Research Korner: Restaurant Industry

MANAGEMENT OF CHANGE: THE CAFÉ DE CORAL EXPERIENCE

MANAGEMENT OF CHANGE: THE CAFÉ DE CORAL EXPERIENCE Table of Contents   I.      Introduction.. 3 II.     Background of the Company.. 4 III.        Diagnosis.. 5 A.    External Change Drivers. 6 1.     Political Factors. 6 2.     Economic Factors. 6 3.     Socio-Cultural Factors. 7 4.     Technological Factors. 7 B.    Internal Change Drivers. 8 Figure 1. Ansoff’s product/market Matrix. 8 1.     Market Penetration. 9 2.     Market Development 9 3.     Product Development 9 4.     Diversification. 10 C.    Current State. 10 1.     Strategy. 10 2.     Structure. 11 3.     Systems. 11 4.     Shared Values. 12 5.     Skills. 12 6.     Style. 12 7.     Staff 13 D.    Source of Resistance. 13 1.     Endings. 14 2.     Neutral Zone. 14 3.     New Beginnings. 14 E.    Leadership in the Company. 14 IV.       Prognosis.. 15 A.    Status Quo Scenario.. 15 B.    Change Scenario.. 15 V.    Conclusion.. 16 VI.       References.. 16   I.      Introduction The realm of the fast food industry, the current trends brought about by western monoliths like McDonalds has been the prevailing formula. Specifically, serving dishes that are easy to prepare and serve such as sandwiches, deep fried foodstuff and other pasta-based products are those that fit the requisites needed in the formulaic process employed in such types of industries. However, one must also highlight that the advantage of these types of companies are not limited to their products and the dishes that they serve. These are only a fraction of what make them leaders of the industry. To be precise, it is this efficiency and quality that places these western companies in the top of their game. This primarily establishes the fact why their respective operations and processes are considered as the prevailing models in the fast food industry.    This problem brings forth a limited number of food genres that would fit the classification as a fast food company. In Hong Kong, a local company, Café de Coral, attempted to dispel the myth that such dishes that offer oriental cuisines will not complement the processes inherent in the fast food industry. This study will be taking a closer look in the existing conditions that Café de Coral is experiencing in their daily operations. The said name is under a corporation controlling various types of stores in the food industry. For the purposes of this paper, the focus of the study will be the Café de Coral based in Hong Kong. The arguments and observations held in this paper shall be reinforced by existing literature on organisational development and change management.    II.    Background of the Company Café de Coral is said to be the largest group of Chinese restaurants in Asia and the rest of the world. The company is listed under the Café de Coral Group in the Hong Kong Stock Exchange. The said company covers fast food, institutional catering, specialty restaurants, food manufacturing, and distribution among others. For the purposes of this study, the focus of the discussions will be the fast food operations of the company. The first store of the company commenced in 1968 on Causeway Bay. After several decades, the company controls over a hundred and twenty restaurants which serves drones of satisfied customers in a daily basis. Based on the company’s website, the current battle cry of the organisation is “A hundred points of excellence.” This is driven by the desire to provide imminent customer satisfaction by constant improvement in the quality of their products, the service that they provide, and the ambience in their restaurants. In doing so, the company makes their customers realise that the value of their money is given importance in the stores managed by the company.   The company has risen in the ranks of the food industry in Hong Kong because of the top products and services that they offer. In the area of products, the company flaunts of their signature products that are made with premium ingredients and prepared with the strictest quality control. The area of services is also one of the major factors why Café de Coral is at the top of its competition. With the motto mentioned above, continuous staff improvement through training is given the top priority of the company. It focuses on both individual and team skills of the company.   III.   Diagnosis In an article of Wong (2006), he coined the term “fast-foodization” as the process imposed by McDonalds in the modern food business. He also pointed out the phenomenon wherein exotic cuisines have become one of the major competitors of these big fast food companies in the West. Japanese, Indian, and Chinese restaurants which serve their respective local dishes directly take on the likes of Burger King and other major companies in the western world. This makes perfect sense as these exotic restaurants offer an alternative to the ubiquitous burger and fries offered by these established organisations in the fast-food industry. In order to establish the change needed in any company, an analysis of both the internal and external environment is required. In doing so, the specific areas on which companies like Café the Coral could pinpoint the specific parts of the operations that require improvements or reductions that will trigger change in the organisation. The following parts shall do exactly that, analyse both internal and external environments of Café de Coral to establish how it could initiate improvements in their operations. In doing the said discussions, the use of analytical tools such as the PEST Analysis, Growth stages, 7s framework, the company’s cultural web, transition curve, and the leadership theories and models implemented in the company. The findings in these discussions shall be the basis of the succeeding parts of the paper wherein two scenarios will be depicted.      A.   External Change Drivers To establish the existing conditions surrounding the external environment, the PEST Analysis will be employed. In doing the change drivers of the external environment shall be directly observed. 1.    Political Factors The government of the administrative region adheres to the encouragement of trade and business in Hong Kong. (Speath, 2004) This is shown in the liberties that it provides companies like Café de Coral and its foreign counterparts. Specifically, this is proven by the fact that the first McDonald’s in the region was established several decades earlier. (Watson 1997, 78) However, the business-friendly nature of the laws in Hong Kong does not make it weak. Companies have to similarly comply with the standards provided for by the laws of the land.     2.    