Problems and Solutions for the Chinese Restaurants around State College - Essay Example

? Formal Analytical Report here The Pennsylvania Letter of Transmittal Your address here August 04, General Managers Chinese restaurants State College Pennsylvania Dear Managers, Enclosed is the report that you requested entitled “Problems and Solutions for the Chinese Restaurants around State College.” You will find that this report contains an introduction to the Chinese restaurant industry’s problem, some effective solutions, as well as conclusion and recommendation based on the discussion. Multiple methods of research were used to design this report. Skype interviews were conducted with the general managers of the Chinese restaurants. Students of State College were also contacted to know their precious viewpoints about the dining experiences. The appropriate solution should be one that seems feasible, easy to implement, and should have long-term effects on the industry. After benchmarking the two possible solutions against the criteria previously mentioned, I recommend improving the dining experience by improving the customer service and general environment of the restaurants. This solution will attract more customers to the Chinese restaurants making the Chinese restaurant industry one of the most profitable hospitality industries of the United States. I hope you find this report helpful in regards to solving the problems of the Chinese restaurant industry of the United States. If you have any questions or comments regarding my recommendations, please feel free to contact me at email address or telephone number. Thank you for providing me with the opportunity to research this problem. Sincerely, Your name here PROBLEMS AND SOLUTIONS FOR THE CHINESE RESTAURANTS AROUND STATE COLLEGE     Prepared for: General Managers      Prepared by: Please write your name The Pennsylvania State University       August 03, 2013 Executive Summary Chinese restaurants around the State College are experiencing a major drop in their sales due to increase in competition. The main problem is that customers are particularly not happy with their service standards and the environment of the Chinese restaurants. This is adversely affecting the level of sales of the restaurants that forces them to target only Chinese clientele, which is a very small target market for the restaurants. A few dimensions of the problem are given below Increasing competition Disgruntle customers due to lack of good customers service and environment Focus on only Chinese student market which is small The criteria for the best solution included solving the above mentioned problems in a cost effective manner, as well as within a plausible timeframe. Two solutions to the problem were proposed in the report. The first solution was to improve the dining experience and customer service in order to attract customers. This included changing the interior, as well as the environment of the restaurant. The second solution was to enhance marketing channels of the restaurants using social media and word of mouth marketing. This solution was aimed at improving customer perception regarding Chinese restaurants around the State College. The solution that best fits the criteria is to improve the environment because it involves bringing operational level changes that can create a difference. The solution is also both cost effective and plausible. Table of Contents Executive Summary 4 Introduction 6 Proposed Solutions to the Problem 7 Improve the Level of Customer Satisfaction 7 Enhancing Marketing Efforts 8 Conclusions and Recommendations 10 References 11 Appendix II………………………………………………………………..……….…...13 Introduction The restaurant industry of the United States of America has become extremely competitive because of the entry of many new players. The diversity of customer market in the US restaurant industry is significant and this is why many types of restaurants are in business offering different types of cuisine. Chinese cuisine is also highly sought after in the country. Chinese restaurant market is also competitive because of the popularity of Chinese cuisine in the country. Chinese restaurants are in every corner of the country targeting both Chinese immigrants and local consumers with different variety of food and environment. The main problem discussed in the paper is regarding Chinese restaurants around State College. These restaurants are not able to attract a large number of customers and are mainly targeting Chinese students who are living and studying in the surrounding areas. Another problem is that the restaurants are not providing an excellent eating environment for its customers. Many people complain that the eating environment and customer service standards are not very high. However, the main issue is that the Chinese target market around the area of State College is relatively small and, therefore, restaurant owners will have to resolve the key issues in order to expand their market by attracting both Chinese and non-Chinese customers. In today’s world of competition where achieving the competitive advantage is the dream and mission of almost every company belonging to any particular industry, Chinese restaurants are not able to attract new customers and their customer base is shrinking. This has led to an increase in the competition between Chinese restaurants around State College and almost all restaurants are targeting Chinese students of the area. They are using different marketing modes to increase their customer base, such as, offering lower prices and discounts to attract students. Despite of all of these efforts, the profit margins are getting skimmer everyday because of the increase in competition. Customers are still not attracted to the Chinese restaurants in the area as they are more interested in going out to places that are new and happening. Moreover, many customers have serious reservations regarding the eating environment of Chinese restaurants and service issues. Also, Chinese restaurant owners are not using marketing channels effectively to dispel this wide spread reputational problem. An appropriate solution to the problem will cater to the demands of customers and will improve the reputation of Chinese cuisine and restaurants around State College without raising the cost of the business significantly. The solution should also include strategic changes so as to direct restaurant owners in the right direction. A good solution will also cater to the increasing competition in the restaurant industry by improving service standards and making them well suited to the demands of consumers. Lastly, a satisfactory solution will have to be plausible that must show results in the shorter run. Proposed Solutions to the Problem There are two main solutions to the problem being faced by the Chinese restaurants around the State College. The first solution is to increase the level of customer