Monthly Expenditure in Restaurants - Case Study Example

Table of contents 1.0 Introduction 2 2.1Monthly expenditure in restaurants 2 2.2 Average meal expenditure 4 2.3 Post code providing best location 6 2.4 Monthly expenditure dependency on income 8 2.5 Waterfront view and drive less than 30 minutes 9 2.6 Preference of unusual deserts and unusual entrees 11 2.7 Patronage and marital status 13 2.8 Investigation of probable patrons preferred local newspaper section 15 2.9 Investigation of probable patrons and family size 16 2.10 Ability of variables to fully explain monthly expenditure when considered simultaneously 18 3.0 Summary/conclusions 20 Reference 22 1.0 Introduction This business report is prepared for client who would like to establish fine, upscale restaurant with fine entrées, drinks, and desserts in an elegant atmosphere. The client has knowledge in restaurant operations and some knowledge in upscale restaurants but lacks surety that the city may be in need of such a restaurant. The client interest is to establish if there is demand for the restaurant and the appropriate pricing. In any market there will be big difference in markets as far as consumer preferences and income level. In this study the following have been investigated. Design and operating characteristics The appropriate location of restaurant Appropriate way of restaurant promotion 2.1Monthly expenditure in restaurants A t-test was used to find out if the patrons are able to spend an average of $200 per month. The hypotheses for the test were HO An average of $200 per month on food is not different from the respondents’ expenditure H1 An average of $200 per month on food is significantly different from the respondents’ expenditure Figure 1: Frequency distribution of amount spent per month The results revealed that the sample mean is $ 150.0525 (SD = $ 92.706) as seen from figure 1 is significantly different from the hypothesized mean, t (399) = -10.775, p0.001 (Table 2). From these results the null hypothesis accepted as potential patrons can be able to pay $18. Table 2: One-Sample Test Test Value = 18 t df Sig. (2-tailed) Mean Difference 95% Confidence Interval of the Difference Lower Upper What would you expect an average evening meal entree item alone to be priced? 1.567 339 .118 $.83529 $-.2131 $1.8837 2.3 Post code providing best location for the restaurant The study was investigation to find the best location for the restaurant with the following hypothesis HO There is no relationship between the residence and the likelihood of being a patron H1 There is a relationship between the residence and the likelihood of being a patron. In order to test the hypothesis a chi-square test was done whose aim was to establish if there was a significant relationship between the two variables under investigation. From figure 3 it can be observed that the highest number of indicated that they are very likely or somewhat likely to patronize the restaurant were from post code area B. The post code area B also had the largest proportion of the respondents indicating they are very likely or somewhat likely in comparison to other post code areas. A significant relationship exist between location and the likelihood of patronizing the restaurant χ2 (3) =198.868a, p < 0.001 as seen in table 3. This is a clear indication there is a relationship between residence and likelihood of being a patron. Therefore, the null hypothesis is rejected. Figure 3: Relationship between location post code and patronizing of restaurant Table 3: Chi-Square Test Value df Asymp. Sig. (2-sided) Pearson Chi-Square 198.868a 3 .000 Likelihood Ratio 201.011 3 .000 Linear-by-Linear Association 78.406 1 .000 N of Valid Cases 400 a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 5.55. 2.4 Monthly expenditure dependency on income A correlation test was used to find out if there is a relationship between the amounts spend in restaurants per month and the income of the respondents. The hypotheses for the test are HO The average monthly expenditure in restaurants is not dependant on the level of income H1 The average monthly expenditure in restaurants is dependant on the level of income The correlation test result in table 4 indicates that there is a strong correlation between the average monthly expenditure in restaurants and the level of income. Pearson correlation 0.884 p 0.01 as seen in table 7. In conclusion, the null hypothesis is true as for one to be a potential patron is not dependant on their marital status. Figure 6: Patronage and marital status Table 7: Chi-Square Tests Value df Asymp. Sig. (2-sided) Pearson Chi-Square .364a 2 .834 Likelihood Ratio .367 2 .832 Linear-by-Linear Association .050 1 .823 N of Valid Cases 400 a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 9.71. 2.8 Investigation of probable patrons preferred local newspaper section To investigate if the probable patrons had a preferred section of the local news paper cross-tabulation was done and chi-square test was also performed. The hypothesis for the test were H0: There is no association between which section of the newspaper a person reads most frequently and the chance of being a probable patron. H1 There is association between the sections of the local newspaper a person reads frequently and the chance of being a probable patron. From figure 7 it is observed that majority of the respondents who indicated that they were probable patrons of the restaurant either read the editorial or the business section of the local newspaper. There is a significant relationship between the two variables χ2 (4) =168.977, p Read More