I was forwarded this article about a restaurant using promotional products (22,000 mugs) to drive profits and a branding strategy. I hope you enjoy reading about the power of promotional products and branded merchandise.
Another Broken Egg spreads brand awareness with mugs
The breakfast and brunch chain has found profits and a branding strategy by selling logo mugs in its restaurants
April 9, 2012 | By Mark Brandau
Another Broken Egg has found that the mugs it sells in its restaurants, emblazoned with its logo, are a profitable sales and branding strategy.
The Destin, Fla.-based breakfast and brunch specialist sells 22,000 specially made coffee mugs per year in its 20 locations. Each mug is branded with Another Broken Egg’s logo and an emblem of the town that is home to each individual restaurant. Customers have taken to collecting them from each location, paying $18 per mug.
Merchandising has long been a popular form of advertising for restaurant chains, from consumer packaged goods on grocery store shelves to the once-ubiquitous T-shirts from Hard Rock Café and Planet Hollywood. In its most recent second quarter, family-dining chain Cracker Barrel Old Country Store derived 25 percent of its sales from its retail store; same-store sales rose 3.4 percent for the quarter.
Another Broken Egg’s founder and chief executive, Ron Green, said the profit margins on the mug are favorable, but the real return on investment multiplies when the mugs help the brand’s word-of-mouth proliferate across the country.
“Truly, it’s about the branding and having people wanting to collect them from all over the country,” Green said. “Like a Hard Rock Café T-shirt, they set us apart from our competition. It gives us a more upscale look, and people love them.”
Green first encountered the handmade coffee mugs in 1996. He was vacationing at a bed and breakfast in Taos, N.M., when he was served with one of the mugs and was impressed with its craftsmanship, he said. Inquiring with the hotel’s owner led Green to the mug’s producer, Deneen Pottery in St. Paul, Minn.
Green placed an order for 100 mugs, the minimum amount Deneen would agree to produce, and they began flying off the shelves.
“We sold out in two weeks at $16 a piece,” Green said. “An employee said, ‘We may be able to have these in the store, serve coffee in them and sell even more.’ So we ordered another 200 to use on our coffee tables. And 250,000 coffee mugs later, we have a hit.”
In 16 years, the price of the mugs has gone up only $2, and with 20 locations, Another Broken Egg can sell 20 different mugs to customers keen on traveling around to different locations. Each restaurant’s mug has an individualized emblem, such as a giant water wheel for mugs in the Birmingham, Ala., unit, or a movie reel at the Burbank, Calif., location.
Different mugs not only have encouraged some guests to travel to find other Another Broken Egg units, but also carried the brand’s story beyond the reach of the company’s radio and TV commercials into new markets.
“We’re a young and emerging chain, and for the first five years, we did very little marketing,” Green said. “Basically, it was all word-of-mouth, and that’s probably the strongest advertising you can do for a company like ours.”
As Another Broken Egg looks to enter new markets, such as Denver, the mugs will play a big part in branding and building awareness to new customers and potential franchisees, Green noted. The mugs are a long-term strategy with an incremental lift to the bottom line, he said.
“You can buy a $20 T-shirt for us, and it lasts a year and a half,” he said, “but these mugs don’t wear out for a lifetime. We’re thrilled with the durability.”
Green founded Another Broken Egg in New Orleans in 1996.
Read the full article here: http://tinyurl.com/7one3a9