China China Retail Management Analysis - Essay Example

? Retail Management Report [Insert [Insert [Insert [Insert [Insert If Any] Introduction A retail business is started primarily to generate profits of course with the risk of running a loss; the objectives of the business can be achieved best by carrying out a retail audit to establish the best way to position the business and utilize available resources for maximum returns say Birn (2004). A business audit refers to the analysis of a select retail outlets sample by collecting information and data on the sales, demographics, efforts at promotion and other aspects of a retail business. Retail audits are usually specialized services offered by firms or individuals as a subscription service. The growing interest in Chinese and oriental culture including food has spawned a new era of Chinese/ oriental restaurants. China China is a restaurant that wants to offer Chinese cuisine to customers and therefore needs information about the sub industry on a variety of retail aspects. This retail audit will use collected data from a survey on Mandarin restaurant to propose effective marketing methods for China China Chinese restaurant based on the gathered social information. The recommendations will entail decisions on segmentation, location, product ranges, pricing, ambience at the restaurant, customer service, employees, and the necessary work force, a budget, and how the business is sustainable. The recommendations will also cover communications; and thereafter draw a conclusion based on the survey Company background China China is a restaurant business with the intention of establishing in the city of………. The company is entering into a fast growing retail industry of Oriental and Chinese cuisine, which is becoming very popular. The owner of the business is a local with an eye for restaurant investments and no prior experience in Chinese restaurant cuisine. In order to minimize risks, the entrepreneur needs detailed information on the industry and competitors, their pricing range and the demographics of oriental/ Chinese food consumers. These are important in determining the business location, pricing, amongst other items. The company aims at serving the younger generation in the 18 to 45 year age bracket and achieves profitability within the second year of operation. Objectives of the research The aims of this research is to establish the demographic trends for oriental Chinese cuisine customers, the nationalities frequenting these restaurants, the foods these customers prefer, what they spend on an average meal at a Chinese restaurant, frequency of visit to these restaurants, other Chinese restaurants they prefer and their overall satisfaction levels in terms of convenience, location and service. This information will be used to review the strengths of the sector, inherent weaknesses and threats, and how the market is segmented. This information will then be used to make recommendations and conclusions as regards pricing, advertising and promotion, merchandising, customer service, product offering, the sustainability if the business, where it should be located and the best regime for pricing. It will also recommend on what customer segments to target as customers; with justifications based on the research Research methodology The research was approached by utilizing a pragmatic research approach using both quantitative and qualitative techniques. A survey questionnaire was prepared taking into consideration the research objectives and sample size was decided by randomly selecting respondents. Random sampling was used because it gives every potential respondent a chance to be selected and ensures the data collected is not biased and therefore provides information that is fully representative of the population, contends Bradley (2007) The retail audit Market A market is the group of organizations or consumers that are interested in a product, are allowed by law or regulations to acquire the product, and are able to afford the product or service. One looks at a market from the point of view of the total population, then narrows down until the smaller market that is penetrated is arrived at, says Weinstein (1998) Market trends Based on the research survey, mostly males visit Chinese restaurants, with females being fewer. From the survey results, 42 percent of the respondents were female and 58 percent male as illustrated below; In terms of nationality, the majority of Chinese restaurant customers were Asian Chinese, followed by white Britons and Asian Indian. The visitors were however diverse in terms of nationalities as the table below illustrates; Most visitors were young persons aged between 18 to 25 years as the chart below shows Market forecasts The market for Chinese cuisine is growing and is expected to grow exponentially; results show that Chinese food has grown greatly in popularity, beating even Thai, Indian curry and British foods in 2010, as reported in the ‘Daily Mail’ (2010). The market for Chinese food is therefore already growing fast and the trend is expected to