The Growing Demands of the Customers of the Restaurant - Case Study Example

Running Head: Business Decision Making Business Decision Making of Business Decision Making Introduction In recent times, the restaurant industry has flourished and developed and concentrates on providing wide ranging services in order to win its customers. Owners, managers and executives of the restaurant industry are aware of the fact that that their future growth is dependent on their past and present accomplishment. Therefore, they strongly concentrate on finding innovative and new methods to calculate and evaluate their performance (Andaleeb, 181, 2008). According to the National Restaurant Association, more than four hundred million dollars are spent on meals, which are eaten at restaurants (National Restaurant Association, 89, 2003) . This industry has rapidly grown in few decades because the way of living in United States have changed. In this fast paced society, people are opting for eating out rather than cooking at home. This paper will select an organization from the restaurant industry and will address its business problem in the lights of broad and diverse academic resources. Case Study: Literature suggests that customer satisfaction and winning their loyalty is the hub of any marketing strategy. Customer satisfaction is important for several reasons. For instance, it customers are not satisfied with the service; they will complain to the management or would redress. If the customer complains are not taken seriously, there will be significant amount of ramifications(Andaleeb, 185, 2008). There is a possibility that customers may use negative words for the restaurant as a way of seeking revenge. Consequently, the service provider will discourage other customers away from the restaurant. In a short period of time, the restaurant will be out of customers and business. The mission statement for Sagebrush Sam is to provide high quality steaks, which are customized by the customers. The organization seeks to serve hand-cut steaks, which is done on the premises and it is seasoned according to the requirements of the customer. As requested by the customer, the steaks are cooked. The company believes that this feature has assisted them in building their customer base. The organization selected for this report is Sagebrush Sam, which has been experiencing some problems in meeting the customer demands. The issues revolve around customer satisfaction because customers want value in the items they buy, problems to coop with increasing expectations and wishes to create a friendly atmosphere for it consumers. With increasing competition in the restaurant industry, it has become hard to distinguish from restaurant to another. This report has proposed a business plan for Sagebrush Sam in order to address the issues related to customers. Literature Review Literature suggests that satisfaction is directly proportional to loyalty. Several researches have been conducted, which have proved that the relationship between satisfaction and loyalty is directly proportional. Some researchers argued that this relation is not linear and that satisfaction and loyalty depends on the nature and behavior of the consumer(Gaski & Nevin, 132, 2005). In a study conducted by University of Michigan, two hundred restaurants were studied and analyzed. These firms were analyzed in order to calculate the American Customer Satisfaction Index. The organization received the ACSI on basis of customer perception and attitude, which were based on their contentment, expectation, value, etc(Gaski & Nevin, 136, 2005). From literature, it is evident that the clear and accurate information on the target market is the key to survival in the restaurant industry. It is important to carry out a well planned and detailed research on the industry as well as the attitude of the customer. According to researchers, customers are important for securing a position in the restaurant industry. Therefore, it becomes important that the customer needs and requirements are covered (Grewal, Monroe & Krishnan, 48, 1998). Research suggests that often the organization fails to recognize the needs and demands of the customers. At the same time, they fail will to recognize the fact that their competitors concentrate on customer satisfaction and needs, which help them run their business. A research conducted by PZB, more than one hundred individuals took part in a survey. The survey concentrated on measuring the organization’s ability to satisfy their customers. It was concluded that the restaurant that failed to satisfy it customers because it did not give them the services they wanted. In another survey, it was found out that service and quality were not provided by restaurants. Consequently, customers became dissatisfied and asserted that they would not recommend the restaurants, which failed to address their needs and requirements. In another study conducted by University of Michigan, more than three hundred restaurants were studied and analyzed. It was found out that more than one hundred and ninety restaurants did not address the needs of customer. Consequently, these restaurants lost their customers to their competitors and experienced heavy losses (Grewal, Monroe & Krishnan, 52, 1998). Ultimately, majority of these restaurants shut their business because they failed to win customer loyalty. Business Plan for Sagebrush Sam As mentioned earlier, Sagebrush Sam has problems in addressing customer demands and satisfaction. The organization seeks to serve hand-cut steaks, which is done on the premises and it is seasoned according to the requirements of the customer Adding value to the items, meeting customer expectation and creating friendly atmosphere are the goals, which Sagebrush Sam has to meet. The following business plan has been suggested in order to deal with the issues: The first step is to ensure that the waiters treat the customer with politeness and courtesy(Grewal, Monroe & Krishnan, 53, 1998).. For this purpose Sagebrush Sam has decided to give proper training to their waiters in order to deal with customers. At the same time, the training will be useful in creating a friendly atmosphere for them. The second step is that Sagebrush Sam will concentrate on offering deals to its customers. Research suggests that offering deals is one of the most effective ways of maintaining customers. The organization has decided to give twenty percent discount on weekdays. This step will be beneficial in adding value to the services and products, which the customers purchase from Sagebrush Sam The third step would involve around the expectations of the customers. It is very important for Sagebrush Sam to meet the expectation of the customers. For this purpose, the company will give a survey to each of its customers in order to know what they want. This will assist them to know the needs and demands of the customers. http://www.cheathouse.com/essay Research design Research design is considered to be the arrangement and organization of the research project. It is a method of gathering the important information and data. In order to implement the business plan for Sagebrush Sam, first secondary sources were analyzed and evaluated