Economic Factors Hong Kong is one of the imminent tourist destinations in Asia. People flock the administrative region wither for business, pleasure, or both. Studies have pointed out that travellers from the mainland have increased exponentially in the past couple of years. (Kam-Yee and Kim-Ming, 2006, 217) This means that aside from the tourists and locals of Hong Kong, companies like Café de Coral have to cater to a much larger crowd as massive numbers of mainlanders have added to the overall market of the Hong Kong food industry. 3.    Socio-Cultural Factors In the study of Chan et al, (1999, 12) they described the consumers in Hong Kong with low uncertainty avoidance. This basically means that the buyers’ decision in Hong Kong is primarily based on impulse. Buyers tend to do away with the possibility of planning to buy a particular product or brand before they actually make the purchase. This spells great for companies like Café de Coral since they already have a strong brand name and recall on the consumers. This makes them already a part of the short list of choices of the consumers when it comes to fast food cuisines. Moreover, it has also been noted that the consumers in Hong Kong possess long term orientation. (Chan et al, 1999, 12) This basically establishes the fact that Hong Kong consumers tend to be loyal to a particular brand or company once they have already tried it and are satisfied with the products or services. This reinforces the observation that companies like Café de Coral has strategically placed themselves in the core list of companies which the Hong Kong consumer will constantly visit. 4.    Technological Factors Companies involved in the food service industry have to contend with a complex system of inventory as they deal with stocks that are perishable and ultimately fragile. Fortunately, Hong Kong is one of the hubs of IT in the whole of Asia. (Koo, Lee, Ngan 2003) Most of its workforce is able to easily apply these processes in their operations. (Lee, Leung, Lim, Sia 2004) Infusion of inventory and logistics is highly workable for companies operating in this environment.      B.   Internal Change Drivers Though the standing of Cafe de Coral in Hong Kong appears stable, it is merely the tip of the iceberg. At some point, one must realise that there are several organisations that operate in the same industry that will readily take away the existing market share of the company. Thus, it is important to make sure that the company is aware of its strengths as to whether it would find a fit with the rest of the external environment. The drive towards market ascendancy of Cafe de Coral shall be presented with the help of Ansoff’s product/market matrix. In this manner, the company establishes the areas which could be considered as internal change drivers. (Adamson 2005, 358) The areas on which the company should consider is summarised in Figure 1 below.   Figure 1. Ansoff’s product/market Matrix     1.    Market Penetration The concept of market penetration basically establishes the possibilities on which an organisation could grow with the use of its existing market and products. (Stopper 2004, 21) In the case of Cafe de Coral, its market in Hong Kong shall continue to be stable provided that it holds true on its resolve of improving its signature products, ensure that premium ingredients are used, and the strictest quality control should be observed. 2.    Market Development As pointed out in the earlier part of this paper, Hong Kong is the centre of commerce in Asia. It has low uncertainty avoidance and long term orientation. This intimates that companies like Cafe de Coral should anticipate impulse spending and a more profound sense of brand loyalty. Hence, it is advisable for Cafe de Coral to find ways to seek new markets as they progress as a company to maximise this opportunity. 3.    Product Development With the area of product development, it appears that the company is lagging behind as they tend to display a single set of signature products. However, they maintained in their website that they never stop looking for ways to improve their products and services to ensure customer satisfaction. (Stopper 2004, 21) This shows promise on the part of the company as a prospective insight on the market appears to insinuate positive results. 4.    Diversification On the whole, the corporation on which Café de Coral is under have taken steps to come up with restaurants and other stores that will cater to those aside from the fast-food model in the food industry. There are several brand names controlled by the Café de Coral Corporation that focuses on catering and food production among others. This shows that the diversifications held be the company are still interconnected with every elements in the food industry. C.   Current State Another element that could determine the areas on which change could be induced is the current state of the company. In this paper, McKinsey’s 7s Framework shall present the distinct nuances of Café de Coral. This tool shall establish the possible implications of changes within the organisation. Hence, it will show the best way to tackle a particular strategy proposed to the company. The discussions in this part of the paper shall base its arguments on the website of Café de Coral. 1.    Strategy The company seeks to acquire “A hundred points of excellence.” In order to do this, the company has implemented a customer-centric approach in their operations. Customer satisfaction is held highly by the company. This is ensured by staff training at regular intervals which seeks to improve the individual and team skills of the organisation. However, it is observable that the company have not indicated a stable and veritable feedback system that would house the demands and criticisms of the customers. In doing so, the company may have difficulty in dealing with the demands of the customers as they are not actually aware of these specific elements.   2.    Structure Café de Coral is divided into independent operations of each store. Each store is considered as a team that has to maximise their profits and generate revenue for the corporation. It is responsible for its operational costs, hence, required to find ways to limit their expenses and find ways to attract clients to their respective stores. The store manager is the one that overseas the operations with the help of their staff which includes the administrative sector and those that deal with food preparation and customer assistance (waiters and servers). This thus manifest the decentralised nature of the decision making process in the organisation. Moreover, the organisational structure in every store is apparently flat hence giving the assumption that the communication lines are rather open between management and the other employees. 3.    Systems The company’s primary activities are basically composed of the acquisition of the raw materials that they would use as ingredients for their dishes. Normally these items of inventory are acquired from the main supplier of the corporation. Subsequent activities are manifested in serving and interaction with the customers. Moreover, the maintenance of the equipments used in the operations is also added into these set of activities.       