continue in the future. The Chinese food microenvironment Chinese food is loved for its authenticity and uniqueness as well as a refreshing taste. It is affected by the population dynamics and trends as seen from the results; most customers (53 percent) who responded to the survey are of Asian Chinese origin. These may be immigrants or temporary visitors to the UK and majorities are aged between 18 and 25 years. White Britons are also a major market for Chinese food although much fewer; forming just 18 percent of the Chinese food customers. The microenvironment is the immediate environment that affects a particular segment and includes customers, competitors, distributors, suppliers, and dealers since they directly affect the ability of a restaurant business to earn profits as Mennen (2007). Customers Most customers are Asian Chinese, white Britons, and Asian Indians. The majority of the customers are aged between 18 and 25 years, showing a young and trendy customer base. Behavioral factors Most customers spend between 16 and 24 British pounds per meal as illustrated below. Most of the customers are students with full time and part time employed persons forming the bulk of Chinese food customers as data shows. These customers prefer to eat their meals in the restaurant; however, a big majority also has bought take away foods. 78 percent of the respondents have visited a Chinese restaurant before while just 22 percent have not visited a Chinese restaurant before. A majority of the respondents said they were loyal to mandarin restaurant and visit there for a particular Chinese dish. Most customers to the restaurant are males Market shares Most of the respondents have heard or know about the other restaurants with China China being the most well know Chinese restaurant. The assumption here is that a restaurant is known only because of a prior visit and experience. This way, China China has a huge market share, as the chart below illustrates Competitors The major competitors to China China in the market are Mandarin, Dancing Dragon, China House, Noodle King and new Ocean City with China China, dancing Dragon and Mandarin Chinese restaurants being the most dominant in terms of the number of customers that know them Strengths of mandarin restaurant Central location Known by most of the respondents A wide variety of Chinese food Relatively lower and affordable prices Good feedback as a majority of mandarin customers came to know about the restaurant from the recommendation of friends. This is tied to customer satisfaction with the food, products, and service at Mandarin restaurant. Diverse customer base that includes Indians, Chinese, Britons, Pakistani, Thai, Germans and even a Kenyan, among other nationalities Weaknesses The restaurant caters mostly to a young population who are students. Generally, students’ purchasing power for such delicacies is lower and could be why mandarin restaurant have set their prices to be affordable It also speaks of mostly Asian Chinese as the majority of its customers Mostly, only a few visitors come to the restaurant at a time (between one and six), the restaurant should have many people visiting at a time to be assured of volumes as its prices are set relatively low. Customer profile The average customer to Mandarin restaurant is young persons aged between 18 and 25 years who is mostly likely to be a student or a working adult or someone working part time. The customer is likely to be coming for a particular meal and because it is affordable to them. A visitor to Mandarin restaurant is also likely to be a Chinese of Asian origin or a white Briton and prefer to eat within the restaurant. The customer is also likely to be a social person using social networking as most responded to have heard about the Chinese restaurant form a friend and is loyal. The customer also mostly spend between 16 and 24 pounds per meal Macro environment and economics This refers to the major uncontrollable factors external to the business that affects decision-making, strategies, and overall performance. The external factors entail demographics, political factors, environmental factors, economic factors, social factors, competitors, and technology avers Waite and Ennew (2007). It is important in developing major and broad range strategies such as expansion, pricing, and promotion. The UK economy is currently experiencing a rise in producer prices as well as increasing sales, with retail sales increasing 1.8 percent in March compared to February 2012 as reported by Pym (2012) in the BBC news online edition. This was mainly die to warm weather and a the timing of Easter, however the consumer spending power is being eroded with wages growing at a slow 1.4 percent and a rising inflation which is forecasted to stay above 3 percent through out 2012; a rate higher than wage growth, which lowers consumer spending power. While the economy of the UK can be regards as being in recovery, inflation is still high, standing at 3.5 percent in march 2012 as reported Demographics The UK has a population of 62 698 362 as of 2011 estimates with