Understanding the Success Factors for Independent Restaurants in the Delhi / Gurgaon Region: An Analysis of the Gap between Management Perceptions and Customer Expectations

By Budhwar, Karnikeya | Journal of Services Research, October 1, 2004 | Go to article overview

Understanding the Success Factors for Independent Restaurants in the Delhi / Gurgaon Region: An Analysis of the Gap between Management Perceptions and Customer Expectations


Budhwar, Karnikeya, Journal of Services Research


INTRODUCTION

Strong economic growth, increased disposable income and the impact of various factors have fuelled a strong demand for dining places in India's capital city. The restaurant business being a comparatively low entry barrier industry is also being perceived as an attractive option for those bitten by the entrepreneurial bug. A few decades ago, Delhi had little to offer by way of world cuisines and there was not much else in the offing beyond United coffee house, Moti Mahal and Wengers and others such, mostly in the vicinity of Connought place. The past 15 - 20 years has witnessed the growth of a heavily fragmented, increasingly diverse, competitive and almost chaotic restaurant business in Delhi. The choice for consumers is now immense and most major cuisine groups of the world are represented to some degree in the National Capital.

Unfortunately little has been done in terms of research towards understanding and analyzing Delhi's restaurant business. Gathering quantitative data is an uphill task for a researcher, as operators seem reluctant to divulge any information that may be too "penetrating". This has created a huge gap in information that professional bodies like HVS international and the FHRAI are trying to fill but the over all lack of reliable information on basic Industry statistics is disappointing and disconcerting. Therefore the study has been conducted as an empirical work in the Delhi-Gurgaon region with some of the following objectives:

RESEARCH OBJECTIVES:

* To study the opinions of operators in the independent restaurant sectors on a given set of impact variables dealing with various aspects of their service and product.

* To evaluate the factors that have a crucial impact on the success / failure of the restaurant.

* To understand the attitudes of a sample customer base and assess factors which have an impact on their dining experience at restaurants.

* To identify any perceptual GAPS between managers/proprietors and customers perceptions.

* To identify and analyze, the preferred choice of cuisines for a sample customer base.

REVIEW OF LITERATURE

According to Jones and Merricks (1996), the nature of the restaurant industry is such that a primary component lies in staff - customer interaction. Hence the provision of excellent service is the key to success. This has been countered by some recent research by Wakefield (2004), who identifies five points for success for Pizzerias. According to him, excellent service is the minimum requirement in a highly competitive market. He identifies differentiation as the long-term factor defining successful service. Other factors identified through his research are: Technological investments, capacity, quality of physical facilities. Surprisingly, the research also suggests that money spent on promotions and advertising is largely wasted. This factor has to an extent been corroborated in the ensuing findings of this paper. Another limitation of stating service as the key success variable is that one needs to account for whether the seemingly excellent service that an operator is providing is in fact what customers really wants?

Tenner and De Toro (1992), argue that customers are looking for value in the products and service they purchase. This is described as the relationship between what you give and what you get. Apart from price and quality, a third variable of time is also taken into consideration here as part of the value package. These variables again need to be seen in the context of what the specific needs of the customer base are as well as how they may evolve in the future. The provision of service excellence can be seen as self-reinforcing cycle in the form of a positive relationship between optimal value to a customer and increasing profits to the organization. This is well depicted in the Figure 1.

Davis and Stone (1985), have stated that a large part of the hospitality provided by food and beverage operations consists of the tangible product elements of food and drink and not merely the intangible factors. They state that factors like presentation, look, temperature of the food are significantly important variables in the customers' over all experience. They also state that customers will tend to accept a certain degree of variation on the intangibles but are far less flexible when it comes to the tangible elements of the restaurant experience since the average customer understands the "human" element of service. This raises an important issue for operators to think about. It is important additionally, to highlight that production and consumption are inseparable in the restaurant business.

Another significant issue is that, since the evolution of mankind, the consumption of food has progressed from a simple physiologically quenching commodity to one that satisfies higher needs such as self esteem, social acceptance, and the human ego. For instance, one does not merely dine out to satisfy ones hunger, there are other motivations like socializing, making a "class" statement, etc. This further complicates the issue in terms of defining what customers really want, since individual needs are by nature unique and hence hard to segment.

In this regard, Martin (2003), has identified four basic customer service needs such as:

a) The need to be understood: this includes factors like establishing a rapport and showing empathy.

b) The need to feel welcomed.

c) The need for comfort: this is physiological and psychological comfort (not being intimidated, etc.)

d) The need to feel important: catering to the human ego.

Restaurant concepts are always created with a certain target segment in mind, because different segments have different needs. Therefore, an important consideration for any operator would naturally be to assess whether they are in tune with what their target customers really want. This is of course true for almost any business venture. In this regard Zeithaml, Parasuraman and Berry (as cited by Bicheno and Gopalan, 2000) have developed a well researched and tested methodology for identifying the dimensions of service quality. They have also identified causes of GAPs that exist between the service that customers expect and the perceived service that is received. There are 5 dimensions to service quality that have been identified:

* TANGIBLES - the appearance of physical facilities, equipment, personnel and information material.