4.    Shared Values The core value of the company, as intimated in the earlier parts of this paper, is the maintenance of a strong customer relationship management within the organisation. The customer is held highly and thus the operations revolve around what these individuals demand from Café de Coral. 5.    Skills The company basically requires both technical and soft skills. This means that each and every unit of the organisation has to take on skills like accounting and use of store equipment such as telephone and computers. In the area of soft skills, given that the main concern of the company is the consumers, involves elements like leadership, initiative, and communication skills. Looking at the reports provided by the organisation, there appears to be minimal gap in the overall workforce of the company. This is because they conduct regular trainings to keep their personnel sharp and deeply acquainted with the shared values within the organisation. 6.    Style The leadership style in every store varies from manager to manager. However, since there is a flat structure in every store, the leadership and management style tend to be highly participative. On the whole, the stores have a healthy competition with each other. Though they do not contend as to the actual market share, these teams contend to gain some “bragging rights” with the other members of the Café de Coral group. 7.    Staff The number staffs of every store of Café de Coral depend on the demands of the consumers and the required business activity in each store. On the whole, the training provided by the company shall place the required skills of new employees and ensure that the seasoned ones are kept informed of the knowledge required in their respective functions. D.   Source of Resistance To determine the sources of resistance in Café de Coral, the transition curve will be employed. The said model is summarised in the figure below. Figure 2. The Transition Curve 1.    Endings This phase of the transition curve, resistance is anticipated from the employees. This is especially true with regards to the seasoned personnel who are used to the traditionally applied processes. In the case of Café de Coral, it is anticipated that if ever there is some anxiety or denial of the change proposal, it would be rather minimal. 2.    Neutral Zone In this zone, the level of uncertainty is high among the personnel. This is especially true to those who hold positions that are contractual. More specifically, they will be in constant fear whether their contracts would be renewed or not. The managers of the respective stores would have to bear this responsibility to mitigate the implications of this state. The management has to keep control over the situation. 3.    New Beginnings In this state, the change is anticipated and accepted by the personnel. In the case of Café de Coral, the personnel may have realised the positive implications of the proposed change by the management. In this part, the proposed change is openly implemented as a part of the normal operations of the organisation. E.   Leadership in the Company As stated in the earlier parts of this paper, the leadership styles and management styles complement the flat organisational framework of the organisation. Basically, participative leadership is seen exercised in the operations of the respective stores. In this regard, the employees are empowered and the managers keep the human resource under his control.   IV.  Prognosis The following discussions will pinpoint the changes required of the operations of Café de Coral. To clearly establish the implications of these changes, two scenarios will me meted out in the process. Based on the discussions above, the company requires synchronisation in the operations of its numerous stores. However, as their independence has contributed much of their success, the management is in a dilemma what to do. Basically, the answer would be to install additional IT technologies that would put correspondence between the different stores and the respective suppliers in real time communication. A.   Status Quo Scenario In this scenario, nothing will change. The operations will be the same however the existence of a gap in between transactions could lead to delay that will essentially establish significant losses for the company.   B.   Change Scenario The implementation and installation of added IT technologies will provide the company added flexibility and opportunity to adjust their operations to actually minimise the losses of the company in instances where any unforeseen events come up. The apparent issue is the added costs in training the appropriate unit of each and every store in the use of the hardware and software applicable in the process. However, as pointed out in the earlier parts, the common Hong Kong worker is adept with the basics of information technology. Hence, this added instruction will not lead to any more wasted resources and time. V.   Conclusion The discussions above have intimated that the proper fit between the internal and external environments is essential to the achievement of the major goals of the organisation. Be it financially or not, it is left on the shoulders of the company to find a way to balance out the situations wherein they are able to remain flexible and keep things under their control.   VI.  References   Adamson, J. (2005) "Using Marketing Visuals for Product Talk in Business English Classes." Business Communication Quarterly. 68(3), 358 Chan, A., Chow, W., Fosh, P., Snape, E., Westwood, R. (1999) Hong Kong Management and Labour: Change and Continuity. Routledge. London. Kam-Yee, L., and Kim-Ming, L. (2006) "Citizenship, Economy and Social Exclusion of Mainland Chinese Immigrants in Hong Kong." Journal of Contemporary Asia. 36(2), 217. Koo, R., Lee, C., Ngan, M. (2003) “Voices and Implementation of Information Technology in an Elementary School Classroom : A Hong Kong Case Study.” Childhood Education. 79(5) 268 Lee, M., Leung, K., Lim, K., Sia, C. (2004) "Is eCommerce Boundary-Less? Effects of Individualism-Collectivism and Uncertainty Avoidance on Internet Shopping." Journal of International Business Studies. 35(6) 545 Speath, A (2004), “Hong Kong's defiance: China warns the city to forget democracy and get back to business. But many Hong Kongers aren't listening.” Time, Available at: http://www.time.com/time/asia/2004/hk_politics/story.html [Accessed 31 July, 2008] Stopper, W. (2004) "Establishing and Maintaining the Trust of Your Employees." Human Resource Planning. 27(2), 21. Watson, J. (1997) Golden Arches East: McDonald's in East Asia. Stanford California: Stanford University.