those between 15and 64 years forming the majority at 66.2 percent, those below 15 years are 17.3 percent while those over 65 are 16.5 percent. The median age is 40 years with females having a median age of 41.1 years while males have 38.8 years according to ‘Index Mundi” (2012). The UK population is growing at 0.557 percent as of 2011 estimates with many immigrants coming into the country at 2.6 migrants for every 1000 persons. The majority ethnic group is British whites at 92.1 percent, blacks’ form 2 percent, Indians 1.8 percent, Pakistani 1.3 percent, mixed ethnicities 1.2 percent, and others making up 1.6 percent according to the 2001 census. These trends show that one should target the white British population who form the majority of the population. Technology The British economy is highly advanced in terms of technology and its use with internet speeds being high. The use of technology in restaurants has also grown tremendously with many having high tech equipment, using and accepting payments by credit card, using point of sale systems, and the use of the internet to make reservations, pay for or order delivery of food. The young people use social media a lot and this has influenced the restaurant industry in the UK positively. Staff can also get training online at their own convenience to improve their skills. Restaurants are also able to make orders and procurements electronically over the internet reducing costs and time to delivery. Technology has therefore had a major impact on the UK restaurant industry and the trend is projected to continue, argues the “Restaurant owner” (2012). Political/ legal factors The UK government is in a drive to reduce the number of immigrants coming into the UK to just tens of thousands, especially illegal immigrants who sometimes end up putting a strain on the economy and their numbers are expected to fall in 2012. The current financial crisis has also helped in lowering the number of immigrants into the UK. The lowered immigrants could harm the UK economy’s recovery efforts as the population is generally ageing and need immigrants to provide specialized and / or cheaper labor, says “Work permits” (2012) Marketing assets of Mandarin restaurant That most of Mandarin customers heard about the restaurant from friends mean that it gets most of its new customers form referrals as data from the research shows; Friends and family are therefore major advertising assets for the restaurant Chapter III Conclusions and recommendations Segmentation The restaurants customers are mostly Asian Chinese between the ages of 18 and 25 and are mostly students. The restaurant also has sizeable white British customers, Sian Indians and Vietnamese. Overall, it has a wide variety of customers as regards their nationalities and ethnicities. A majority of its customers is young students with a few in full or part time employments and is mostly male who visit the restaurant in groups of between two and six persons. The customers prefer eating within the restaurant but have previously bought take away Chinese food and know about other competing restaurants. The customers are also loyal to their restaurant and come to buy due to a liking for a particular food and the affordable prices Location The restaurant has a superb central location as shown by respondents who said they found the restaurants’ location very convenient and easy to access Price, Merchandise, and customer service Most customers come to the restaurant because they feel the prices are easily affordable and spend just between 16 and 24 pounds. This is convenient, offering a range of products that are easily affordable to a majority of its clients and because many are repeat loyal customers, their customer service must be good enough to retain their customers. Sustainability With growing interest in Chinese food, a Chinese food restaurant is sustainable, given that Chinese food has overtaken Indian curry and British food as the most popular food in the UK. The restaurant has a human resource policy of employing young and trendy staff who are better able to deal with the young immigrant population who form the majority of the customers. Recommendations China China should take into account the social media in its marketing strategies and decisions; this is because from the research, majority of restaurant customers learnt about it from friends and family. It should therefore have a social network presence for instance incorporated into customer relationship software like Sales-force to track views and opinions in the social media about it and its products. Most respondents at Mandarin restaurant have knowledge of other Chinese restaurants as well and so the China China management must maintain competitive prices and quality customer service to stay ahead of its rivals. To get good referrals, China China should maintain high customer service standards with an ambience attractive to, and suitable for the young population. The restaurant can invest in hiring Asian Chinese as part of its staff to cater to the mainly Asian Chinese population who are the