* RELIABILITY - the ability to perform the service accurately and dependably.

* RESPONSIVENESS - the willingness to help customers and provide a prompt service.

* ASSURANCE - a combination of the following

* Competence - having the requisite skills and knowledge

* Courtesy - politeness, respect, consideration and friendliness of contact staff

* Credibility - trustworthiness, believability and honesty of staff

* Security - freedom from danger, risk or doubt.

* EMPATHY - a combination of the following:

* Access (physical and social) - approachability and ease of contact

* Communication - keeping customers informed in a language they understand and really listening to them

* Understanding the customer - making the effort to get to know customers and their specific needs

The above factors when put together are known as the SERVQUAL dimensions. Going a step further from these factors one can identify GAPS between service expectancy and perception. Prior research has shown customers create their perceptions of what to expect based on four factors (Schaaf. 1997) namely -

1. Word of mouth communication.

2. Personal needs.

3. Past experiences.

4. Communications put out by the service provider.

In this regard five major GAPs in service have been identified as follows.

* GAP 1: The difference between management perceptions of what customers' expectation and what customers really do expect

* GAP 2: The difference between management perceptions and service quality specifications - the standards gap

* GAP 3: The difference between service quality specifications and actual service delivery - are standards consistently met?

* GAP 4: The difference between service delivery and what is communicated externally - are promises made consistently being fulfilled?

* GAP 5: The difference between what customers expect of a service and what they actually receive

* Expectations are made up of past experience, word-ofmouth and needs/wants of customers

* Measurement is on the basis of two sets of statements in groups according to the five key service dimensions.

In other words these GAPs will exist because:

* GAP 1: Not knowing what customers expect

* GAP 2: The wrong service quality standards

* GAP 3: The service performance gap where what management wants is not being implemented

* GAP 4: When promises do not match actual delivery

* GAP 5: The difference between customer actual perception of the services and their prior expectation

An important objective of the current study is to explore GAP 1 on the SERVQUAL model to ascertain whether there are differences in what operators think are customers' expectations and what customers actually want.

The success or failure of a restaurant revolves around several variables and their interplay with each other. A restaurant begins with a concept and a potential market. All other components revolve around these two important considerations (Kastigris & Thomas, 1999). This is represented in Figure 2.

Many operators erroneously hold the intrinsic belief that merely having good food and service is everything that one needs to be successful. As far as the customer is concerned, there are many more factors that go into whether a restaurant experience is worthwhile or not. For example, factors like access, parking, visibility, pricing, credit cards accepted, traffic conditions, type of neighborhood and other such factors over which the management may not necessarily have control, will all go into defining the level of satisfaction of a restaurant experience. In order to ensure sustained success, operators need to understand the long-term impact of these variables. Exploring some of the significant variables is another objective of this study.

In addition to this a number of internal factors are also important to the over all success of the restaurant. Factors like supplier management, control of variable expenses, nature of fixed expenses, management attitude towards stakeholders, all have a significant impact on the success of a restaurant. In depth analysis of these variables is however currently beyond the scope of this paper, though some general findings have been included as the text progresses. (Appendix 1a - 1d).

The issue of comfort, ergonomics and atmosphere is also a tricky one. The level of physical comfort that one finds in restaurant will also vary from theme to theme. Customers will always want the maximum possible comfort, however from an operators perspective there are other issues, for example, Ritzer (2000), in his book, 'Mcdonaldization of Society' has suggested that McDonalds has designed its furniture for seating up to 25 minutes so as to ensure high turnover, this is true of many other Quick Service Restaurants.

The issue of physical comfort highlights the problem of segmentation in the concept development phase. A market segment is simply defined as a "buyer group with a common set of needs". This is especially hard in the restaurant industry where dining needs are fragmented into small groups with a large degree of individualism. This is why the restaurant industry is so heavily fragmented and segmented. This issue has been well stated by Swinyard and Struman (1986) -

"Because each customer group in an eating out market will want a different product, a restaurant cannot reach out to all customers with equal effectiveness. The restaurant must distinguish the easily accessible consumer groups from those that are hard to reach and the responsive segments from the unresponsive ones. To gain edge over its competition, a restaurant must examine market segments by identifying one or more sub sets of customers within the total market and concentrating its efforts on meeting their needs"

The complex issue of restaurant segmentation also leads to another complex problem of defining who the competition is ? Kotler, Bowens and Makens (2000), identify 4 levels of competition:

1. Product form competition: i.e similar products and services e.g McDonalds and Burger King.

2. Product category competition: i.e same class of products e.g McDonalds and KFC.

3. General competition: Suppliers of the same service e.g McDonalds and all other restaurants.

4. Budget competition: i.e competition for the same consumer Rupee or Dollar, e.g restaurant competing against grocery stores or convenience stores.