MANAGEMENT OF CHANGE: THE CAFÉ DE CORAL EXPERIENCE

MANAGEMENT OF CHANGE: THE CAFÉ DE CORAL EXPERIENCE Table of Contents I. Introduction .. 3 II. Background of...

Restaurant Industry Review of Related Literature

Chapter 2 Literature Review How Consumers Choose a Restaurant for Dinner in Visiting Occasions.   <li class="MsoNormal">Introduction </li> The Growth of the Restaurant Industry Eating-out plays an increasing role in the human society everyday. It is not only because of the rush of life today, but also due to its huge profitability in the business world, especially in the restaurant industry. The restaurant industry in the United States represents 47.5% from its total market (NRA, 2006), and this trend is continuously increasing, as shown in Figure 1. National Restaurant Association (NRA, 2007) projected that at the end of this year, the total sales by the restaurant industry in the United States will reach at an approximate amount of US$536.9 billion, which represents 66.5% growth compared from the total sales of the last decade. Likewise, Restaurant and Catering Australia reported that three groups of businesses, including the restaurant, café, and catering businesses had a significant turnover and dramatic growth in 2006. In addition, approximately more than 2,000 new restaurants are operating every year over the last four years (“Restaurant and Catering Industry Association of Australia”, 2007; Hart, 2007), as shown in Figure 2. Figure 1: Restaurant industry sales (Billions of current dollars)                                                Source: 2007 Restaurant Industry Forecast, National Restaurant Association The Need to Understand How Consumers Choose a Restaurant Due to the abundant increase in the restaurant industry, it is vital to research the important aspects that contribute to its success, in order to gain benefit from this opportunity. Restaurant managers must be equipped and ready to develop their restaurant businesses to generate more sales from such a trend. The development goes not only in terms of the restaurant per se, but the preparation must also concern its stakeholders. The government also should be prepared to interact with an enormous culinary tourists who will visit the country, especially in relevance to a country like Australia, which is being well-known as a country that develops individuals who exude culinary expertise (Sparks et al., 2003). Employees need to comprehend a level of consumers’ expectation and practice how to satisfy consumers. In doing so, all stakeholders involved in restaurant development need to understand their customers deeply, in knowing their needs and wants, so as to generate strategies in rendering efficient and effective service. Such needs and wants include the customers’ criteria for choosing a restaurant depending on the occasion, the factors that influence them for selecting restaurants, their decision-making process, and the sources of information they utilize. To sum this all up, knowing how consumers choose a particular restaurant depending on the occasion seems to be suitable question in answering and encompassing all the perceived needs and wants of consumers.   The Interest of Consumers in Visiting Occasions             The criteria of consumers in choosing a restaurant for dinner in visiting occasions intrigued the researcher to pursue with the study, based on two main reasons. Primarily, visiting occasion seems to involve more specific factor like emotion or impression than other occasions. Secondly, the visiting occasion becomes more significant to the Australian society. It has been reported that Australia is a multicultural country, where 24% of its citizens were born overseas (ABS, 2006), and consists of various nationalities, cultures and races. In addition, an abundance of immigrants from many countries can be observed, and with such, the population of Australia is continually increasing. Consequently, there is the perceived increase in chances that the immigrant’s family, relative, friends, and business networks would visit them some time during their stay in Australia. With this, this study is going to explore how consumers choose a restaurant for dinner in three visiting occasions, based on the three classes of visitors, namely, family members, social networks, and business partners.   The Limited Studies on Evaluating Restaurant Choice                            Despite the importance of such an endeavor, there is a limited number of restaurant-choice researches compared with other services such as financial institutes (Lee and Marlowe, 2003, Gerrard and Cunningham, 2001), health insurance (Chakraborty et al., 1994), and education (Montmarquette et al., 2002). Particularly, decision-making research in services industry is also discussed less than products’ decision-making research (Ettenson and Turner, 1997). As mentioned in the study of Ettenson and Turner (1997), “Considerably less is known about how consumers evaluate and select non-professional services: e.g. dry cleaners, auto repair, hair care, restaurants (Hill and Motes, 1995, Turley and LeBlanc, 1993)”.     <li class="MsoNormal"> Consumer-Decision-Making Process</li> Decision making (DM) happens when consumers choose one option from others (Schiffman et al., 2005). Due to globalization, consumers are overwhelmed with so many options, alternatives and varieties in the modern society, such that they forced to make decisions between or among choices at all times (Lee and Marlowe, 2002, Gerrard and Cunningham, 2001, Lee and Marlowe, 2003). The idea of decision making can be seen using four dimensions, including the economic model, passive model, cognitive model, and emotional model (Schiffman et al., 2005). Economic model assumes that consumers are “rational” decision-makers, who could maximize their evaluative-process of every choice they have. However, this model cannot be applied to all types of consumers because in reality, due to insufficient resources, time, and ability, consumers lack the ability to compare each choice fairly. Hence, this model sounds too naïve. The second model is the passive model, which is the opposite of the previous model; such that this model emphasizes that consumers seem to be passive. Consumers of this model are easy to convince and predict. Nevertheless, consumer behavior from this perspective is much more complicated than expected. The third and most reasonable model seems to be Cognitive model, which presumes that consumers device a pattern in solving their problems. Consumers consider choices rationally with their limitation such as ability, perception, and information collection. Fourth and last model is the emotional model, which states that the decision-making of consumers involves emotion. In using an economic view, the use of this model might not be as reasonable and logical in terms of making decisions, for consumers rely on feelings and emotions in order to make their decisions.      From this, it can be perceived that the decision making process can be classified as one that ranges from a simple process to a complex one, and is usually associated with high risks. The question that leads to the determination of the interest of researchers and practitioners will be used to gain better understanding about the factors to consider in making a sound consumer-decision-making process. The importance of such an understanding translates into better chance to capture and therefore eventually, in dominating a market. Therefore, the studies of decision-making process are gaining momentum over the last few decades. Turney and LeBlanc (1993, p.xx) stated that  “Literature review in the restaurant marketing reveal relatively few studies that focus on how customers go through decision- making process in comparison to other industries.”   Professor Blackwell, Miniard, and Engel (2001) proposed the model of Consumer Decision Making Process (CDP) in their book entitled, “Consumer Behavior (9th ed.)”. The CDP model simply reflects how consumers make a choice for both goods and services. Seven stages are combined to be the CDP model. “Need Recognition” is the first signal that implies consumers’ need or want. After the need recognition, consumers tend to gather as much information as they can in order to evaluate their choices before making a decision, as indicated in the second and third stages. At the fourth stage, purchasing is made, depending on the preference or choice made. However, this model does not end at this stage because the next three stages also affect the decision-making process of an individual. When consumers use the products or services they have purchased, the value of their purchased commodity becomes dependent on their experience in using them, which becomes essential at the fifth stage. “Post-Consumption Evaluation” then plays role in a cognitive process in the decision-making process of consumers, in reminding them of the value of the commodity on their next purchase. The last stage, Divestment, also participates in such a cognitive process, and indicates how well of the performance of the product or service is good of disposing.   However, using only the CDP model itself could not generate much contribution when applied into marketing practices. Blackwell (2001) also mentioned about various factors that influence each stages in CDP model, as shown in Figure 4. The marketers or researchers, who understand the CDP model and the influential factors might predict consumers’ decision, and persuade consumers to purchase or at least comprehend the reason of their selection. In the first stage, consumers would like to fulfill their needs for solving a problem. Their memories, environment, and their individual differences influence their needs. When they are faced with the same problem that occurred before, they would instantly know how to solve that problem. This drives or forces them to purchase a product, which they know have assisted them and have provided solutions to their problems. In relation to this is the fact that the influence of the environment and individual differences are bases for product purchasing, such that their decisions will be based on important factors, such as culture, social class, personal influences, family, and situation. The influences on individual differences include consumer resources, motivation, knowledge, attitudes, and personality.   