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. …

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