Many operators do not seem to consider competition outside the first level. This is erroneous and risky thinking on their part. Restaurants that consider other levels of competition seriously and incorporate this into their strategic outlook are more proactive rather than reactive in terms of understanding their customers' needs and wants. Such restaurants work hard to close perceptual GAPs, constantly innovate and are in the top 10% in terms of profitability in the industry and have the strongest positioning in customers mind.

Reich (1997), identifies 5 levels of positioning along a linear scale (refer Figure 3). Restaurants in level 1 are the market drivers who meet future demands proactively and are usually the trend setters. Restaurants in position 2 are slightly ahead of current demand patterns and are quite often restaurants that have been displaced from position 1. The restaurants at position 3 tend be more reactive to changing patterns in the market, whereas position 4 and 5 restaurants are usually those that have abandoned any form of innovation and are just moving along on momentum. These restaurants are usually at the bottom of the pile in profits. Restaurants that do not invest time and resources in understanding their customers needs gradually slip to position 4 or 5 and sooner or later face closure, when the service GAPs become far too wide and the momentum of positive cash flow turns negative. This factor alone underscores the tremendous need for research activities in India's Food and Beverage industry since innovation cannot be directed without adequate information.

Customers can also be segmented into three broad categories in terms of the Food and Beverage business (Jones, Newton and Dixon (1997):

1. Commercial Customers: Those who have complete freedom of choice.

2. Voluntary customers: Those who are part of restricted market but who have ultimate choice (e. g school canteens, college food courts, etc.)

3. Involuntary customers. Those who have no choice as in prisons and hospitals.

The scope of this research only covers commercial customers and their behavior. Consumer behavior in terms of restaurants is a complex affair. Operators need to understand the following principles as outlined by Chambers, Chacko and Lewis (1995):

1. Consumer behavior is purposeful and goal oriented.

2. The consumer has free choice.

3. Consumer behavior is process that needs to be understood.

4. Consumer behavior can be influenced.

5. There is a need for consumer education.

There are many ways in which academics have segmented consumer groups. For examples consumers can be segmented based on age and life cycle, occupation, economic condition, lifestyle, personality, self image, psychological factors and many more (Kotler et al, 2002). When restaurant concepts are designed, studying these consumer groups is a good approach to segmentation, which leads to targeting the right people with the right concept. This creates a number of complications in terms of analyzing perceptual GAPs since different consumer groups will have different expectations and ideas about what to expect from a restaurant. Restaurants attracting commercial consumers tend to get a diverse profile of consumers all of whom have different expectations that are constantly evolving. For the purpose of this study however, consumers have been segmented into four broad categories based on age and spending patterns and all consumers have been chosen from a common economic class of society as has been outlined in the section on research methodology below.

METHODOLOGY:

The study was conducted in two phases.

Phase 1

A survey questionnaire was designed containing 9 variables and 54 sub variables, each with a 5 point rating option on a Likert scale. Six out of nine of these variables reflected factors that would impact the customers and managements thinking alike (menu, location, décor & design, entertainment, service systems and publicity). The remaining three variables were taken to have only an internal impact on the management and did not affect the decision making for a customer directly.

A total of 60 restaurants participated in the study. Unfortunately some of the questionnaires had to be discarded owing to faulty completion and lack of understanding. Finally a total of 48 restaurants were able to provide feedback that fitted within the desired parameters of the study.

The questionnaires were taken to each restaurant personally by one of 10 members of the research team. This was done in order to ensure complete understanding of the questionnaire at hand.

Once all questionnaires were collected they were computed in the following categories.

* Restaurants at Gurgaon and Delhi.

* Restaurant with an Average per Cover (APC) below Rs. 250.

* Restaurant with an APC above Rs. 250.

* All restaurants combined.

There were other data groupings that can be considered for a more detailed analysis. However, these would be beyond the scope of the current paper.

Phase 2

This phase dealt with gathering and analysis of data from the sample customer base. A similar questionnaire was designed along the six aforementioned variables and customers were asked to rate the variables to asses the degree to which each variable impacts their decision to eat out as well the contribution to the over all dining experience.

The questionnaire had a part B', which asked consumers to rate the following factors on a scale of 1-5.

* No. of visits to restaurant per month.

* Average spend range per visit.

* Rating of most preferred cuisine among a choice of 10 cuisines most visible in the city.

These questionnaires had been divided into four segments i. e.

* 18 -25 year old customers.

* Customers above 25 years old.

* Customers spending less than Rs. 225 per visit.

* Customers spending above Rs 225 per visit.

This is the only grouping considered within the purview of this paper. However, the data gathered has a lot more potential for analysis that may be done at a later stage. Examples of other groupings that can be considered for further research are:

* Relationship between average spend and impact variables.

* Relationship between frequencies of dining out and impact variables.

* Relationships between age groups and average spend.

