The million dollar questions in
the restaurant industry are, “how to
encourage more patrons to frequent my establishment and spend more while they
are there?” New research helps to identify and establish important factors
for restaurant owners to consider when operating their businesses.
Understanding which factors relate to consumer decision making is important for
adjusting restaurant operations to highlight particular benefits and capitalize
on the potential rewards.
The restaurant and service
industry is growing faster than any other major industry in the country. When
compared to other industries in the sluggish economy the food service arena has
maintained sales increases (National Restaurant Association, 2009). This makes
the restaurant business one of the best investments during tough times as volume
continues to increase. To maintain that volume and profit level requires a
focus on core business offerings.
Most of us know that improving customer satisfaction
can increase patron retention. The process involves understanding customer’s
needs and expectations better than the competition in order to enhance them for
maximum benefit (Yang, Cheng, Sung & Withiam, 2009). Those establishments
that are customer driven and customer focused have higher levels of market
advantage. Yet it is hard to know precisely what increases the purchase and
frequency rates.
Foodservice products can be seen
from a particular perspective. They can be broken down into categorize of core
benefits, tangible benefits, and intangible benefits (Kotler, 1998). Core
benefits are the product/service, tangible benefits are the servicescape, and
intangible benefits are the customer experience/interaction. Understanding each
of these helps to see how they influence each other without damaging core
business focus. No one should take their eye off of the ball in their search to
develop higher levels of service experience.
As manager focus on understanding the pieces that
answer the fundamental questions of frequency and increased spending they
sometimes forget these core business principles. The type of restaurant and the
demographic they serve are important aspects of understanding the context of
other service enhancements. Each customer chooses their restaurants based upon
personal preference and want to ensure that their expectations are being met.
Research conducted by Parsa, Gregory, Self &
Dutta (2013)) attempted to determine precisely what are the most important
factors in consumer decision making processes. In other words, when customers
were making a choice what type of process did they engage? In order to test this
concept the researchers focused on scenario bases experimentation where they
used a high-end and low-end restaurant to assess client’s intentions to
patronize and return to the establishment. They settled on eight possible
combinations for two levels of restaurant attributes. A total of 190 cases were
analyzed from each of the restaurant types.
Results:
-Customers were willing to spend more if the high-end
restaurants focused on food quality while the low-end restaurants focused on
speed.
-In the high-end category customers were willing to
pay an extra $23.59 if the food was of exceptional quality while customers in
the low-end category when services was fasters $2.47.
-Customers from high-end restaurants with high
quality food and low-end restaurants with the quickest speed indicated a higher
expectation to return.
Business Analysis:
Understanding the core strengths of a restaurant
helps managers understand where to place their focus in developing higher
levels of customer satisfaction. Through all of the possible combinations
high-end restaurants that offered expensive food should focus on quality while
low-end restaurants that focused on cheaper food should focus on speed. Other
service factors didn’t matter as much as these two polarities. As customers pay
more for their food they expect a higher level of taste and benefit. When
customers pay less, customers want the service to be quick. Putting too much emphasis
in the wrong places without realizing their secondary benefits will be a waste
of money, time, and effort. This may be one of the reasons why establishments
such as McDonalds focuses on processes and restaurants such as Andiamos focuses
on the quality of the chef and food offerings.
Kotler, P. (1998) ‘Marketing
Management: Analysis, Planning, Implementation, And Control’, Englewood
Cliffs, NJ: Prentice-Hall, Inc.
National Restaurant Association
(2009) online http://www.restaurant .org
Yang, C., Cheng, L., Sung, D.,
and Withiam, G. (2009) Strategic pricing policy based on analysis of service attributes. Cornell
Hospitality Quarterly, 50 (4).
Parsa, H., Gregory, A., Self J. & Dutta, K.
(2013). Consumer behavior in restaurants: assessing the importance of
restaurant attributes in consumer patronage and willingness to pay. Journal of Service Research, 12 (2).