Searching and gathering information is the next progress after the need for a product or service is identified. Two sources of information can be used, namely, internal and external sources. An internal source includes the memory or experience of a consumer, while external information or sources may include the information shared by family, friends, colleagues, and the media. These external sources could be grouped into two, which include the marketer and the non-marketer external sources. Marketer external sources provide persuasive information that comes from advertising, salespersons, and promotion, which can be used in order to gain benefit for the company. On the other hand, consumers seem to pay more attention to the other external source, the non-marketer external source. An example of such a source includes the recommendations from family, friends, colleagues or even from the media, such as consumer reports.  Besides, Blackwell (2001) included the information processing, which compose of exposure, attention, comprehension, acceptance, and retention in this type of external source as well.   After data collection and gathering, consumers evaluate them for the purpose of selection. At this stage, consumers compare and contrast between products or services to make their decision. Nonetheless, the criterion that every consumer bases their decision upon varies, and termed as the evaluative criteria. Blackwell (2001) emphasized that the effect of the environment and individual differences influence this information at the evaluative stage. “Salient attributes” are the most important attributes when making a sound choice. However, most product or service providers attempt not to make this kind of attributes so much different. Hence, consumers are forced to rely on “Determinant attributes” which is less important attribute than salient attributes, in order to make easier decisions.     In the event that customers are already decided, they are still faced with two issues, mainly, the location in purchasing the product or service, and the exact product or service to purchase. In this aspect, the roles of salespersons, product displays, media becomes very influential. Even though consumers have a strong intention of buying a particular brand at a particular store or location, their decisions may change at this stage. For example, one customer intends to purchase a specific Brand A, but during the actual purchase, the customer makes a discussion with a salesperson and finds out that a particular Brand B is better or much more interesting. Eventually, the customer may decide to purchase Brand B over Brand A.   In relation to this is the discussion of the last three stages of the decision-making process, namely, consumption, post-evaluation, and divestment, and serves to be the conclusion for the literature review. Consumption of the product directly affects the post-evaluation stage, such that positive or negative effects are not dependent on the product itself, but the way customers utilize or maintain the product. In some instances, emotion plays a part in the post-evaluation stage as well, as customers use their feelings and emotions in evaluating the products’ perceived usefulness. Positive effect results to satisfaction, which reflects repurchase behavior. On the other hand, dissatisfaction produces negative effects, which are retained in the memory of customers, and reconsidered for the next purchase. However, in this stage, “cognitive dissonance” or the feeling of uncertainty of customers regarding a product they have purchased may occur, particularly in the matter of pricing, quality must be compensated. The last stage of CDP model is divestment, which consist of outright disposal, recycling, or remarketing. The customers still have to make their decisions for this stage and that decisions affect their repurchase behavior in some ways. For example, when purchasing a car, people could think about selling it after few years of usage, so instead of spending large amounts with new cars, they prefer secondhand cars to the new one.        <li class="MsoNormal">Consumers Behavior in Restaurant Industry</li> The interest in the study regarding the factors that influence restaurant-choice has been developed in recent decades. In 1962, Becknell and Maher identified the main criteria to select a food retailer, which include food quality, cleanliness, pricing, service, and unique features. Miller and Ginter (1979) also mentioned fast-food criteria that influence choice, such speed of service, variety of menu, popularity with children, cleanliness, convenience, taste of food, and price. However, these two studies do not assist marketers in understanding the factors on how consumers choose a restaurant. Restaurants-choice research was started to support the study of Lewis (1981) regarding restaurant advertising. In addition, Lewis (1981) concluded that the aspect of food is the most important factor for restaurant choice, which was also confirmed by Auty (1992) and Kevila (1997). Yet, Lewis (1981) still mentioned that when consumers made the restaurant choice, they seemed to process “the bundle” of factors or “total-benefit” factors instead considering the single criteria(Alpert, 1971, Lewis, 1981).   The role of dinner’s occasions was revealed by June and Smith (1987), where the ranking of restaurant’s feature are not stable, but varied depending on occasions. In this study, five features were given consideration, including the price, service, atmosphere, liquor license, and quality of food in four occasions, namely family occasions, intimate occasions, celebrations, and business lunches. Liquor license was the most important factor for intimate occasions, and celebration dinner, but for business lunches and family dinners, liquor license ranked third. In support of this study is the study done by Auty (1992), Sweeney (1992), and Koo (1999), which supported the role of occasions in choosing a restaurant. Auty (1992) stated the restaurant choice model, and identified the important attributes influencing restaurant choices in the United Kingdom. The study emphasized that food aspect was the most important criteria in choosing a restaurant (Kivela, 1997, Lewis, 1981, Auty, 1992). Likewise, Kivela (1997) studied restaurant segmentation in Hong Kong, and confirmed that food aspect was the most important factor for Hong Kong’s consumers as well. Both Kivela (1997) and Auty (1992) agreed that in Hong Kong and in the United Kingdom, age and income influences the segmentation of the market. Age and income factors have something in common which reflected certain content (Auty, 1992, Kivela, 1997). For example, young people in school age have a limit in their income, so are not the type of individuals who would dine at expensive restaurants. In relation to this is the study done by Tucci (1997) who examined whether or not service-guarantee policy affected decision-making in restaurant choice, and found out the unexpected result, stating that service guarantee did not have any effect on restaurant choice.     Not all studies agreed with such results mentioned. One of these studies is done by Sweeney (1992) who found that reputation, and employees’ manner were the key factors in selecting a restaurant. In addition, price had positive and negative roles in restaurant selection. The researcher further summarized that consumers seem to focus from personal sources of information such as experience, and word-of-mouth more than non-personal sources such as location, advertising, price, and physical facilities. Nevertheless, Pedraja (2001) argued that external information including advertising and information provided at the premise were drawing more attention from consumers. With this, it can be understood that advertising becomes a vital tool in making decisions, whereas interpersonal source was employed less in the high-income family (Pedraja and Yague, 2001).  Similarly, Koo (1999) agreed that advertising played more important role as a source of information in decision-making for choosing a restaurant.   Moreover, Turney and LeBlance (1993) represented the three aspects of decision making in services. First is the small size of evoked set, which consisted of only 1-2 service-providers. Next, consumers evaluated each provider with only three attributes. Lastly, consumers perceived risk of purchase in quality and financial matters respectively. None of them perceived time and self-image risk. In addition, Turney and LeBlance (1993) pointed out that in consumers’ decision-making process, they seem to decrease service providers as small number as they can. Therefore, they could consider seriously only two providers. (Pedraja and Yague, 2001)Pedraja and Yague (2001) suggested that external information would be utilized increasingly for choosing a restaurant for consumers. Advertising and the information at the premises were mainly such external information.   The subject of the current study is identifying the factors in choosing restaurants for dinner in a specific context, such as welcoming visitor or guest on personal occasions. The unique characteristic of this study is that while choice modelling and consumer decision-making process are predominantly investigated as a cognitive process, choosing a restaurant and providing treat to visitor involves strong emotional component which make impact upon this process.   One of the limitations of most studies regarding the restaurant field is due to the small number of respondents (Lewis, 1981, June and Smith, 1987, Auty, 1992, Sweeney et al., 1992, Koo et al., 1999) participating in the study. The second weakness or limitation of such studies includes the unrealistic picture in the decision-making process of consumers regarding their choice of restaurants because of an out-of-date method of data collection. Third and last limitation is the fact that researchers only utilize the cognitive effects of the decision-making process, which reflect the decision of only one side of the coin.

