Introduction Food is particularly important in our everyday lives. Singapore’s Food and Beverage (F&B) Industry contributed 3. 5% to the country’s GDP (Emerging Markets Direct, 2011). In order to satisfy this craving for food, people would either cook their own food or head down to food establishments and restaurants would be an example of such an establishment. A restaurant, by a report from V. M Patel Institute of Management (2006) is defined as “an establishment that serves prepared food and beverages to be consumed on the premises. Restaurants are aplenty all over the world, with streets being dedicated just for them. Competition within the restaurant industry is high, with restaurants like Elbulli, a Michelin 3-star eatery becoming so well sought after such that one has to book 3 months in advance to dine in. On the far end of the scale, although Manpuku, a restaurant dedicated to serving Japanese cuisine, was the talk of the town when it first opened in 2009, it still had to throw in the towel in early 2012.
With such high competition, it is not easy to sustain in this throat-cutting industry. What are the factors then that Elbulli possess allowing it to operate so successfully? Hence this report aims to investigate the “ingredients” of a good restaurant whereby what are the factors that allows it to be successful. Within the term restaurants itself, there are many different types of restaurant operations and service such as Fast Food Restaurants whereby food is supplied quickly after ordering and by minimal service (V. M Patel Institute of Management, 2006).
The perspective of Full Service Restaurants, a sit down eatery where food is served directly to the customers’ table (Franchise Direct, 2009), will be adopted in the context of this study. 1. 2 Literature Review Several studies have been done to investigate to the success factors of a restaurant. An article by Dennis McCurley (2011) suggested that the main factor of success for a restaurant is revolved around ownership rather than visitor-ship. Some key detailed factors pointed out by him were quality of food, food service, beverage service, alcohol variety. Similarly, Geoff Wilson (n. ) gave a list of 20 factors of a successful restaurant and factors such as quality food and quality service coincides with the factors listed by Dennis McCurley (2011). However, Geoff Wilson (n. d) also introduced a few other crucial success factors such as location, differentiated brand image, experience, customer feedback and to always have a winning and positive attitude. 1. 2. 1 Restaurant Concept One ingredient of a good restaurant as mentioned by many of the authors reviewed, including Bill Ryan and Michael Krisler (2003), would be the restaurant concept.
This is especially so as this is the first and main factor restaurant owners should thoroughly consider before starting up a restaurant. A restaurant concept is determined by elements such as ‘decor, lighting, menu, food preparation and presentation, service, price, location, and size’ (Bill Ryan and Michael Krisler, 2003). Strategies such as Porter’s Five Forces and SWOT analysis are several ways to analyse the market to decide on a concept. After deciding on the concept, restaurant owners should lay out their mission and vision and goals such that they have an idea what they should be working towards.
Katastar (2010) defines “A vision describes a view of the perfect situation that might eventually be achieved “in an ideal world” whereas the mission more describes the day-to-day activities and processes needed to achieve the vision” 1. 2. 2 Food This factor, largely affected by external environment, was mentioned by Spyridon Mamalis (2009) as the second most crucial ingredient in a good restaurant. Within this factor in his research, respondents felt that quality of food was more important than the taste of food.
Hence when one is establishing the restaurant concept, one should conduct market research on “customer expectations and perceptions concerning Food Quality and Taste” (Spyridon Mamalis, 2009). After obtaining the food preferences of customers, restaurant owners are then able to tweak their offerings so as to cater to the tastes of customers. 1. 2. 3 Management of Restaurant A research done up by Keith H. Mandabach, Mohammad Ashar Sddiqui, Gregory F. Blanch and Dawn M. Vanleeuwen (2011) showed that the management of a estaurant makes up one of the highest percentage concerning the internal environment success factor of a restaurant. This affects the success of a restaurant as owners will have to firstly manage themselves internally before they can tackle the external environments. Some crucial internal issues to manage are policies and procedures. Having a well-balanced policy involving both the employees and customers would provide the best reaps for the restaurant. Standard operating procedures are put in place in order for processes to be organized and to ensure that there are no disputes.
Policies towards the staff are crucial in boosting their morale and this will allow them to develop a passion for their work which ultimately improves their delivery of service towards the customers. Lin Grensing-Pophal (2010) said that employees with high morale are better than low morale. He also suggested ways to boost employee morale such as listening to what they have to say and providing them opportunities for personal growth. 1. 2. 4 Target Market Another success factor would be the market targeted by the restaurant.
Identifying the precise market to be targeted is crucial since marketing efforts are drawn up differently for the various market segments. David H. Bangs (1996) suggested that owners could look up on national lifestyle trends to better understand the type of food that would best attract a certain age group. Owners could also segment their market via demographic trends such as age group, income etc. 1. 2. 5 Marketing After successfully identifying one’s target market, restaurant owners should set aside some funds for marketing. Marketing as defined by David H. Bangs (1996) “is the process of creating and retaining customers”.
An effective marketing strategy will be able to successfully appeal to the targeted market. The process of marketing can be drawn up via a marketing mix which comprises of four marketing tools mainly: Product, Price, Promotion and Place (Business Case Studies, n. d). An example of a powerful marketing platform suggested by Michael A. Stelzner (2012) would be Social Media under Promotions. This is one of the most effective marketing platforms as 85% of the businesses he surveyed that uses social media platform for marketing responded with an increased exposure.
This is resulted from the high usage of social media especially from the youths. 1. 2. 6 Location Even if a restaurant is able to present its restaurant concept to customers, they must be able to easily locate the eatery. As mentioned by David H. Bangs (1996), one should not open a restaurant at a location only due to the low rental price as it usually reflects the low demand for that area. Furthermore, once a shop space has been rented, there is not much one can do if the traffic flow is bad. Hence, the location of one’s restaurant should be carefully thought through as it contributes greatly to the success of the restaurant 1. . 7 Price Price also makes up one of the key reasons of success as stated by Bill Ryan and Michael Krisler (2003). Prices of dishes should not be too high such that it deters customers from dining. However, it cannot be priced too low such that it cannot even cover the fixed costs of the restaurant. In order to select the best price level, dukesdinbusiness. com (2013) recommends restaurant owners to adopt the “6 Major Steps to Setting Prices”. Nevertheless, prices of dishes should fluctuate during different scenarios e. g. lunch-time set meal promotions if there is a lack of customers during lunch-time.
All in all, the price of food in the restaurant ought to be value for money in which one is paying a reasonable price for the quality of food received. 1. 3 Action Plan After analysing the various literature reviews, the team would like to use the results of the study for projects relating to the F&B industry. However since the research from the literature reviews are largely done overseas and from customers’ point of view, the team may have to conduct another research using the above listed ingredients of a good restaurant to obtain locals response so as to ensure accuracy of the project.
If the team is intending to do so, the team will tackle this scenario by conducting a survey questionnaire. This questionnaire which will be distributed all over Singapore aims to identify what Singaporean customers feel are the factors that influence their decision making to dine at a particular restaurant. The team will also be conduct a focus group with owners of established restaurants that have been in the industry for more than 10 years to obtain reasons and methods to be sustainable in such a competitive industry. This will better allow the team to gain answers from both the owner’s and customers’ perspective.