I am student at Indiana University. I am currently taking a business
management class that involves a case study of a local business. I am
not asking you to do my work for me. I am asking you to get me started
by pointing me in the right direction, or preferably the right
directions as there are surely many solutions to the question posed.
Below I have posted the assignment, and all the background information
I was given. I have no conception of the common pitfalls that should
be avoided with the issuance of coupons. My hope is that someone with
experience in this industry will be able to share their experience. It
is my hope that in your answer you will be able to direct me to
resources online, as well as share some common coupon pitfalls and
fallacies, as well as times, instances, and settings where coupons can
really be the answer.
Let me know what needs clarification.
Effective use of Coupons:
While Puccini's Restaurants in Indianapolis do not use coupons,
Bucceto's has had some success incorporating them into the business.
Although coupons help bring customers in, Bucceto's is concerned about
sacrificing the brand image of the store. Bucceto's needs advice on
the following topics:
ˇ How can Bucceto's attract new business using incentives without
ˇ How does Bucceto's avoid coupon saturation, which could cause the
restaurant to be thought of as a discount store.
ˇ What is the most effective way to establish a coupon redemption
policy so that it is convenient for the store and so customers cannot
abuse the system?
ˇ What are the most effective distribution channels for distributing
coupons: Bucceto's bytes (email), inserts, in-store promotions, etc.
Buccetos- "We feel that when you eat at one of our restaurants, each
of your teeth should individually be happier than they have ever been
before. Your over-worked, over-taxed, under-appreciated teeth deserve
their own little smile. And indeed you shall have it here. That is our
mission statement, our credo if you will. Yes...that IS our credo."
- Bucceto's Smiling Teeth Website
"My plan is to open 100 stores over the next ten years....."
- Paul Heilbrunn
History of Bucceto's Smiling Teeth
Located on East 3rd St. at the 45/46 Bypass, Bucceto's opened its
first restaurant in Bloomington, Indiana in September 2004. It is a
sister store to Indianapolis based Puccini's Smiling Teeth.
Puccini's opened its first Smiling Teeth restaurant in March of 1991.
The Smiling Teeth menu specializes in innovative pizza and pasta
dishes, and salads of the highest quality. With a casual yet stylish
atmosphere, families, dates and senior citizens feel equally
comfortable dining at the restaurant. Puccini's quickly became known
for providing quality food at a reasonable price. In its second full
week of operation, Puccini's was reviewed by the Indianapolis Star and
received the paper's highest possible rating - '4 tines.' In August
of that first year, the paper recognized the restaurant for being one
of the ten "Hottest Restaurants in Indianapolis."
In the years since, Smiling Teeth Restaurants have continued to prove
the merits of its business model by expanding into ten locations. Six
stores are in Indianapolis, one in Fort Wayne, West Lafayette,
Lexington, KY and its sister store in Bloomington, IN called Bucceto's
Bucceto's differentiates itself from the marketplace by paying close
attention to quality. The company procures the finest ingredients
available in order to ensure its customers a quality product every
time. The company is able to invest freely in the finest ingredients
because of the way its business model is structured. The Puccini's
model saves a considerable amount of money by leasing properties in
in-line strip centers instead of purchasing free standing properties.
Puccini's is then able to use these savings to purchase the finest
ingredients possible in order to offer a high quality product.
Bucceto's is part of a niche segment of the restaurant industry that
has been classified as a quick casual restaurant, which management
believes is a high growth area in the coming years. There are several
factors which management believes will contribute to exceptional
ˇ The number of meals being consumed outside the home. This number
will only continue to rise as more women enter into the workplace,
fewer families sit down together for meals, and disposable income
continues to increase versus available time. These factors have led
some restaurant industry experts to predict that more than fifty
percent of meals will be consumed outside the home.
ˇ The quick casual sector continues to capture more market share
within the industry. Quick casuals, such as Panera Bread Company and
Puccini's, continue to grow due to their broad demographic appeal.
Quick casual restaurants have rapidly become the favorite of baby
boomers, dual-income families, and single young professionals.
ˇ Customer demand. Both explicitly and implicitly, consumers have
expressed a strong desire for better tasting food than is offered by
fast-food restaurants. This demand is evidenced by market share gains
made by casual diners versus the quick serve segment. This trend can
also be seen by examining the changes fast-food restaurants have been
making to improve their quality and transition themselves to become
quick casual restaurants.
Bucceto's target market consists of three groups: baby boomers,
dual-income families, and single young professionals. These groups
have continued to identify themselves as those who possess higher
amounts of disposable income, and prefer to pay a premium for quality
When determining the potential size of the market for the Company, the
two primary segments to examine are the baby boomers and dual-income
families. While there is a significant amount of overlap between
these groups it is still important to examine the respective
Of the 281 million people living in the United States, approximately
76.5 million are baby boomers, making up over 25% of the population.