* Relationships between age groups and frequency of dining out.

The above analyses was required in order to make a complete and accurate GAP study between what managers and proprietors think their customers want from them and what they actually want.

In both questionnaires, all data was analyzed in percentage terms. This was done by totaling up all scores awarded for each variable which was then divided by the maximum total number of scores possible for that variable after factoring in any omissions. The minimum possible score is 20% and maximum a 100%. Once the percentage score was calculated for each variable, automatically the results for the data groups emerged as a comparison of these percentages.

FINDINGS OF STAGE 1:

Of the nine major variables the following is the total average score for each major variable for all restaurants combined. This rates the un-segmented overall attitude of restaurant operators as to which variable has the highest impact on the success of their restaurant.

As can be observed from the table 1, menu and service related factors were not rated as the highest. Differentiation and the operators choice of cuisine and concept is considered highly important due to the fast paced growth in restaurants that leave operators feeling a strong need to be competitive and to have the right sort of identity that will ensure long term popularity and appeal as well as clear voice.

Hygiene and sanitation consciousness also seems to have finally caught up with operators. This is probably in response to consumer demands and a need to be competitive.

The most significant factor in terms of décor and design was the comfort and over all ergonomics of the establishment. This includes factors like temperature, ventilation, seating comfort and personal space. Supplier quality consistency was the most important factor relating to suppliers, which includes dry foods, meats, vegetables, seafood, stationery, annual maintenance, contract labor, security services and others.

The most significant cost factor was food cost, which typically ranges anything from 25% to 40% of sales depending on the nature of the operation. Speciality restaurants tend to have higher food costs due to the need for specialized ingredients. Real estate expenses like rental and mortgage were not significantly rated for restaurants overall cost factor (60%). There was a huge difference for restaurants in Gurgaon which rated this at an important cost factor (80%). This is probably because most restaurants were new and were still paying a large chunk of money towards real estate.

As far as employees are concerned, the most important fact was their motivation level, which in many ways is interrelated with other variables like benefits, gratuity, etc. For operators in Gurgaon, the picture is a little different as discussed later.

The most significant location variable was rated as competition. This had higher scores than access, parking and visibility. The most important entertainment variable is music.

Word of mouth was also considered the most important publicity variable. The results vary to an extent for more expensive restaurants as will be seen below.

Restaurants with an APC of below Rs. 250

It must be noted here that even though service systems were ranked below décor and design overall, yet service speed was still ranked very high as an independent variable along with hygiene and service accuracy.

Additionally, portion sizes were ranked the highest under menu factors. This suggests that proprietors feel their clients are more value conscious and look for value on the plate.

The importance of supplier's quality consistency was of course directly related to the provision of a good menu and also reflected an industry wide problem of finding good reliable suppliers. The higher rating seen in Table 2 reflects on this factor. In this sector, volumes and higher turnover matters more.

Employee motivation levels were also the most significant employee related factor along with the turnover, which seems to be higher in the lower priced restaurants.

Food cost was the biggest cost factor for operators in this segment as well, and music was rated the most significant form of entertainment.

Visibility and competition were rated the most significant locational factors with parking getting a lower rating among other segments. The significant form of publicity for them was word of mouth over anything else.

The higher end restaurants exhibited slightly varied results. Proprietors' soft skills related with service; especially factors like courteousness, hygiene, accuracy and speed were more important than others. Publicity was also more important, with media relations being on top. This would seem logical as the higher end restaurants tend to be reviewed and written about more often. Word of mouth was also ranked almost as high. Promotions and festivals were also seen as important factors especially at the launch and post launch phases, which was the time frame when operators felt they could make their biggest killing.

The number of back ups for suppliers was also relatively ranked high and this could be due to higher end restaurants requiring special ingredients for some preparations which were often not easy to source. The relative importance of access and parking was also important because of a generally larger amount of time spent dining in these establishments as well as a higher number of customers coming in cars rather than two wheelers, which are easier to park.

Uniqueness of design and décor has also been ranked high. This would be due to customers seeking more value in other areas especially when spending more money on a meal experience. The increased importance given to benefits and payroll expenses could be related to a need for better trained English speaking and generally more qualified staff that would naturally demand more money as well as basic employee benefits.

RESTAURANTS IN GURGAON AREA

Gurgaon is a relatively new town ship that has come up in the last decade or so and it is really in the past two years that Gurgaon has started to boom economically as not only an industrial and corporate township but a preferred residential option. Most of the restaurants here are fairly new and only a sample base of nine restaurants could be analyzed for the purpose of this study. The results are enumerated in Table 4.

As can be seen from the above data table, Gurgaon based restaurant proprietors value their service systems above anything else, though some variables under menu are also ranked equally high like cuisine, variety, portion sizes and price range, all getting ranked above 80%. These restaurants were also extremely hygiene conscious, significantly more than their rivals in Delhi.