Restaurant Industry Review of Related Literature

Chapter 2 Literature Review How Consumers Choose a Restaurant for Dinner in Visiting Occasions. Introduction The Growth o...

The Current Economy and It's Impact On Restaurant Industry

The Current Economy and Its Impact On Restaurant Industry. The restaurant business is not a stable industry. From external factors like snowstorms to some internal factors like just one piece of broken equipment can affect the amount of business you do on any given day. These are just some of the many restaurant problems many managers face. According to  twenty-five percent of restaurant operators said the economy is the number-one challenge facing their business, followed by food costs (22%), building-and-maintaining sales volume (16%) and recruiting-and-retaining employees (14%). restaurant is a franchise restaurant and has four chain stores one in  and  The owner and manager of the ,  has identified a few issues that restaurant is currently faced with. To investigate the issues to become Mission Statement, the restaurant promise is "Using only the finest quality ingredients to create classical and contemporary Indian cuisine with traditional methods. Through primary research and an interview with owner,  the following problems were identified. That the restaurant was not performing as  what is expected to proper hiring and training new employees. Advertising is of poor quality hence there is connection to maintain the loyalty of the employees.   The poor advertising factor is also related to the need to make an interactive website, because the current website of the company is old hence giving an impression that the company is not progressive. To provide some solution to the problem the manager has conducted a study. The SWOT analysis has identified the businesses strengths, weaknesses. Strengths and weaknesses are those what happen internally within the restaurant. Some of the strengths are attributed to the front house service of the company.  The weaknesses are those that the restaurant still follows a traditional and old fashioned in catering services to the consumers. On the other hand, opportunities and threat are those linked to external matters that have an impact to the organization. It was found out that the opportunity is the capacity of restaurants to adapt to the dictates of the restaurant industry. The threats is the losing the position in the business industry because of the emergence of newly and modern restaurants. The hospitality industry demands special skills and qualities of its people, particularly in the area of catering services to the consumers. The restaurant must be able to incorporate the necessity of improve training and staff performance. Training must include intense motivation and the ability to make the employees to know the importance of the job and to work as a team. In addition,  the business must be well managed in order to create a sense of commitment and team spirit. Training gives managers a greater overall confidence and a better positive outlook. Profit Chain in which well-trained and engaged employees deliver outstanding service.  Furthermore, the ways to increase customer is also vital because it could also be the way to see how customers are satisfied with the services prepared.   This can be achieved thru advertising primarily in the offer excellent friendly customer services.  messages in advertising: Quality,  Freshness, Affordable, Variety, Value. It is also necessary for the company to venture into another set or type of foods in order to give customers several choices because of variation. Customers enjoy the experience, become loyal customers, and positively recommend the restaurant to others, sales increase, profits increase.  Information was gathered through research from the that publishes a monthly Restaurant Performance Index, which measures the health and outlook of the industry. Customer reviews from website: Interviews were conducted with owner, chef, and waiters of In terms of confidentially, this document contains confidential information and it is proprietary to  It is supplied subject to conditions, that it shall not, by way of trade or otherwise, be reproduced, resold, or otherwise circulated without prior written consent of the restaurant. The author will see to it that the information gathered will only be used for academic purpose. It is the plan of the author that will be used in order to give the study a concrete and specific details. will help author to have the best basis for drawing a conclusion and recommendations. Furthermore, the author will also apply the SWOT Analysis, however, this analysis will be used in determining the strategy of the restaurant in dealing with problems and inevitable circumstance.

The Current Economy and It's Impact On Restaurant Industry

The Current Economy and Its Impact On Restaurant Industry. The restaurant business is not a stable industry. From external factors like...

