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.
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.
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.
Word Of Mouth/In-Store Marketing
Local Store Marketing
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.
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.
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.
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.
Opening day for our first store is scheduled for July 1, 2001.
The following table lists important milestones, with projected dates, management and budget responsibility. The milestones schedule indicates our emphasis on planning for sales strategies.