Operators in Gurgaon also valued publicity especially word of mouth. This is probably since a large number of restaurants have come up in a very short span of time and there is a need to be perceived as a voice amidst the noise.

Consumers have suddenly been presented with a vast choice hence proprietors feel concerned about shorter life cycles and feel the need for differentiation as can be seen in the high ranking obtained for "uniqueness".

Supplier quality consistency is also seen as very important. This is probably underlining a problem of inadequate suppliers in the region for all cuisine types. Employee training and personality also scored high which went hand in hand with the average operator's heavy service orientation. Real estate costs were also seen to be more significant here for reasons stated previously.

Significantly though, under locational factors "access" and "visibility" seemed to rank higher than competition. This was possibly because many of the restaurants have come up as tertiary businesses within bigger businesses like shopping malls, plazas and arcades thus creating obvious difficulties in access as well as dilution of visibility.

FINDINGS OF STAGE 2

As mentioned in the section under "methodology", a separate questionnaire was designed incorporating some of the key variables of the study in stage one. The objective was to measure how a sample customer base of 65 customers rated the same variables. This was done in order to understand to an extent where the major perceptual and expectation GAPs in service lay. The following tables outline the significant GAPs.

These tables only highlight those variables for which significant GAPs were observed. The remaining variables were given a very similar ratings showing that in their own chaotic way, restaurant operators in Delhi and Gurgaon are fairly well clued about the psychology of their customers.

Within the table below, negative variances are defined as those where customers rate a given variable higher or as more important to their decision making process than the operator does. A positive variance is where the operators attribute a higher score than the average customer to a given variable. This is merely a means of categorizing the variances observed.

From the table 5, one can clearly see that there are 8 over all significant GAP areas between what managers think are important for attracting customers and what customers think are important for a restaurant to have in order to receive their patronage. One can see that customers see access and parking conveniences as a significantly higher factor in their overall experience than what operators think. The quality and profile of the neighborhood as well as visibility of the restaurant also impacted customer choice more than operators think.

As far as décor and design is concerned, customers consider physical comfort their no.1 factor. This includes factors like seating, space, temperatures, ventilation. While operators also gave comfort the highest rating within its category, yet the over all importance attributed to this variable was significantly lower. This suggests that operators need to focus more on providing the basic comforts before providing the extra frills and fancies. It is interesting to note that fast food outlets like McDonalds have unwritten policies requiring their furniture not to be too comfortable so as to promote seat turnover (every 25 minutes).

Service flexibility is another GAP area. It seems the average Delhi customer has a penchant for ordering off the menu, asking for dishes to be prepared according to personal tastes and asking for services normally not within the practice of the establishment. This is one area where operators seem to be constantly left behind. They cannot seem to be flexible enough for the customer. The high importance attributed to this factor by customers just goes to show that operators will need to find ways of being more adaptive and flexible to individual customer needs. This could perhaps be the reason why there has been a rise in the number of restaurants offering "prepare your meal" concept in one form or another. There is however a limit to which operators can stretch themselves to accommodate every customer's individual need.

Hygiene and upkeep is another GAP area. Operators have rated hygiene and upkeep as one of the most important service variables but customers attribute more importance to this variable and it will increasingly evolve further into a competitive factor. Restaurants that do not conform to basic hygiene standards will probably not exist for very long owing to the increased importance this variable is getting.

Lastly, Internet as medium is yet to catch on significantly in the restaurant business. Most related web sites are mere information providers, with some providing booking facilities at a stretch. However, there is a significant GAP between the level of importance given to this medium by customers and operators, suggesting that customers would like to see a more Internet activity and presence by the restaurant industry.

This is an indication of a potential opportunity for operators to capitalize on especially with the increasing level of interface between people and Internet technology. The potential of websites as marketing, and PR are convenience tool for restaurants and would make an interesting area for detailed study in the near future.

As can be seen from the above tables when the data samples were segregated into categories based on APC, some significant differences were observed. Table 6 shows a comparison of data gathered from restaurant operators for outlets with an APC below Rs. 250 and customers with a similar average spend. A total of 32 variables were analyzed and a significant GAP was found in 9 of these variables as shown in table 6. Access and parking conveniences again had a higher impact on a restaurant experience and hence the decision to eat in particular restaurant. This merely reinforces the fact that to operate a successful restaurant, more stress needs to be placed on these two variables by the operators as it could result in a significant change in business. This factor does however get a little diluted in restaurants and bars within the newer malls as the foot falls in the malls are there for other reasons apart from the consumption of food in the restaurants. The fight for parking in the already crowded malls can however adversely affect the decision of a customer to enter the mall at peak time simply to eat and do nothing else. Further research here could also explore the behavior changes of mall goers once the novelty value of these malls is diminished and Delhi-ites get used to seeing more and more malls coming up around them.

Portion size as a variable emerges with a positive GAP i. e operators give it a higher rating than customers do. This simply means that portion sizes in cheaper restaurants is not as important to customers as operators think they are. This does not mean that they are not important. It is just that customers on an average seek more variety of choice as a more significant decision making variable over portion sizes.