in the customer satisfaction in the restaurant industry domain. Analyzing the existing literature is important as it is first necessary step of understanding customer needs and satisfaction. After the analysis of second resources, the first step was to collect information by using qualitative methods from other restaurants. This step assisted in recognizing the factors, which are responsible for describing and defining the customer satisfaction and needs in the restaurant domain. After this process, it was important to design a questionnaire in order to know the attitudes of the consumers and customers. A pilot study was conducted which assisted in determining the strong and weak points of the survey. It included all the necessary variables. After the completion of pilot study, modifications were made in the survey so that mistakes and ambiguities could be removed. Survey method was used to understand and know the demands of the customers. This study has employed the questionnaire method because it is economical and efficient. At the same time, individuals are familiar with the survey method. The survey method will concentrate on gathering consumer data. This would assist Sagebrush Sam to address the needs and demands of the customer. At the same time, it will assist the organization to know how to add value to the items, meet customer expectation and create friendly atmosphere. Measurement From the questionnaire, which was given to the participants, they were asked to analyze and evaluate their experience in the restaurant. The survey had detailed questions and it explicitly asserted that responses would be kept confidential. In order to know the attitudes and perceptions of the customer, questions were developed on the basis of literature review. The entire survey had two main parts. The first part of the survey has yes and no questions and the second part was related to expectations from the restaurant. Sampling Participants were selected randomly, on basis of their visit to Sagebrush Sam. The organization had their local addresses and the mailed three hundred surveys. The survey concentrated on preserving the identity of the respondents. Additionally, they were requested to send the complete survey by post. Only eight five questionnaires were mailed and were completed. This showed that the response rate was not more than fourteen percent. Harbaugh (70, 2002) asserts that “Response rates for traditional mail surveys have continued to decline to a point where the average is below 20%.” However, if the questionnaire had some incentive, the rate of response would have increased. However, it was important to keep the constraints in mind. Resource constraints made it impossible to implement the incentive strategy. Additionally, 25 more customers were interviewed. This was done in order to eliminate the possibility of the bias and partiality. Consequently, the final size of sample was one hundred. Based on this, the results were analyzed and conclusions were made. Data Analysis After the survey was collected from the participants, it was important to employ the statistical measures so that the data can analyzed statically. The facts and figures were analyzed. The statistical analysis concentrated on calculating means, mode, standard deviation, etc. As mentioned earlier, the aim of this study was to understand Sagebrush Sam has problems in addressing customer demands and satisfaction. The business plan was suggested on basis of the literature review. Furthermore, the survey was employed in order to understand the needs and demands of the customer. The data collected from the questionnaire had to be analyzed by implementing descriptive statistics. The frequency and percentage were also calculated. Also, means and standard deviations were calculated. The survey had comprised of two essential parts. The first part of the survey has yes and no questions and the second part was related to expectations from the restaurant. Analysis variance was used to determine the equality of group’s mean. Results The results gathered from the data suggests that Sagebrush Sam should give proper training to their waiters in order to deal with customers and it will help them to create a friendly atmosphere for them. In the survey, sixty percent participants agreed that training should be given to the waiters. It also suggested that the company should introduced new deals. The offer deal would effectively maintain the customer base. The data indicated that more than eighty percent agreed that it would effectively maintain customers. More than seventy percent of users agreed that the organization should concentrate on needs and demands of the customers. Summary and Conclusions The restaurant industry has flourished and developed and concentrates on providing wide ranging services in order to win its customers. Literature suggests that customer satisfaction and winning their loyalty is the hub of any marketing strategy. Customer satisfaction is important for several reasons. The company selected in this study was Sagebrush Sam, which seeks to serve hand-cut steaks. The company was facing issues in meeting the growing demands of the customers. For this purpose, a business plan was proposed in order to meet the growing demands of the customers. First secondary sources were analyzed and evaluated in the customer satisfaction in the restaurant industry domain. Survey method was used to understand and know the demands of the customers. In order to know the attitudes and perceptions of the customer, questions were developed on the basis of literature review. The entire survey had two main parts. The first part of the survey has yes and no questions and the second part was related to expectations from the restaurant. Participants were selected randomly, on basis of their visit to Sagebrush Sam. The organization had their local addresses and the mailed three hundred surveys. Only eight five questionnaires were mailed and were complete. Additionally, 25 more customers were interviewed. The results gathered from the data suggests that Sagebrush Sam should give proper training to their waiters in order to deal with customers and it will help them to create a friendly atmosphere for them. Overall, the study concentrated on implementing the business plan, which was proposed for Sagebrush Sam. Bibliography Andaleeb, S.S. (2008), "Determinants of customer satsifaction with hospitals: a managerial model", International Journal of Health Care Quality Assurance, Vol. 11 No.6-7, pp.181-7. Gaski, J.F., Nevin, J.R. (2005), "The differential effects of exercised and unexercised power sources in a marketing channel", Journal of Marketing Research, Vol. 22 No.2, pp.130-42. Grewal, D., Monroe, K.B., Krishnan, R. (1998), "The effects of price-comparison advertising on buyers perceptions of acquisitions value, transaction value, and behavioral intentions", Journal of Marketing, Vol. 62 No.2, pp.46-59. Harbaugh, R. (2002), "Proven lessons for generating good mail survey response rates", Medical Marketing and Media, Vol. 37 No.10, pp.70-5. National Restaurant Association (2003), Restaurant Industry Forecast: Executive Summary, National Restaurant Association, Washington, DC, . Read More