The Coyote Loco Revenue Management

The Coyote Loco Revenue Management Introduction             There are many ways for the relaxation and for us to unwind. There are also many places that we can visit for us to spend and ease the stress and the circumstance in our life. Aside from that, there are also certain corporate meetings and business transactions that are doing inside outside the offices. Travelling and eating also are the best way for the family, friends, and for the any companion to have a quality time for them to bond. Trips then are also being done my most of the travel enthusiast, for the business trips and for the any personal needs. There are only few places that these incidents are taking place, including in these places are the hotels, the airplane and the restaurant. In this manner, there are many common services that these places are offering. However, there are many differences on their service offers as well. There are circumstances also whereas the services of the hotels, in the restaurant and in airplanes that follows some strategies in order for them to gain profit.      The Key Differences             There are many differences in services and facilities that the hotels, the airplane, and the restaurant are offering. One of their differences is the amenities that the places are using. Parts of the amenities that can find in the hotel are the swimming pool, the bedroom services, and some of the recreational facilities as the gymnasium and the sauna facilities. Aside from that, the foods that they offered also differ as the airplane prepared the foods before the flight while the restaurant and the hotel are preparing the food upon the order of the customers. There can be privacy as well in going to the hotel and using the things privately as the television, the toilets and the others stuffs. Aside from that, these are also open 24 hours.  Some of the hotels as well are offering fitness center for the workout schedule. The front desk and the lobby services are also the edge of hotel over the other relaxing places for its convenience and information (Pizam, 2005).             The services of the airline are classified as the intracontinental, intercontinental, and or the domestic. Including in the services of the airlines are the evaluation of the route, the planning of the flight, the permits on the over flight and to the landing, the check in agents and the supervisory ground handling, the VIP escorts and welfare. There are also offers on the discounted of the passenger tax. The airline services also are providing group fares and free tickets as their promos. It has also giving upgrades and luggage tags. Aside from that its services also consists of the lounge privileges and preboarding privileges. The airplane is then the major thing that had been used for the transportation and for the travel whether in the family, personal and business trip. Additionally, the airplane offers to its customers a world class services as the transfers of the tariffs in the different part of the world (Boehme, 1999).             The restaurant also plays an important role for the life of every person. This is not only the place for eating but it is a place as well for relaxation and for accompanying the other people. The services of the restaurant which are commonly differs in the other places are the foods which are being serve and the theme of each and every corner of the restaurant. Aside from that, it has also the nutritionist for the maintenance on the health on the food that had been eaten by the customer. Some of the restaurants as well are offering view of the nature and others are offering the oriental and other themes that would enjoy by the consumers. The services of the personnel them are the world class which are commonly desired by the consumers. It also offers low service charge with the whole and proper equipments. The meal duration as well in the field of the restaurants is seemingly longer than those of the other places.   The Important Characteristics of the Coyote Loco Restaurant             There are certain characteristics that are more important in the production and in the business application of the Coyote Loco restaurant. Part of the characteristics is the duration control of the meal or the meal duration. This is important so that it can reduce the diming times most especially in the peak periods. This can also generate significant increase in the revenue for the restaurant. To manage this kind of duration will be a little bit complicated. This is due to the explicit unit of sales is basically focus on the meal or the event and not to the time. But it is debatable that the time is the right measure of the product of the restaurant. In this manner, the Coyote Loco Restaurant managers should not only to think in reducing the diners’ average length of meal rather it is the variability in the length of the meals. This is then important for the restaurant to minimize its cost and maximize its profit. As the data had been seen, the meal duration time is quite long and need to have a little bit improvement.                  The course timing as well is an issue that the restaurant needs to face in order to generate better revenue. This is important because it will understand the meal timing and the possible delays that might happen. This includes the number of the guests, the time whereas the guests where seated as well as they where greeted. The time deliveries of the foods until the time the guest are left. In this manner the average meal time which is form the arrival up to the departure is about an hour and 12 minutes while having a standard deviation of 25 minutes. This time of the meal is only right but looking further, the standard deviation is somewhat alarming.             This are the characteristics that the restaurant need to give emphasis because of the reason that it can give much effect on the maximization on the restaurant’s revenue.     Revenue Management for the Coyote Loco Restaurant             The variability of the time which is its length is the restaurant’s major problems encountered. However, the meal time can reduce and is not easily done, that is why it is important to reduce first the meal time of the standard deviation. In this manner, reducing the standard deviation simply shows reducing the average meal time. Consequently, the high standard deviation had made cause of the many factors including the equipments, the methods, the products, and the personnel. In addition, majority of the issues are the procedural issues which involved the personnel and the time of the dining.      The Problems on Personnel In the personnel problems, the training and the variability of the level skill should be done. The staff may have the training for the service which and to the new employees so that there will be a consistent serving time and employees. There will be an operation development by then.      The Standard Operating Procedure Development In developing the standard operating procedure, greetings should be done by the host as the customers enters the restaurant and he is also responsible for taking out the orders so that there is a minimization in the waiting time. There should be a constant 5 minute delivery of the appetizer. In the delivery of the entrée it should be 12 minutes and right after the clearing of the appetizer it should be 5-7 minutes. Regarding the course timing, there should be a clearing of the appetizer first. The server should always remove the unwanted dishes came from the table and must always bring something when he went back in the kitchen. In the payment of the consumer, the server must bring the receipt in the table in just two minutes. The clearing of the table can be done by the server one minute after the customer had gone.      Availability of the Table The Alexander’s should then be improve their ability in tracking and predict the availability of the table that will be use by the nest set of customers. This can be done with the aide of the communication improvement of the host and the servers wherein the manual tracking system can be helpful in the betterment of the table management.      Demand Periods Knowing the demand of the periods on the hot and cold meals, the developments of the strategies can then a huge help in the revenue increase of the restaurant. The specific suggestion for the good tactics is the cold periods and not thinking of the undesirable on the hot periods. In relation to this, the managers must have huge ideas when and how they enter in the hot or cold period so that employees are alert in the given situation. Furthermore, the managers can repeat the same thing on the concentration to the average check which are being raised at the hot meals while the managers is focus on the table returns and its development for the optimization of servings.      The Customers and Staff’s Impact             In the identification of the strategies in the revenue management there are many proposals that came out as the use of the suggestive selling, the acceptance of the reservations, the multiple duties on the side of the host, widening of the menu variety, the increase of the prices, availability on the promotions, and the chips and the salsa serving. To follow these suggested techniques can have definitely have an impact on the staffs, on the managers, on the customers and on the business.             The selling of the desserts and the appetizer which are being suggested are the hints for increasing the check but it can also allows for reducing the RevPASH especially on the hot periods. It is also helpful in the low times of RevPASH but it is not advisable to use on the peak of the demand.             