The physical comfort factor is again another GAP area. The GAP in less expensive restaurant is higher probably because lower APC restaurants tend to stress more on volumes and hence do not overly stress on dining comfort. There is room here for further research though.

In terms of service, significant GAPs were observed in importance attributed to service flexibility and efficiency. The GAP in flexibility is higher than overall average almost certainly because lower APC restaurants tend to focus more on volumes, have larger menus and are thus less able to provide individualized service. Service efficiency also gets a higher value rating from customers probably because of the less time spent in the dining experience. Factors like speed, promptness, eye contact, professionalism, and accuracy which are all related to efficiency become more important. This is also affected by the fact that a lot of times these dining experiences are in the form of "working day" lunches, where APC's tend to be lower and time limits are high. There is room for more specific research in this field as well.

Operators of such restaurants tend to focus their training more on following standard operating procedures and systems basically aimed at handling volumes. This could account for the lesser degree of importance given by operators towards being courteous to their guests. This may explain the GAP observed in the relative importance attributed to courteousness. Operators however can gain a lot from introducing "soft skills" training as part of their staff training (e. g dealing with irate customers, how to say no, standard phraseology, etc.) This form of training can even be taken a step further and can lead to better communication skills resulting in the imbibing of concepts such as "up selling" and "suggestive selling" that have been proven to enhance revenue.

Lastly, as one can observe from table 6, there is a high negative GAP in the degree of importance attributed to hygiene and sanitation. It must be said that the overall level of hygiene and sanitation consciousness is quite high for operators but customers still seem to attribute more importance to it than operators. Operators still rank variables like "service speed" over "hygiene and upkeep". However in terms of service related variables, this is the number one concern for customers. Operators are well advised to make hygiene and sanitation a priority as it may represent a strong selling point, as it has for Haldiram an outstanding example of a restaurant concept that has capitalized on this GAP.

A comparison of restaurant and customers with a higher average spend as seen table 7 shows access and parking again as variables with a high negative GAP. Most customers to these establishments would be users of larger automobiles. This would go part of the way in explaining the higher importance these customers feel in terms of adequate and safe parking as well as comfortable access. Parking in general seems to be in short supply all over the NCR. Establishments hoping to be successful in the long run will be more dependant than they like on these two variables for the foreseeable future.

Related factors like visibility and neighborhood were also rated as high GAP areas, especially the impact of the neighborhood. Customers in this segment are far more sensitive to the immediate vicinity of a restaurant than operators think they are. This includes factors relating to class consciousness, access to the neighborhood, traffic conditions, noise pollution, safety and security as well as other leisure activities that may be available and hence easily combined with a dining experience (e. g. proximity to movie halls, discos, etc).

Another GAP observed has been in the degree of importance given to the modes of payment accepted i. e factors like, credit cards accepted, debit cards, range of cards accepted, is it cash only, etc. Here operators seem to stress more on these factors than customers actually do. Customers with higher average spends are increasingly using plastic as means of payment and the higher importance given by restaurant operators is probably preemptive in nature and therefore a healthy sign.

Service flexibility and courteousness were also noted as high negative GAP areas, especially flexibility. It must be noted here that quality dining experiences en masse' is relatively new in Delhi and is still in its infancy. In relative terms (i. e in terms of purchasing parity) dining out is more expensive in the capital than it is in many developed countries around the world. Though there is no available research establishing a positive link between high proportion of Rupee spend in eating out and the level of flexibility demanded by such customers, one could infer that the relative novelty value of a fine dining experience and the relative "newness "of many cuisines to the Indian palate could be factors contributing to the higher degree of service flexibility that high spending customers expect. This disequilibrium should balance out once the F&B industry matures further and customers become more "educated" on different dining concepts. Operators on the other hand will try to narrow the GAP by coming up with concepts that allow more freedom of choice and personalization to customers, hence the rise of concepts that start with phrases like "make your own" or "cook your own", etc. This may also account for the seeming popularity of buffet dining as a concept, since buffets by nature allow a greater degree of flexibility on all fronts.

The GAP in courteousness also points to a need for operators to focus more on "soft skill" training and people handling skills, specifically for the more expensive restaurants where these attributes are highly expected in the service personnel.

Some surprising GAP in the higher spending segment relate to the way customers and operators view mediums of publicity (Figure 7). Take for example the variable, "word of mouth". Customers still rate written critiques as a stronger impact variable than word of mouth as a factor. This is true for higher end restaurants only. Operators thus need to see the PR opportunity of calling food writers and having them write about the establishment periodically. Promotions and print adverts also do not seem to have a high impact on the success of a restaurant as operators believe they do. This could be because of a certain level of desensitizing to the large number of promotions and print ads that consumers are increasingly being subjected to.

No doubt they are important variables but research shows that there is nothing like a good write up in a well read newspaper or magazine column.

