally.

inexpensive and good-tasting meal. Casual dining is a mature. revenue of $7.33 Billion and a 0.3 Competitive Review The casual dining industry includes more than 200. revenue of $3. As a final point. The fragmented market is illustrated in the market share percentages. There are also expected service guarantees such as a free dessert if a customer‟s food takes too long to prepare. The top four companies only make up 8% of the entire casual dining industry.76 Billion and a 1. Inc. For example. revenue of $2. Casual dining is highly fragmented with the 50 largest companies accounting for about 20% of the market (Industry Profile: Casual Restaurants). 2010). revenue of $1. the key competitors for Brinker International. 1. Local casual restaurants though are constantly prospective competitors on a smaller scale. .000 establishments that generate $190 billion in revenue annually (Industry Profile: Casual Restaurants). it has considerable market share and the growth of the casual dining market is relatively low. Every food service establishment must comply with the appropriate laws and regulations that govern it. fun a nd hospitable experience for people looking for a convenient. Although the majority of restaurants in the industry are not large chains like Chili‟s. Brinker International Inc. while a restaurant with one location cannot compete with Brinker the corporation. Currently.7% market share (in 2010). restaurants must use food in the order it is received from suppliers and the maximum amount of time that food is allowed to be exposed to temperatures between 40 and 140 degrees Fahrenheit is four hours (Food Code 2009). and Brinker International as a whole. however. The industry is monopolistically competitive.63 Billion and a 1.45% market share (2010) DineEquity: Applebee‟s and IHOP. most of the restaurants are seen by consumers as substitutes to some degree. The top tier of the market is currently laid out as follows:   Darden: Red Lobster and Olive Garden. are the casual dining restaurants under the ownership of OSI Restaurant Partners. 2010).91% market share (2010) Brinker International: Chili‟s. there are a handful of clear front-runners within the industry.4 can also order food for pickup over the phone or internet. is considered the third most successful company in the industry based on 2010‟s year-end revenues and market shares (Industry Profile: Casual Restaurants).50 Billion and a 3. meaning that Chili‟s has an unusually high number of competitors beyond the largest companies (Hoover‟s Company Overview. Romano‟s Macaroni Grill. it can compete with the Chili‟s down the street. the current standing of Chili‟s. 2010) Based on this data. this is the warranty or product guarantee that Chili‟s‟ guests receive. Maggiano‟s Little Italy. reflects well on the corporation and displays the strength of their products and services.   (Hoover‟s Company Overview. With such a large quantity of competitors with similar statistics. Each Chili‟s location is equipped with a bar offering a full selection of alcoholic beverages. there are no large corporations that could be prospective competitors. The chain is well established and stable. Chili‟s provides a relaxed. Darden and DineEquity.95% market share (2010) OSI Restaurant Partners: Outback Steakhouse and Carrabba‟s. Chili‟s is considered to be in the maturity phase of its product life cycle. Thus. It seems that the predominant competitive strategy in the industry is to invest heavily in marketing and advertising efforts to direct customers to their restaurants and steal the competition‟s customers (Hoover‟s Company Overview. saturated market making entry difficult.

First. Chili‟s). During the month of September. bar lounge areas. 2011”). “Big Mouth Burgers are better than ever. Chili‟s also has the same menu in every location which allows for consistency among its different locations ( “Chili‟s”. never-frozen 100% USDA Choice beef” (“Food Made with Quality Ingredients. order at the bar. which differentiate Chili‟s from its competitors that offer more Americanized cuisine styles. jewelry. “Chili‟s ToGo nationwide. Chili‟s). and online orders for pickup (About us. and accessories (Chili‟s merchandise. offering online ordering that guests can then pick up. they can be confident of their expectations. there are three services and products with multiple channels each.5 1. No matter which location a customer visits. “On an operations level. phone orders for pickup. Second are the to-go options. giving their customers an alternative ordering option and another way to sell their merchandise. Another one of Chili‟s strengths is its Tex-Mex inspired food and its full bar. the company has focused increased resources on menu innovation and improving its customer service” ( Euromonitor International. Finally. Jude Children‟s Research Hospital. This targets lunch guests who may not have time for a full-service meal (Euromonitor International. the distribution of Chili‟s‟ products and services does not have a propensity for new developments. but not limited to. One of Chili‟s newest strengths that was formerly a weaknesses was that much of their food was premade or frozen. and through effective advertising efforts and specials promotions. They use their website to sell Chili‟s labeled and themed merchandise including. Chili‟s appeals to a broader customer base through its support of St. or eat in the bar lounge (About us. they also have a diverse line of merchandise. consumers are aware of and responsive to Chili‟s and its products. An individual can walk in to order. they were able to add product value in consumer‟s minds. 2011). Chili‟s promotes the Create-A-Pepper campaign for St. We make„em with fresh. bars with different menus. drink ware. order on the phone. public attractions. Brinker has done a great job of this especially during the recession. 2011). is in the restaurant. The company has raised 35 million dollars to date and hopes to raise 50 million dollars by the ten-year mark of inception of the program (“Chili‟s Grill & Bar Participates in Create-APepper Campaign for St. To dine in the restaurant you can sit in the dining room. Chili‟s). The website is a newer development that Chili‟s is attempting to utilize. 2011). movie theaters. This is a strength because having this curbside pickup available to customers allows them to target a greater variety of customers. the company came out with. Chili‟s can leverage the appeal of corporate-social responsibility and has . Another strength of Chili‟s is that during the recession. Due to the traditional nature of restaurants. Recently they came out with the statement. Website development is the newest feature in Chili‟s‟ distribution channels. apparel. Chili‟s).1 Strengths Due to a powerfully positioned brand.4 Distribution Review Chili‟s‟ distribution channels includes sit-down restaurants. which has allowed them to penetrate their market and in turn create customer loyalty. The channels of distribution for merchandise include buying it at the restaurant or on the Chili‟s website (Chili‟s Merchandise. 2. 2011). or order online for food to go (Online Ordering. Jude”. To categorize each distribution channel. Chili‟s). Chili‟s has been able to build its brand through strategically placing their restaurants at locations near shopping centers. Although these burgers may not be much healthier. Third is the Chili‟s merchandise. Jude‟s Hospital. SWOT Analysis 2. Chili‟s p roducts are not limited to food.