The reservations can be dangerous to the business especially when the people came up late or they do not even go onto the reservations. In line with this, the suggestion for the Coyote Loco is that it will going to accept the reservations for the six or more persons only in the times of the high demands. On the other times, there should be a guarantee for the reservation for asking the credit card or informing that the table can be use 10 minutes right after the reservation time.             Hiring the additional person in handling for the subordinate task of the host during the high demand is also one of the revenue management strategies. In this regard, the dedicated host is responsible greeting in the arrival; it is also responsible in giving the necessary and accurate time and writing on the waiting list of the incoming customers. This is due to declination or the refusal of the consumer when they did not see someone upon their arrival. The host is also the one doing the flow of the table, notification of the seats where there is an available, and finding the party. He does also other jobs during the cold times to avoid waste of time.               The creation of the efficient menu is also one of the strategies that are advisable in the restaurant. In the hot times, it is enough to reduce the size if the menu so that the time of the preparation in ordering can also reduce added to the focus on the items of the high contribution margin. In the cold times of the restaurant it is then advisable to offers special meals of promotions to attempt the demand of the business.             The increase on the prices during the peak time will also add numerous revenues in the restaurant. At the menu on the special weekend, it can be prepared in connection to the efficient menu which is offered having higher prices with even a little bit. On the contrary, on the weekdays, it can be effective to discount the other prices in order to increase the business. This special meals and promotions cam definitely add premiums in the business.             The use of the discounts coupons on the peak times of the restaurant can be useful as well as being applicable on the peak hours. The program of the frequent dining can also offered in order to encourage customers on the times of the off-peak. The customer can receive extra credit on the hot period as they went into dine in the cold period but only for one meal credit if they dine in the hot times. The redemption of the free meals is only at the time of the cold times.             The salsa and the chips as practice by the restaurant are already at the table. But, it should be serve them also at the hot times. In reverse, the chips and the salsa can only be serving upon request or after taking the request in the cold times. Dining time: The mean and (standard deviation are all in minutes) 5:00 PM     6:00 PM     7:00 PM     8:00 PM     9:00 PM Sunday    1:05 (0:20) 1:05 (0:16) 1:02 (0:13) 0:51 (0:14) 0:47 (0:13) Monday    1:00 (0:26) 1:02 (0:22) 1:05 (0:26) 1:00 (0:27) 0:54 (0:20) Tuesday   1:12 (0:36) 1:10 (0:35) 1:19 (0:35) 1:00 (0:28) 0:54 (0:25) Wednesday 1:03 (0:26) 1:02 (0:23) 1:02 (0:23) 1:00 (0:20) 0:52 (0:15) Thursday  1:09 (0:25) 1:23 (0:15) 1:03 (0:24) 1:05 (0:25) 1:14 (0:25) Friday    1:20 (0:24) 1:21 (0:17) 1:16 (0:24) 1:03 (0:24) 0:52 (0:22) Saturday  1:02 (0:31) 1:07 (0:27) 1:05 (0:23) 1:01 (0:22) 0:46 (0:17)                         This revenue yield management can definitely have a financial impact in the restaurant as maximizing the revenue. Though, certain employees and customers might react, these can ease upon giving them the same quality of foods and services. The Service Blueprint of the Coyote Loco   The service Blueprint of the Coyote Loco Arrival Policy on the Reservation Greet There is no Host   Waiting   Failure to follow   Management in waiting Seat Managing table   There is no Host   Looking for party   Unavailability of the tables   No greetings on the server Order Confusion to the Customer   Not attentive server   The server is untrained   Strategically Selling   The order is wrong Appetizer The delivery is late   The order is wrong   The timing is poor   Strategically Selling   Clearing   Bussing beforehand Entrée The delivery is late   The order is wrong   The timing is poor   Strategically Selling   Clearing   Bussing beforehand Dessert The delivery is late   The order is wrong   The timing is poor   Strategically Selling   Clearing Payment The delivery is slow   The server is not attentive   There is a slow pick up   Bussing beforehand Departure The delay of leaving of the guests   There is no Farewell   Bussing     In the greeting customer, the customer has the probability of leaving the restaurant upon their entering if they do not see any host on it. In the case of the waiting space of the Coyote Loco, it is somehow inevitable that it may happen. Besides, there are almost 20 customers who walked out every night on the peak evenings. Additionally, there is an inaccuracy on the way of communication between the host and the customers about the waiting time which can lead to customer’s frustrations. The arrival of the customer and its patterns will relate those of the arrival predictability. This is due to the reason that reservation by the customer has no possibility of showing up. The seating of the customer is one of the most important also in the restaurant management. As soon as the table is ready, the host will have to notified and look for the next party who are waiting. The case of table readiness but not notified to the host should be avoided. Moreover, when the host had been notified but the party had not yet been found. At the greeting of the server, the server should greet the party and then offer them drinks orders. The greeting of the server can be slow to the customer thought remained waiting due to the fact that the server is inattentive, unaware, and the left busy in the new party. In the delivery of the drink, it is important that the servers should walk up in the stairs in order to pick up the drinks orders. On the peak nights, the servers had facing troubles in the navigation of the customer at the bar because the area is full. In this time as well, the bartender is busy and there can be delayed. Once that there is back-up in to the bartender, then the server can now leave so that it can do the other duties. This is then the time that the drinks may be delayed as picked up by the server that can lead in the annoyance of the customers as well as it can be hazardous in the sales of the bar. The order of the customer should be taking as the server delivered the drinks. The unfamiliar name of the menu item and the size of the menu are often cause to delay the process of ordering due to the server is trying to explain all of the choices. The more delays can be experience if ever the server is not yet familiar in the items of the menu that are being prepared. Regarding these, the suggestive selling can be used but not appropriate at the hot times. The delivery of the entrée and appetizer can face many problems due to the reason that not all customers wants and ordered that these. Besides, the table has the very good supply of the salsa and chips. Including in the problem of the delivery is the poor and long timing on the delivery of the entrée and the appetizer. Additionally, the wrong order can deliver by the food runners and the server cannot recognize the completion of the customer’s entrees and appetizers and can also lead to the failure of the timely fashion dishes.             The order of the coffee and dessert shall be offer as the entrée had been cleared. This is also common problem as in the appetizer and in entrée wherein some of the customers chose to wait that eating the dessert or drinking coffee. This is not a hindrance on the cold times but still it is preventive during the busy times as the restaurant will turn the table.              The payment is done as the customer’s requests for the check. The forecasted problems in the payment is the server to be slow in the delivery and in the preparation of the check, the slowness of the customer as he arrange his payment, the inability of the customer to tell the server, and the delay of the server in the payment process.             The customer’s departure had done upon its payment. Majority of the customers leave the table but many of them choose to linger for awhile. This scenario is acceptable during the slow time but it can be hazardous when there are many customers who are waiting and looking for the available table. If the customer does not leave, then the host has the probability of forget a farewell offer to the guest. In addition, the busser and server may not recognize he readiness of the table for the resetting and bussing.             In this regard, all of the steps and all of the process are all necessary in managing the restaurant. This will also be the key points that the managers should be done on order maximize its profit and to minimize its cost. This can also lead to the ample products of food and services.   Bibliography Boehme, A 1999, Planning Successful Meetings and Events, AMACOM Div American Mgnt. Assn. Brophy, J and Alleman J 2005, Children’s Thinking about Cultural Universals, Routledge Pizam, A. 2005, International Encyclopedia of Hospitality Management, Butterworth-Heinemann How Long Should Dinner Take? Measuring Expected Meal Duration for Restaurant Revenue Management, Cornell University, viewed 06 February, 2008 http://www.asiarooms.com/malaysia/langkawi/grand_continental-hotel.html Grand Continental Hotel Langkawi 2000, Airline Services Incorporated, viewed 06 February, 2008 http://www.e2000air.com/

The Coyote Loco Revenue Management

The Coyote Loco Revenue Management Introduction There are many ways for the relaxation and for us to unwind. T...