The Billabong, an Australian restaurant, was established twenty years ago by Keith Dusty, a famous Australian country music singer and son of a farmer. Dusty wanted to create a restaurant that provided healthy homestyle meals and supported Australian country music. The Billabong is so popular that celebrities visit the restaurant in Bondi, New South Wales, and have their photograph taken and hung on the walls. The high-quality interior decoration makes customers feel like they are visiting the Australian outback and live music by local country music artists is provided on weekends, for a compulsory cover charge of $10 per person. Five dollars out of every $10 cover charge goes directly to the musicians. The menu is mainly healthy and traditional ‘farm-to-plate’ food. Popular menu items include the ‘Australian Lamb Burger,’ the ‘Vegetable Garden Soup with Damper’ and ‘Homestead Apple Cinnamon Crumble.’

The pandemic caused a dramatic drop in local customers dining at the restaurant due to the ongoing lockdowns and border closures. Dusty has been approached by online delivery services such as UberEats, but he has refused to provide takeaway food because he wants customers to have the ‘complete outback experience’ at the restaurant, and because he wants to continue supporting live Australian music.

The Billabong’s prices are far below its competitors. As a result, the restaurant isn’t making enough to produce sufficient cash flow without the live music cover charge. The Billabong’s food prices are almost 50 percent lower than its competitors, even though customer surveys show that customers think their food is cleaner, healthier and tastes better than their competitors. Without sufficient revenue, Dusty knows he will have to close the restaurant. He needs to figure out how to bring in more revenue.

Government pandemic regulations prohibit restaurants from providing a seated table service, and also prohibit live music in venues. However, restaurants are permitted to provide take-away meals, which can be collected by customers or by a meal delivery service on behalf of the customer. Meal delivery services, such as UberEats, have boomed during the prolonged lockdowns. Dusty has hired a marketing consultant to assist him. The consultant has provided him with the following report:

Target market: local households of 3 or more people, comprising families with children or couples aged 20 to 70 seeking convenient but reasonably healthy takeaway food during lockdowns. The fast food unhealthy market is completely saturated.

Demographics: Time-poor households who are seeking healthier food options during lockdown. People wanting to support local businesses and the local music industry. People willing to pay a premium for healthier food. People who like country music. People who are bored with existing takeaway options.

Competitor Analysis:

Competitor Name	Comparative Strengths	Comparative Weaknesses
Local Italian, Thai and Chinese restaurants	Fast, inexpensive Available via UberEats	Somewhat unhealthy
Local gourmet health food providers	Healthy, caters for dietary requirements (eg dairy free, gluten free) Uses local ingredients	Very expensive Food is usually frozen Not available via UberEats Usually requires lengthy pre-order time (weeks not minutes)
Local ‘fast-food’ providers (eg McDonalds, KFC)	Fast, inexpensive Available via UberEats	Very unhealthy

Excluding ‘fast food’ options (such as McDonalds and KFC), the restaurant takeaway market for healthy food options is presently under-serviced. There is potential for previous restaurant revenues to be replaced by equivalent takeaway revenues, even considering that people tend to order less when ordering takeaway compared with dining in at a restaurant.

Musicians who previously performed at the restaurant are willing to perform online concerts exclusively for The Billabong’s customers for a fee of $2 per patron, rather than the previous $5 per patron because of cost savings with moving to online performances.

An online meal delivery platform partnership would allow the restaurant to boost its visibility (through the UberEats app), connect with customers (through UberEats’ database) and facilitate customer feedback (through online post-delivery reviews). More than 40 percent of adults now use online meal delivery apps. The cost will be 30 percent of each order for UberEats to deliver all food on behalf of the restaurant, The restaurant would also have to develop a take-away menu and packaging options, at an upfront cost of $1,000.

Consultant’s advice

The consultant advises that The Billabong should:

1. Offer takeaway and delivery options during the pandemic.
2. Raise menu prices to emphasise the quality of The Billabong’s menu compared with fast-food takeaway options.
3. Continue to bundle food with live music via exclusive live online music performances for patrons.
4. Adopt a penetration pricing strategy to attract more customers to the takeaway option initially.
5. Ask a music celebrity who has previously dined with The Restaurant to write a review of the restaurant’s new takeaway menu and emphasise the need to support local artists.

PART A, SHORT ANSWER QUESTIONS

1. Discuss and explain what marketing concepts you could deploy to try to solve The Billabong’s marketing problem. Would your answer differ if The Billabong were a global franchise? Provide reasons.

2. What sort of internal and external market research does The Billabong need to solve their marketing problem? Provide reasons.

3. Analyse the components of the marketing mix that The Billabong should be using to promote its product. Support your answer with theories and evidence.

4. What do the firm’s marketing records tell you about the positioning of the company in the market? What additional information do you need to provide sound marketing advice to Dusty? Provide reasons.

PART B, MARKETING ANALYSIS

1. Critically evaluate each of the five strategies suggested by Billabong’s marketing consultant. Clearly state whether you think each strategy will be successful or not, and why. Provide reasons, theories and evidence to support your answer.

2. Perform a marketing analysis on The Billabong restaurant and formulate a marketing plan by analysing the current marketing situation, performing a SWOT analysis, and by considering objectives and mission, budgets, and controls.

Answer rating: 100% (QA)

1 Marketing concepts that could be deployed to solve The Billabongs marketing problem include segmentation targeting and positioning STP the 4Ps of marketing and the marketing mix Segmentation involve... View the full answer