credit card receipts and other tender recognized by defendants prior to the close of that server‟s shift. Chili‟s is currently testing new combination ovens that will replace current skillets and smokers. which includes the Caribbean and Asian salads. chain restaurants can focus on international markets overseas and expanded menus (Anonymous. The chain is also getting prepared to test new fast food-like conveyor belt technology. 2011). etc. price. affordable. 2011). convenient and fast (Wright. 2011). This would allow Chili‟s to better compete with semi-fast food restaurants which include Chipotle. If it happens again the employee may be terminated (Holter. which makes it harder to reach out and target higher income segments.6 successfully attracted many guests into their restaurants through this effort by offering a “feel-good incentive” to purchase their products (“Chili‟s Grill & Bar Participates in Create-A-Pepper Campaign for St. which may turn off customers who know the food is not fresh. customers. This lawsuit may have negatively changed customer perceptions about the company‟s business ethics. Showing the nutrition facts could be a turn-off for many potential or current customers. Jude”. One reason for this perception is that some of Chili‟s foods are known to come frozen or premade. 2. with today‟s more health conscious society. Additionally.3 Opportunities Global market: The casual dining industry will be characterized for the next five years by high competition. It is also Chili‟s policy that if a customer leaves the restaurant without paying their bill. target markets. Technology: To decrease the cost of employees performing solo tasks. the server must either pay for the walkout or be written up (Holter. because it is on the cheaper side of the chain restaurants it has a perception of being low quality. Health-conscious market: The current time poor society is eating out more frequently than in years past. and Subway. 2. These ovens can cook necessary food at three times the old capacity. 2009). atmosphere. People are struggling to eat health consciously with many restaurant meals having twice as many calories as their home cooked counterparts.S. This is a weakness because Chili‟s tends to have a menu consisting of foods that are very unhealthy. state and local divisions that would mandate the provision of calorie and nutritional information on restaurant menus and menu boards” (Burton. . This would allow line cooks to prepare more meals more efficiently (Jargon. “many restaurant retailers now face potentially significant market changes due to legislation proposed by the federal. These restaurants offer more items that are reasonably healthy. In order to profit in the current marketing environment with the loss of many health conscious U.2 Weaknesses Although Chili‟s has tried to differentiate itself from competitors through its unique style of Tex -Mex food. Chili‟s has a good opportunity in repositioning its guiltless grill line. it is still very similar to its competitors in food quality. 2011). the server is responsible to make up that shortage even if the loss was not the fault of the server or was due to the simple negligence of the server” (Holter. In addition. Also. along with a few other healthy and reasonable items. “in the event the server has suffered loss of money. According to the lawsuit it is Chili‟s policy that. An example is Chili‟s‟ grilled barbecue chicken salad which has 1050 calories or over half of the average persons daily recommended intake. Panera Bread. Chili‟s has a current labor lawsuit that has brought negative publicity. 2011). 2011). 2011).