In Indiana, there are 1.6 million baby boomers out of the state's
total population of 6.1 million. While Bucceto's has not decided
which markets to enter next, Indiana's neighboring states have baby
boomer populations which account for more than 25% of their entire
population. Illinois has a baby boomer population of 3.5 million out
of 12.4, Kentucky 1.1 out of 4, Michigan 2.8 out of 9.9 and Ohio 3.2
out of 11.3. As for dual-income families, of the approximately 56.5
million married couples in the United States nearly 61% are
Bucceto's faces competition from several restaurants in the
Bloomington area, which also have multiple locations throughout the
Midwest. In addition to the casual dining franchises that exist in
the Bloomington area (Chili's, TGI Fridays, etc) and are focused on
traditional American fare, the following restaurants represent the
nearest competitors in the Italian and Casual Dining segments.
ˇ DeAngelo's - DeAngelo's Pizzeria Company was founded in Baton
Rouge, LA in October of 1991 by Louis DeAngelo, Jr, a New Jersey
native. Because of the background of the founder, DeAngelo's claims
they have the "flavor of New York with the hospitality of the South."
Within Louisiana the company is very successful with 12 different
restaurants within the state. A franchise was brought to Indiana by
Gerry and Terri DiNardo and is the only franchise north of Alabama.
Their menu includes items such as salads, calzones, pizza and
antipasto. They also serve beer and wine. Additional information can
be found at www.deangelosbloomington.com.
ˇ Avers Gourmet Pizza - In 1995, Aver's founders, Brad Randall and
Kris Kaiser, saw a business opportunity when a low-priced pizza joint
went bankrupt and left a turnkey setup behind. Using unique items
such as red potatoes, zucchini and black beans, a core of signature
offerings were born and became the foundation for the menu as it
exists today. In 1999, the Aver's Cream and Crimson Pizza won in the
exotic category at the Pizza Festival in Las Vegas. Avers owns two
locations in Bloomington and an additional locations in Columbus and
Louisville with additional opportunities to franchise. Avers delivers
throughout Bloomington with several custom as well as standard pizzas.
More information can be found at their website: www.averspizza.com.
ˇ Panera Bread - Started in 1981 as the Au Bon Pain Co., Inc, the
company grew nationally and internationally throughout the 80's and
90's. In 1993, the company purchased the St. Louis Bread company with
19 stores. In 1999, the company sold off the Au Bon Pain Division and
changed its name to Panera Bread. Headquartered in Richmond Heights,
MO, Panera has, as of the end of 2004, 741 café-bakeries nationwide
and has grown significantly each year since 1999 and continues to do
so. Weathering the low-carb storm, Panera has thrived in its offering
of upscale breads, bagels, coffee, sandwiches and salads for the quick
casual market. More information can be found at www.panera.com.
Bucceto's features a unique menu with fresh ingredients including
homemade dough, slow simmered sauces and homemade salad dressings.
Its menu includes a wide selection of appetizers, soups, salads, and
chicken dinners in addition to the pasta, calzones and pizzas the
Smiling Teeth franchises are known for. Pizza selections range from
standard options to unique combinations with names such as "Zorba the
Pizza" and "Panama Red". The Smiling Teeth menu has also expanded
over the years to include Atkins diet meals, which have shown to be
popular. Beer and Wine can be ordered at the store and dine-in,
pick-up and delivery options are available. Delivery also includes
catering for office and student events, and all deliveries have a
charge of $1.50 and a minimum order requirement of $10. Payment
options include cash, all major credit cards, student access cards,
gift cards and personal checks. Additional information can be found
on their website: www.buccetos.com.
Monday through Friday, Bucceto's offers a lunch special that offers
customers a large slice of the day's pizza by the slice - always a
meat topping, always a veggie - a fresh garden salad with a choice of
homemade dressing and a large soft drink, all for only $5.75. The
slices of the day are shown below.
Slices of the Day:
Monday - Giacomo / Veg-Head
Tuesday - Bar 20 / Margherita
Wednesday - Bacon & Gouda / Spinach, Feta & Black Olive
Thursday - Razorback / Mushroom, Basil & Fontina
Friday - Extra Pepperoni / Humble Pie
Bucetto's uses a variety of marketing mediums to promote its
restaurant including print advertisements and direct marketing to
initially promote its stores. To entice customers to continue to
patronize its locations, the Company employs an e-mail marketing
campaign to stay in touch with customers and promote different
programs. Bucceto's website has a number of promotions available where
customers can browse and find deals and information.
Bucceto's Bytes: Provide Bucceto's with an email address and the
Company will send up-to-date information on new items, specials,
events, and just about everything cool they have to offer. This email
is not shared with any other businesses.
Bucceto's Birthday Club: Customers can sign up for Bucceto's Birthday
Club and receive a free dessert plus a $5 coupon to use on an order of
$20 or more which can be redeemed any time during the month of your
Late Night Special: Dine-In Customers can save 25% on pizza and
calzones after 9:00pm. This promotion is currently running until May