CONSUMER CUISINE PREFERENCES

As part of the data gathering process, sample customer base was asked to rate their cuisine preferences. Ten cuisines were chosen and customers were asked to rate their preferred choice of dining out on a scale of 1-5 with a rating of

1 = Never

2 = Rarely

3 = Occasionally

4 = Mostly

5 = Always

The cuisine getting the highest total points would represent the most preferred cuisine choice and vice versa. This was later converted into a percentage of the maximum possible points possible. The lowest possible percentage is 20% (i.e 1 out of 5) and the highest possible is of course 100% (i.e 5 out of 5). This analysis was done after sorting the sample data into 4 segments as follows.

* 18 -25 age group.

* Above 25 age group.

* Average spend less than Rs. 225.

* Average spend more than Rs. 225.

The following graphs show the results.

As can be easily observed in the tables provided, North Indian, and multi cuisines are still the number one preference for the mature consumers. Thai, Lebanese and last of all Japanese cuisines have still not gained much popularity. This could be for a number reasons namely:

* Lower number of outlets catering to these cuisines.

* Higher price tag often associated with some of these cuisines.

* Relative incompatibility with the Indian palate.

One can see that pizzas and fast foods are universally popular with the masses, which shows that the palate of the average customer is fairly experimental at least in some directions.

The younger age group thinks quite differently. This group rates multi cuisine concepts, pizza, fast food and north Indian as their mainstay, which goes to show their higher degree of experimentation and westernization. Chinese is a fairly popular option and has been around as a cuisine in Delhi for arguably the longest. Thai, Lebanese and Japanese are still relatively infrequent options.

One also observes that Chinese and Italian cuisines are more popular among the younger generation though South Indian food is more popular among the older consumers. Thai food as well is more attractive to the older consumers, probably because it is essentially a fine dining concept like Japanese in Delhi.

In terms of average spend, the lower spenders again follow a similar pattern with multi cuisine being the most popular option followed closely by north Indian, pizzas and American fast food. Thai, Lebanese and Japanese fall at the bottom in that order once again.

Significant differences are observed among the higher spenders. North Indian is in the top spot followed surprisingly close by Pizza Hut. Most of the good pizza is expensive and expensive providers like Pizza Hut have spent crores in advertisements and product development.

American fast food still features high which shows that the novelty value and relative positioning of this cuisine is still in the upper spectrum of the market. This is in contrast to the more mature western markets where fast food is seen as a lower end convenience product.

Multi cuisine dining is still ranked high but is in 5th place. Chinese and Italian cuisines are popular as well relative to their rankings in the other segments. South Indian cuisine, which in Delhi is still largely perceived in very limited terms (dosas, idlis, sambhar and that's about it) ranks lower among the higher spenders in popularity. Thai cuisine is nearly ten points higher in popularity in this segment and has been helped by the fact that some of the most lavish restaurants in Delhi are Thai restaurants or at least have Thai cuisine as part of the over all offering. Lebanese and Japanese are still to make their mark on Delhi's palate. This will probably happen in due course when consumers see Japanese cuisine coming out of the confines of five star hotels and when Lebanese food providers come in larger numbers and serve more than a mere 6 inch wrap with a quarter pickled carrot.

RECOMMENDATIONS AND CONCLUSIONS

The empirical observations made through the process of this research highlight some interesting facts. Despite the fact that comparatively little industry research takes place, the average operator is fairly aware of their customers' current demands. Of the 32 variables analyzed for the GAP study, significant GAPs were observed in only 8 -10 variables in each category. This highlights the value of intuition and gut feeling that operators do acquire through sheer experience and verbal interactions with customer bases. However based on the GAPs that do exist one can make the following general and specific recommendations for restaurant operators in the Delhi / Gurgaon area.

* Widen understanding of competition: Operators need to realize that there is a lot more to competition than simply those operators who provide your product at a similar price. When a consumer makes a choice to go out and eat, the chosen cuisine and concept is no doubt an important factor but there are many other variables that come into play. To simply base your competitive thinking against two or three chosen primary competitors and not look at the other three levels of competition as outlined in the the write-up will be a serious mistake in the long run. Operators also need to place more emphasis on gathering competitive intelligence. Use of consultants can be very helpful here.

* Talk to your customers: In order to minimize GAPs, operators need to come closer to their customers not just to figure out what is being done right or wrong in the present but also to anticipate future demands. Restaurant questionnaires that one sees, tend to provide a very limited picture. It is important to periodically conduct detailed studies on your customers through focus groups, detailed surveys, customer trail mapping and other such techniques. These activities are imperative for any restaurant not wishing to slip below position 1 or 2 on the linear positioning scale mentioned in the write-up. The use of professional consultants is highly recommended here when it comes to designing research methodologies.