due to the current recession this number is expected to decline. Rising commodities include grains. In addition. .2 Issues According to the National Restaurant Association. bad weather in agricultural regions. 2011). cheese. 2009).1 Objectives Chili‟s strives to remain true to its roots through establishing a consistent dining experience and a casual burger joint feel (Brinker 10K). would now qualify for health insurance at the expense of their employer (Jargon. 3. In addition. and meats (Jargon. but there is an abundance of dining options that are faster and less expensive than Chili‟s. Government regulations: The new universal healthcare law may be one of the biggest and most costly threats to restaurant chains in the near future. Chili‟s emphasizes their focus on offering a quality meal in order to establish long-term brand success. Market competition: the restaurant industry is a monopolistically competitive market. This physiological need for food creates very high competition for the restaurant industry as opposed to an industry that sells luxury items. Another issue Chili‟s faces is the tremendous amount of competition. Current market factors including high unemployment. Lastly.4 Threats Cost of raw materials: Restaurants are looking to negotiate price floors and ceilings for commodities. Management can measure progress through comment cards. 3. sugar. restaurants are very labor dependant and are highly vulnerable to new laws. weak home values and consumers looking for good deals have made raising prices at restaurants very risky. regulations. and macroeconomic factors (Jargon. by recording which menu items are ordered and comparing sales between franchise locations. Brinker International‟s goal is to differentiate Chili‟s image within the eighteen to fifty-four year old age group and create a strong presence domestically and internationally (Brinker 10K). This restaurant‟s menu focuses on bold flavors and Tex-Mex inspired meals intentionally connecting every franchise to the original Chili‟s in Dallas. These other alternatives may deter Chili‟s target market from eating at their restaurant or responding to Chili‟s marketing campaigns particularly in a weak economy. This cost saving strategy is in attempt to combat a rise in demand for protein rich foods. In addition. This means that many rank-and-file employees who are not covered. 2011). these products are considered to be substitutable.7 2. often more than customers demand in a given time period. Brinker International wants to expand the reach of its locations beyond the major metropolitan areas and create stronger name recognition. many large restaurants are looking to buy essential items in large quantities. technologies to turn corn into ethanol and investors have helped boost the price of many food commodities recently. government health regulations. Restaurants with fifty or more workers would have to provide health insurance to employees who work more than thirty hours per week. Although different restaurants are considered to have different products. as many Americans are willing to eat at home in order to save money. which is eighty percent industry wide. Objectives and Issues 3. 2011). In turn. However. Americans spend 48 cents of every food dollar at a restaurant (Slade. restaurants have very low profit margins since many of them have closely related products. Not only must Chili‟s compete within the casual dining industry.

1Exhibit A: A View of Chili’s Chili‟s Logo and a Typical Location: Typical Menu Items: .8 4. Appendix 4.

Outback Steakhouse I. Red Lobster J. BJ‟s C. Friday‟s . Cheesecake Factory D. Applebee‟s B. Denny‟s G.I.9 4. T. Ruby Tuesday K. Chevy‟s E. Olive Garden H. Chili’s F.2 Exhibit B: Multi Attribute Positioning Map: Casual Dining Industry High Value Price Food Quality C F HID J DBHG JKEIA CDH B IGJKAEB KABCEF G AEKI CDGH F F Importance Convenience Service Atmosphere F F J J DKEAIB AKIHE D HGC BGC Variety Health F HIGD F GJKHDBAE I JKBEA C C Low Low Ranking High A.G.

10 4. this assumption is for illustrative purposes and does not take away from the substance of the calculation. .03952 + .4 Exhibit D: Herfindahl Index Calculation H   s 2i i 1 N For the 50 largest firms in the industry: H = . Because we know that nearly all the dining establishments in the industry have very small market shares (probably smaller than .0072 + (. which indicates a monopolistically competitive industry. we can tell that the Herfindahl index would still be lower than .1%). we have included the market shares of the four largest corporations in the industry and then based the rest of our calculation on the assumption that all other companies have very small market shares (.000 establishments which complicates the calculation of the Herfindahl index because each company‟s market share is so small.1%).3 Exhibit C: Product Life Cycle Chili‟s Introduction Growth Maturity Decline Chili‟s still has some room for growth particularly on the international front.01912 + . The industry and company profiles provided by Hoover‟s supplied the numbers needed for the calculation.0012*46) = .0022 → monopolistic competition Note: The casual dining industry consists of more than 200. 4.15.01452 + . Therefore. However.

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Slade. 2011. 20 October 2011.Tribune Business News. Fall 2010 Product Report. Web. 11-17. Minus guilt. Securities and Exchange Commission.12 MRI+ MediaMark. Brown. Fluctuating Food Commodity Prices. “Ordering Online. Eating out. Hamilton. Retrieved October 20. from ABI/INFORM Global. Wright. from ABI/INFORM Dateline. Retrieved October 15. (2008. Bill. (2011. Amber Waves. McClatchy . Strategic Report for Brinker International. Liesure/Sports . 2011. (2009. November). April) Oasis Consulting.Restaurants: Bought at Last 6 Months Chili‟s Bar and Grill). Form 10k (1-10275). (2011). Inc. Chancellor. and Cherry. . 2011. Taylor.” Chili’s Grill and Bar Restaurant.. R. Washington D. from MRI+ MediaMark. October). Retrieved October 13.C. Middleton. Cameron. Trostle. Casey. Brinker International. 6(5).