A primary marketing objective of all competitors in the restaurant industry, after being hit by recession, is to retain their existing customers and sustain a meaningful competitive advantage that will help ensure the satisfaction and loyalty of those customers. Thus, a restaurant’s financial success depends heavily on its ability to achieve and sustain a lower delivery cost or some Unique Selling Preposition (USP) or customer service superiority.
To survive and keep a successful and strong position in the still reviving market, restaurants should address the following concerns:
- High price point: This is one of the biggest weaknesses of the Fine dining segment. It is also a starting point to analyse and offer an alternative in order to stay competitive. A restaurant can create distinctive pre-fix menu that attracts the customers and strengthens the brand loyalty. Your company has to be careful with the costs of food and service while offering the lower price for the same quality.
- High operations costs: High-end segment of the restaurant industry requires more money and dedication in terms of running the operations and keeping the service and food quality consistent. This would require more qualified management team, valet service and a highly qualified kitchen staff.
- Increasing price of supplies: Prices of essential supplies increased by 12% in 2012 and drove up the overall cost of food. In such a scenario, your restaurant should actively pursue and set price arrangements for certain amount of supplies used in restaurant operations.
- Impossible or troubled compliance with company’s policies and regulations internationally: For international expansion, it is one of the major points to pay attention to because it is a struggle keeping the brand name, staying true to the traditions and maintaining the same quality of the product.
- Government policies and regulations: Regulations in safe food handlings as well as requirements of ingredients disclosure can affect the costs of operating and consequently the bottom line.
- Maintaining the momentum: Restaurants need to work really hard to keep the buzz around them alive. They need to work on increasing the brand name awareness and attracting new demographics through new advertising campaigns, new offerings on the menu or design updates.
- Franchise system: One of the company’s strategies should be to expand and develop the relationship with new and existing franchisees in order to grow business.
- Profitability improvement: There are several ways of driving the sales up and keeping the expenses under control – creating and promoting sustainable awareness, leveraging the seasonality of the food and pre-fixe menu (allows balancing the price point) and focussing on the social media and design new marketing strategies to attract more people.