* Keep a Tab on your environment: Equally important for operators is to keep a tab on the remote environment or in other words the PEST environment (Political, Economic, Sociological and Technological). This can be done through reading relevant industry publications, reading economic reports, trade magazines and journals. This will ensure that one is always abreast with current and potentially future trends as well as potential opportunities and threats.

* Document Standard operating procedure (SOP): The provision of quality service boils down to setting yourself the right standards and then conforming to these standards (Hall, 1990). Standards that you set yourself are like a promise that you make to your guests. This "promise" should ideally be based on the depth of knowledge that you have about your guests needs. Hence the importance of having a detailed and dynamic feedback system. These "promises" need to be documented in the form of standard operating procedures and incorporated into the restaurants training program rigorously. Following such a structure will help minimize GAPs 2, 3 and 4 as detailed earlier in the study.

* Stress more on Courtesy: Research has shown that customers in Delhi place a high value on courteousness, which operators do not fully realize. It is thus recommended that operators incorporate this within their training programs in the form of soft skill training. Examples of issues to cover are:

- Standard phraseology.

- Telephone handling skills.

- Handling the Irate customer.

- Pre-emptive service.

* Do not dilute your concept: Concept and cuisine related variables are important in the decision making process for a customer. It is recommended that once a theme or concept is chosen for a restaurant, then operators must adhere to the theme without allowing dilution to creep in. For instance a "Lounge concept" must play lounge music and not loud Indi - pop. This is important for long term positioning though further research as to the specifics of Indian consumer behavior in this regard would shed more light here.

* Food critics and write ups are more important than you think: While positive word of mouth is important for all restaurants, the opinion of food writers, critics and industry experts has a greater impact on the thinking of customers when it comes to higher spend restaurants. This can be converted into an opportunity by periodically having the restaurant covered and written about. Hence good press relations are important and beneficial in the long run.

* Focus on design basics: Customers want comfortable seating, adequate personal space, low noise levels, clean toilets, good ventilation and air-conditioning rather than snazzy wall paper, fancy lights and weird uniforms. Unless you want people to leave soon, get the basics right first.

* Hygiene and upkeep: Customers are more hygiene conscious now than operators think, while many may not voice their concerns if things are just about right, yet this research shows that operators who set and maintain above average hygiene standards will gain the proverbial "brownie points" from their customer base and will find themselves gaining additional selling points.

* Flexibility: The tremendous value that customers seem to place on flexibility should inspire operators to design concepts and systems that allow for a measure of flexibility within the confines of their chosen concept and themes of course. Operators therefore must incorporate the need to be flexible in their thinking. This may require some creative thinking during the facility design phase of a project.

* Access and parking: Operators must not neglect the long-term impact of parking and access to their facilities as it does have an impact on repeat clientele. Restaurants that do everything right are liable to fail simply because of poor access and related factors.

* Web sites: Additional research needs to be done on optimizing the use of websites to better market restaurants in the region. Operators targeting the youth especially should start thinking of how the internet can be better used to enhance revenues as this research does identify a GAP between importance that operators attribute to the internet as an impact variable and the level of importance accorded by customers.

* Careful of over innovating: Despite the great boom in the restaurant, operators must understand that the Food and Beverage Industry is just coming out of its infancy in Delhi. The average palate here is still conservative as can be seen in the study on cuisine preferences. N. Indian and Multi cuisine (usually a combo of Indian, Chinese and snacks) concepts are still in the top slot. Buffets offering the whole plethora with flexibility will therefore still be very popular. This is not about to change over night. Western concepts mainly in the (Quick service restaurants) QSR categories are the only ones that have made significant in roads on Delhi's palate apart from Chinese food of course. Other cuisines are still perceived as expensive and for occasional indulgence (apart from south Indian) by and large. This should not discourage investors but operators wishing to venture into exotic cuisines must do their homework first.

LIMITATIONS OF THE STUDY

* Geographical restriction covering only the Delhi/Gurgaon area (urban) and therefore cannot be taken in the national context.

* The study does not factor in for differences that may arise between meal period and specific attribute importance.

* The customer sample base does not reflect all segments of the population base. The survey was restricted to middle class and lower upper class segments and their dining habits.

* The restaurants chosen for the study also predominantly cater to the aforementioned society segments.

* The second stage of the study does not necessarily measure the positivity or negativity for some of the variables (e. g music, television, live entertainment) i. e the customers are able to rate it as a high impact or low impact variable but cannot rate whether it has a high positive or high negative impact. For example a customer who rates music as high impact could either mean that he /she likes a lot of music or conversely prefers a complete absence of music. This factor only impacts a small number of the variables, namely: music, television, showmanship and live entertainment.

* The analysis of cuisine preference does not factor in for the frequency with which each individual customer dines out. Some preliminary data to this effect has been gathered as part of the process but will be incorporated in future research papers to come.

[Reference]

REFERENCES

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[Author Affiliation]

Karnikeya Budhwar is Personal Finance Manager with GE capital at Melbourne, Australia. E-mail: karnikeya@rocketmail.com.

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