If given the opportunity to open a restaurant, it would be an upscale restaurant catering people who the desire to have excellent food and a premium dining experience. I would name this establishment Smalls’ Premium Steakhouse. My name inspires the name of the restaurant and, of course; we would specialize in all sorts of steak from filet mignon to steak burgers. My focus would be on serving premium foods at premium prices. Our differentiation factor would be the quality of our unique service.
We would redesign the layout, so it is conducive to an upscale dining environment. It will have plenty of space between tables for the privacy of our guests and lots of walking room in the aisles and between tables. Our menu would consist of a ‘design-your-own’ section for the diet-conscious guest. This section will challenge the customers to customize their meals based on what they like. For instance, guest could order a meal focused on their diet specifications such as protein and simple carb. They would not pay the price of a full meal, but we would rate the value received for the market ifferentiation of this practice.
In order to prevent lags in service time and loss of value, this section would be limited to foods in the restaurant. We are adding an eighteen percent gratuity to the bill for convenience of processing. The gratuity ensures our employees are consistent with their customer’s service and does not attempt to preempt services based on a perception customer who may not tip well. In addition, the guest do not have to worry about spending additional money on their meal and the staff can rest at night knowing they will be able to provide better for their families.
Value Statement and Creating Value A value proposition clearly and concisely describes the unique value of a companys products and services. The value created by my restaurant will come from the quality of food, the experience of dining in an upscale environment, and the feeling of having the staff cater to you. It is our core objectives, which will set us apart from our competition (Basu, 2014). Our value statement is, ‘real food, real chefs, and five-star servic‚. Every person cooking for us will have graduated from an approved cooking institution.
Chefs will be graduates of a recognized cooking university. The chefs will be responsible for their section of the kitchen. They will hire and train all staff employed for their part of the kitchen. This type of leadership ensures that the quality will be excellent that comes from each section of the kitchen from the salads to the proteins, with the Chefs taking ownership of their sections successes and mistakes. We will establish ourselves in the industry as a leader in customer service. Upon arrival, a floor manager will take their coats and find out what type of seating they would prefer.
Once seated, they will meet their server who would only have one other table. Keeping the quality consistent without stretching our servers too thinly and compromising quality is another part of our value communication. The guest would receive a complimentary glass of wine at their table of their choice and order their food. I believe that the customer service that We will provide will differentiate us from not only premium steakhouses, but also from other restaurants. Other amenities will be live jazz bands playing soft and soulful music at certain times during the week.
Pricing Strategy The first strategy is going to be to establish Smalls’ Steakhouse as a premium estaurant with our pricing and service. Our goal is not be the most expensive, however we will strive to be at the top of reference pricing for the local industry. The cost will be commensurate with the value received from the dining experience. Value pricing will ensure we are operating a profitable restaurant and creating fair value for our customers. Price setting will involve the cost of food, labor, how our direct competition is pricing, and what our guest are willing to pay.
Thus, our target market needs to reflect this willingness to pay (Kooser, 2014). We want our patrons to perceive the prices s an indicator of the value they will receive. The customer service and amenities are part of our value pricing as well. Next step in my strategy is to create a price structure. We will have the typical items that you can purchase from the menu in the form of price per meal, or the patron can build their meal and pay a-la-cart. The object of this pricing is putting the control into the customer’s hands.
They can pay for whatever they feel offers them the most value. For instance, it reduces waste and will save the consumer money to order a vegetable with their steak and leave off the potato. This price tructure will resonant well across our healthy consumption segments. Ultimately, the success of our pricing strategy will depend on our customer’s willingness to pay for the perceived value (Nagle, Hogan, & Zale, 2011). Lastly, is to offer very little in the form Of discounts with the exception Of marketing items to repeat customers.
Sending a ten percent off coupon to a patron that has not visited the restaurant in a period is a way of getting them back into the restaurant without comprom ising much in the way of value. A separate part of our price strategy would be a loyalty program that we would track and e able to more effectively market to the customer, The server would use a hand-held kiosk that would have all the guests past visits and items ordered. With this information at their fingertips, the servers can also offer rewards based on these visits and up-sale items at the table.
For instance, Some guest may purchase a snack after or wine after their meal. If the server has this information, he or she could offer it to them if they have not already asked for it. It would increase the value ofthe server and add incremental revenue for the restaurant. Value Communication Customers usually do not know what value they are receiving from a roduct or service. When they lack experience in a service or product, then it is more likely that the value of the differentiation will be unrecognized. Thus, my value communication strategy has to inform them of the value they will receive.
For this reason, it is imperative that we show the value received to the customer. If the guests do not see our value offering, they may perceive our price as unfair, which lead to less revenue. Our objective in value communication is to raise their awareness of the value received and their willingness to pay it (Smith, Hogan, & Nagle, n. d. ). Building the brand of the estaurant is going to be our first step in communicating this value. We want the premium nametag attached to our name labeled as a superb value.
To do this we will have to maintain consistent and above average customer service, that differentiates us from others. Secondly, the rewards programs we will offer at the table will let our customers know that we appreciate their business by offering them benefits for being our repeat customer with the help of an established visitor metric. The differentiation that distinguishes what we offer is what will drive value perceptions. The price for the offering is ow we can influence how customers understand it. The tactics used to control them depends on two things.
They depend on the relative cost of search for the differentiating attributes, and the type of benefits sought: economic or psychological (Smith, Hogan, & Nagle, n. d. ). We will lower search cost by establishing the brand in the community because as the relative cost of search decreases, product awareness, and revenue increases. Thus, we have to show customers who we are before they even visit our restaurant. In addition, the type of benefit sought influences our strategy. Some of the sychological benefits that our customers will be looking at are pleasure, appearance, status, and personal fulfillment.
We will build our dining experience around the ideas of psychographic segmentation. Pricing and Daily Special Our primary daily special will be a dessert special that is offered at the end of the meal. The special is going to be a different dessert for a lower price each night, giving us a chance to sell certain products. Other specials on the main course meals will be choices when first seated such as, dinner for tvvo options with a bottle of wine for one price. Our daily special will be priced slightly ower than our other menu items, and based on product sales objectives.
For instance, if there were a particular fish that needed to be sold this would be a featured food on the daily special. Closing Helping customers make the connection between distinguishing features they know and the potential psychological benefits they could gain is the key to influencing value perception. In the case of Smalls Steakhouse, the benefits they will gain are highlighted in our value statement, ‘real food, real chefs, and five-star service’. That difference being there is not another restaurant that cater to them in the same manner. They will leave with a self-affirming attitude.
In addition, more people desire to have an experience rather than simply purchase a good or service (Hitt, Ireland, & Hoskisson, 2013). Our pricing and communication strategy has to display this to the customer throughout the entire visit from the door to the time they checkout. With proper planning, education, and human capital we can make it work.