satisfaction for the people visiting Chinese restaurants by improving the general atmosphere and environment of the restaurants. Second solution is to enhance marketing channels for restaurants in order to attract new customers. These solutions will allow the restaurant owners to increase their customer base and do away with the negative perception regarding Chinese restaurants. Improve the Level of Customer Satisfaction Making efforts to make the dining experience enjoyable for the customers is one of the most effective ways to bring business back for restaurant owners around State College. This can be done by improving the general environment and ambience of the restaurants. An improved customer service is one of the keys to retain customers. The customer service staff should be very polite, well mannered, and efficient. Similarly, the restaurants should focus on the needs and demands of the customers, which may include allocating some play area in the restaurants for children, offering high quality meal, and improving the ambience of the restaurants. Customers want to enjoy a unique eating experience and Chinese restaurants can provide just that. These restaurants should capitalize on their difference from normal cuisine and should give customers a chance to enjoy something different. Not all people living around the State College are aware of Chinese restaurants. They rely on the information they get from other people. This is why it is essential to change the environment of the restaurant in order to provide a unique eating experience to customers. Customers are mainly looking for something different when they go out to a restaurant (See Figure 1). Food is always not a priority for everyone as many like to test something new every time. This is why the focus should be on environmental elements and customer service in order to attract customers. The environment of the restaurant should be made extremely traditional and customers should feel that they are eating out in China. This will help the restaurant owners increase the awareness level of customers regarding Chinese cuisine in general and will also help revive business. Figure 1: Percentage of Customers’ Preference in Restaurants Today, Chinese restaurants more or less look like American restaurants and there is no distinction. The whole idea behind the above-mentioned solution is to celebrate the difference of Chinese cuisine and eating experience from the traditional American restaurants. Customers will come to Chinese restaurants around State College if they feel that they are going to experience something different and new. This is why this solution is expected to solve the problem of decreasing number of customers for Chinese restaurants around State College. A peaceful and enjoyable eating environment is also essential in the restaurant industry because the whole reason why customers go out to eat is to get out of their monotonous routine. This is an opportunity for Chinese restaurants, as they should offer something new and different for the consumers so that they can attract them. Small things can employee uniform to menu should be designed differently in order to give customers a Chinese experience while eating out. Restaurant owners should also try to target customers that are not of Chinese origin. The reason is that the original Chinese population in the area is very limited because of which it is not possible for the restaurants to earn a good amount of profits by just targeting the Chinese. This particular solution will allow restaurant owners to change their target market to increase the business all around the United States. They should target everyone else because of their unique selling proposition. They are offering something new to the consumers and therefore their focus should be on non-Chinese market. By focusing on the eating environment, restaurants can increase awareness level of Chinese cuisine among non-Chinese people around State College. Change of target market can do wonders for the restaurant business. Another supporting point for this solution is that they are both plausible and inexpensive. Changing eating environment will cost restaurant owners but there will be no increase in variable costs of doing business. Also this solution is plausible because restaurant owners will not have to make any significant changes. This is why this particular solution is not very difficult to implement. Enhancing Marketing Efforts Another good solution will be to improve the marketing efforts of Chinese restaurants. This will also help in solving the problem because marketing will increase the customer base of the Chinese restaurants around State College. Enhancing marketing channels will also help in improving bad reputation of the Chinese restaurants. Many people think that the service standards of Chinese restaurants are not very good. By enhancing the marketing efforts, Chinese restaurant owners can revive their business. This particular solution will resolve the problem not by changing the overall environment of the restaurants or changing service quality or standards, but by improving the marketing of the Chinese restaurants. In today’s world, marketing has become extremely important because consumers are loaded with information from everywhere. It is essential to squeeze your message in the mix in order to attempt to grab the attention of the consumers. Today, consumers do not just go and search for restaurants themselves. On the contrary, they rely on information from their friends and family or they try to search information online or social media. This is why it is extremely important to enhance the marketing channels of Chinese restaurants around State College. There are many ways using which marketing efforts can be improved (See Figure 2). For example, restaurants can use social media to make people aware of their services and meals. Social media has become an essential marketing tool for the service industry because it provides relevant information to potential customers swiftly (Xiang & Gretzel, 2010). The company page should post regular pictures of restaurants, and engage members in regular debate. This is a good and cheap way to inform the customers regarding the environment of the restaurants. Also new deals can be announced to keep the audience engaged. Restaurant owners can also reward loyal customers in order to increase customer base of the restaurants. This is a good way to improve the reputation of Chinese restaurant among non-Chinese customers. Another effective way of improving the marketing efforts of restaurants is by using college students as marketers. They can be used to spread the word regarding the restaurant. Word of mouth marketing has become a powerful tool in marketing because it is highly effective (Gronroos, 1984). Research also suggests that customer preferences can be influenced using word of mouth marketing (Chevalier & Mayzlin, 2003). Especially in the restaurant industry it can be highly effective because people often try out different eating places based on the information they get from different people. This is another cost effective way to attract customers. Restaurant owners will only have to pay some money to students but it will not be much. Talking about the marketing efforts, we should not also forget introducing bundle deals for students of the State College because it can improve the image of the restaurants among the local youth. These deals will also attract non-Chinese students of State College and will help the restaurant owners expand the market of restaurants. By designing special deals, restaurants can cater to the expectations of an ever-increasing customer base. Targeting students can also help in improving business because they will spread a positive viewpoint about the restaurants in front of their parents and family members. Therefore, this solution is effective and can help solve the problems that Chinese restaurants around the State College are facing. The aim should not be to lower prices but to offer bundle deals in order to attract student groups. Discounts and coupons can be given on meals for 3 or 4 students because students usually hang out to restaurants in the form of groups. Figure 2: Marketing Channels Conclusions and Recommendations The best solution that fits the criteria among the two is the solution to improve the dining experience of the customers. This is the best alternative because it involves bringing operational level changes to the restaurants. The other proposed solution of increasing marketing of restaurants was not as appropriate because it would not have brought any operational level changes. The environment of the restaurant can only be changed through the first solution and this is why it is the best solution among the two. Customers come to the restaurants to have a memorable dining experience; therefore, providing them with an enjoyable experience can definitely increase the customer base, which will consequently increase the reputation and business of the Chinese restaurants. Chinese restaurants around State College can improve their service standards and environment by changing the interior design of the restaurants. Lighting, furniture, tables etc can be changed so as to improve the overall ambiance of the restaurant. Chinese restaurants should also cater to the non-Chinese customers. Menus should be designed so as to target both Chinese and non-Chinese customers. Restaurant owners should also invite the customers to give their feedback, which can be used as a metric to analyze the effects of changing the environment. All of these recommendations can definitely play an effective role in resolving problems of the Chinese restaurants, as well as in helping the restaurant owners expand their business to other parts of the United States. References Chevalier, J. & Mayzlin, D. (2006). The effect of word of mouth on sales: Online book reviews. Journal of Marketing Research, 43(3), 354-354. Gronroos, C. (1984). A Service Quality Model and its Marketing Implications. European Journal of Marketing, 18(4), 36-44. Xiang, Z. & Gretzel, U. (2010). Role of social media in online travel information search. Tourism Management, 31(2), 179-188. Appendix I: Proposed Survey Name:_______________________________ Year:_____________ Major:_______________________________ PSU Email:____________________ How often you go out for dining? Do you like going to Chinese restaurants? If yes, how many times a month? What do you like the most in restaurants? (Presentation, General environment, Kids play area, Music, or Cultural feel) What are the dishes you mainly look for in Chinese restaurants? Are you satisfied with the dining experience in Chinese restaurants? If not, why? Other comments/suggestions: Appendix II: Responses to Colleague’s Rough Draft Qijing Yan: Can the reader quickly see the general scope and arrangement of the material covered? Yes, the reader can quickly see the general scope and arrangement of the material covered. The material is put together in a way that the reader can easily navigate and interpret. Can particular parts be found quickly and easily? Yes, the table of contents does a very good job in deciphering where each section is. Particular parts can be found quickly and easily. Does the introduction of the draft contain an explicit purpose statement? Does the introduction clearly describe the context in which the report is being written? Say what you like about it and/or suggest improvements. Yes, the introduction of the draft contains an explicit purpose statement. The introduction clearly describes the context in which the report is being written. It is very straight forward and understanding which makes it easier for the reader and starts the reader off with a positive attitude. Are segments clearly arranged so that the reader can find information quickly and easily? Give examples. The segments are clearly arranged so that the reader can find information quickly and easily although the spacing with titles should be altered to make it more visually appealing. Corrections were made in the report. How well does the draft define the problem that motivated the report? Is it clear why the problem is significant to the intended audience? Say what you like about it and/or suggest improvements. The draft clearly defines the problem and in a lot of depth, very good job. Yes, it is very clear as to why the problem is significant to the intended audience. You do a very good job in explaining in depth why and how the problem is affecting the audience. Good job. Does the author's recommendations seem to follow from the information he or she has presented? Are the recommendations based on sound reasoning, and are they clearly written with the intended audience in mind? The author’s recommendations follow from the information has been presented. The recommendations are based on sound reasoning although it is possible for be solutions to be recommended in conjunction with each other. The recommendations are clearly written yet the solutions are vague, although your target audience is large and each restaurant is different, maybe some examples of how they can change their dining experience would help the reader understand more. Is the style clear and concise? Are there grammatical, spelling, or punctuation problems? You may want to comment on any possible problems right on the draft. The style is clear and concise yet there are grammatical and punctuation problems. Problems have been addressed in the report above. Are references cited appropriately? Are they consistently handled? Are appendices clearly referenced in the text? References are both properly cited as well as consistently handled. There are no appendices referenced in the text. Other comments and suggestions? Refer to the draft for corrections. Read More