majority of Chinese food restaurant customers. The restaurant should also be located strategically especially near immigrant Asian communities as these will form a majority of its customers; a proximity to institutions of learning will help its sales as most customers to Chinese food restaurants are students with a sizeable working people and a dozen part time employees. In terms of pricing, the restaurant should set its prices low or rather more affordable as majorities of customers to Chinese restaurants are young students willing to spend just 16 – 24 pounds. Its products should therefore be priced in this range. The restaurant should hire between five and seven staff since most visitors come in groups of between one and six at a particular time and prefer to eat within the restaurant. Targeting the young and immigrant students at affordable prices should help the restaurant increase its sales by 20 to 30 percent in the first year after implementing this research projects’ recommendations. Being frequented by the young, the restaurant should have a chic, sexy layout with funky music, practical arrangement and other features like hip magazines, a cool music system and equally cool and vibrant colors associated with energy like red and orange, luminous green. The exterior should be lively with flashing neon signs and lights to attract the young customer base. Bibliography (2012), Report reveals UK immigration numbers expected to fall in 201, . Available from: , : http://www.workpermit.com/news/2012-01-03/uk/report-reveals-uk-immigration-numbers-expected-to-fall-in-2012.htm [Accessed: Apr 11, 2012] (2012), Technology, . Available from:  http://www.restaurantowner.com/public/department27.cfm [Accessed: Apr 12, 2012] (2012), United Kingdom Demographics Profile 2012, . Available from: , :  http://www.indexmundi.com/united_kingdom/demographics_profile.html [Accessed: Apr 12, 2012] Birn, R, (2004), The Effective Use of Market Research: How to Drive and Focus Better Business Decisions, 4th ed, Market Research in Practice, New York Bradley, N, (2007), Marketing Research: Tools & Techniques, Oxford University Press, New York Daily mail, (2010), Chinese food beats British, Thai and even Indian curry to become nation\'s favorite cuisine, Available from:  http://www.dailymail.co.uk/femail/food/article-1249370/Chinese-food-beats-British-Thai-Indian-curry-nations-favourite-cuisine.html [Accessed: Apr 12, 2012] Ennew, T. Waite, N. , 1st Initial, (2007), Financial services marketing: an international guide to principles and practice, 1st edition, Butterworth-Heinemann, Oxford, UK Mennen, M, (2007), Applied Marketing Strategy - The Rocker Hotel Sunderland, GRIN Verlag, Nordestedt, GERMANY Pym, H, (2012), "Bank of England\'s Paul Tucker warns on inflation rate ", BBC News, Apr 22 Weinstein, A, (1998), Defining Your Market: Winning Strategies for High-Tech, Industrial, and Service Firms, The Haworth press Inc, New York Appendices Appendix I Research data Mandarin Restaurant Survey results 1)Gender Male 146 Female 104 250 2)Nationality British White 41 Turkish 3 Asian Chinese 122 German 1 Asian Japanese 4 Polish 3 Asian Thai 6 Austrian 1 Asian Korean 4 French 7 Vietnamese 12 Kenyan 1 Asian Indian 23 Malaysian 1 Asian Pakistani 17 Portuguese 3 Romanian 1 230 20 250 3) Age 18 - 25 155 26 - 34 41 35 - 44 30 45 + 24 250 4) Occupation ? Full time employment 56 Part time employment 34 Self-employed 4 Unemployed 3 Student 138 Retired 15 250 5) Post Code NG1 NG2 NG3 NG7 NG9 NG10 NG12 LE 132 45 17 34 15 5 1 1 250 6) Have you ever visited a Chinese Restaurant? if no, do not continue Yes No 196 54 250 7) If you chose no, please state why? 8) How many of you visit the restaurant at a time? 1 - 2 4 - 6 7 - 9 10 + 96 84 14 2 196 9)Do you purchase chinese take away food? Yes No 160 36 196 10) Do you prefer eat in or take out? eat in take out Both 55 34 107 196 11) Why? 12) Do you visit a Chinese restaurant for one particular dish? Yes No 129 67 196 13) Why? 14) Have you heard of the below restaurants; Yes No Yes No China China 169 27 196 Dancing Dragon 134 62 196 China House 119 77 196 Noodle King 124 72 196 New Ocean City 127 69 196 15)Are you a loyal customer at the Mandarin Restaurant? Yes No 124 72 196 16)How did you come to know about the Mandarin Restaurant? Advertisment Leaflets Friends Family Other 27 14 96 38 21 196 17)What do you think about the location of The Mandarin? Convenient Easy to find Hard to find 111 58 27 196 18) How much do you spend on each visit (per head)? Under ?15 ?16-24 ?25-34 ?35-44 ?45-54 Above ?55 49 93 29 11 11 3 196 19)Would you come here for any event? E.g. Birthday, Anniversary etc Yes No Maybe 80 33 83 196 20)Would you recommend your friends/family to visit for any event? E.g. Birthday, Anniversary etc 21) Why? 22) How do you feel about the price of the food in the Mandarin? Affordable Expensive Don't mind 128 28 40 196 23)How often do you visit the Mandarin restaurant? Once a week 66 twice a week 41 three times a week 6 Other 83 196 24) Please state other chinese restaurants you visit apart from The Mandarin? Read More