The hotel market has introduced regular offer, savings on certain timings & potential upgrades to get customers interest. They’ve also looked at selling their own merchandise by selling their own towels & dressing gowns.
The internet has been used by all three with the inclusion of e-newsletters to its customers on a regular basis with updates.
Restaurants have created the ownership through loyalty cards and trying to create an experience within the restaurants like TGI’S & Hard Rock Café where you can get souvenirs like photos. Airlines through the use of air miles which encourage customers to re use the airline & also create a relationship with them.
Characteristics at Coyote Loco Restaurant
In regards to the Coyote Loco restaurant & the service characteristics that are most important, it can be seen that intangibility, perish ability & variability are the key characteristics to enable quality service.
Perishability - With the restaurant having reservations & tables available throughout the day it is vital they make the most of each potential yield, as once time has past the opportunity is gone which means that that money is lost. With this in mind it’s key that they look at ways in which they can make the most out what they have available & spread the demand.
Intangibility - Several intangible aspects affect the service quality of Coyote Loco, from the atmosphere, staff & the experience the restaurant creates.
The atmosphere can invite custom as it comes across as a friendly, lively & exciting place to eat & that using this to create an experience for the customers could help to create loyalty & attract segments not previously targeted.
The customer service of staff & how they treat the customers is a massive part of creating service quality, staff being polite, courteous & going the extra mile can have an imprint on customers minds & even mean they remember the service more than the product they’ve product. Internal marketing is important as the staff can have such an effect on so many other areas of the service & almost act as part time marketers.
In regards to variability the fact that certain standardisations in seating and the time at which customers take is something that isn’t deployed enough and means that they are missing out on potential yields.
REVENUE MANAGEMENT STRATEGY
The use of a revenue management strategy can be vital for Coyote Loco in making sure that the restaurant makes the most of each yield. The meaning of revenue management can be seen by Kimes (2001) as
“An umbrella term for a set of strategies that enable capacity-constrained service industries to realize optimum revenue from operations.”
This illustrates the importance of the strategy which is why many organisations use these types of strategies including industries where they share the characteristic of perishable products such as restaurants.
By using the 4c’s of yield management within the strategy & looking to incorporate parts of each c into the strategy they identify weaknesses & opportunities in their service for revenue management.
As Coyote Loco has larger demand during months when student are there the use of Calendar strategy will help to forecast future demand by tracking historical demand patterns.
This process will involve a forecasting procedure to allow for overbooking & the probability that some customer may not show up. Having a system that could forecast demand will give an advantage & they could include using a threshold curve to do this.
Clock strategy will enable Coyote Loco to dictate the amount of time each service cycle last. This approach will be imperative to the restaurant and be the main tool used during busy periods as it could reduce certain times in the process & potentially allow them to take more customers at those times, this also needs to done carefully as although in other strategies some customers may be sensitive to the price this also could have the adverse effect on customers who are time sensitive.
To attract the price sensitive customer the restaurant could use a cost strategy of lowering the price & restricting the menu at slower periods to try and bring those customers in, the use of a simply menu would also mean they could potentially reduce some of there running cost during these times like lunch time. This said the restaurant need to make sure that the customer who eat at peak times feel like there getting the better service and possibility of upgrading there meal or using something else to improve the service like loyalty cards, preferential booking features, dinners club & even special seating to keep that customer loyalty.
A strategy that many companies have used to make sure they make the most of each potential yield they have available is changing the prices charged for certain slow periods. This way they can lower the prices when less busy to make sure they get as many customers through the doors.
In the case of Coyote Loco with the mid week & lunch time troughs the use of special deals at these times like two courses for a reduced price or early bird specials to reward customers who eat earlier in the day.
At lunchtimes the use of buffet or set menus could not only attract customers but could also mean they could reduce their costs. Many restaurants have buffet lunches at a set price where its all you can eat, this gives the incentive that they are being given the opportunity at a reasonable cost, although setting a time limit or a set allocation would be beneficial. This way they could also attract other target segments; with the lunchtime buffet they could try to attract the local businesses on their lunch & to further develop the connection with students.
The implementation of further developing customer loyalty, as the restaurant has some loyal customers its important to make sure they are rewarded for coming back & that new customers they can create that loyalty.
Capacity management is key as with the restaurant they will have a good idea of how long customer duration will roughly be, they need to use this information along with the reservations they have to forecast the amount of patrons to avoid overcrowding, turning away of custom & customer displeasure. They could do this by deploying a table management system to make sure the change over time between customer’s runs smoothly, training the hostess in regards to this will help & to use standardisation in regards to the table layout at busy periods will potentially increase capacity.
The use of the whole restaurant will also enable the to gain more capacity as many customers staying at tables to drink they could encourage the use of the bar & also take advantage of the outside area during summer months. A tactic that many restaurants also use for customer while waiting to be seated is having a drink at the bar, this could also be used within the restaurant and could be encouraged by staff for before & after meals.
How to minimize the Impacts on;
Customers -
Using these strategies it will impact on the amount of customers they turn away, at the moment they are losing customers on Friday & Saturday nights when demand is high, with lower pricing at less peak times it should mean that they are turning away less customers away, if they are staff doing this could look at ways to get the customers back another time through promotions rather than sending them away.
It could also mean increases in the amount customers maybe charged at peak times, although customers may not be happy with the, especially regulars, there is a need to create add-ons or enhance the service to make the financial hit more bearable.
Length of stay for the customers will change during the busier hours as the restaurant will be trying to get more customers through the door, so this may mean that customers may spend less time at the tables.
Staff -
It will also have impacts on the staff & mean they will have to adapt to changes at the restaurant. Further training on procedures to staff will be needed including the responsibility of being more flexible & being able to adapt to changes fast.
With a multi tasking workforce this will enable them to deal with fluctuations in demand at certain periods. Training the staff in regards to demand & enabling them t see will help improve the service & cut the times of service encounters.
Shifts will also affect staff & it may mean working different or working longer to cope with fluctuations in demand.
SERVICE BLUEPRINT OF COYOTE LOCO
Supporting Information
Tangible Cues & Indicators Of Quality -
Within a restaurant there are many tangible cues & indicators of quality that could be from the customers perspective, its important Coyote Loco consider how the visibility of these cues will effect the way the customers perceive the service.
The staff within Coyote Loco play a massive part in effecting the way in which customers perceive the service. From the moment customers ring up to book till when they leave the restaurant their friendliness, customer service & personality can ensure that customers enjoy the experience & want to come back is good & if bad could mean they don’t come back.
The atmosphere in the restaurant is a tangible feature that they can create an experience for the customer, this is something that TGI‘s have created within their restaurants as although certain prices are higher than other restaurants they create a good atmosphere & that customers remember & that don’t mind paying for.
In between customers being seated and even during the service the cleanliness in the restaurant can impact and can lead to health & safety & hygiene problems. Having the staff cleaning tables regular and maintaining the cleanliness is a cue that will stay in customer’s minds & something that a lot of customers look for as they are entering the restaurant or being seated.
Steps in the Blueprint -
The majority of the steps in the process are necessary, they cover the whole process from start to finish, however there are possibilities that some steps could be brought together to reduce time & improve the service.
It’s possible that both appetizer & entrées orders could be taken at the same time to reduce the timescale & also mean entrees can prepare during the time the appetizers are being eaten. This will mean he waiting time for customer between meals will be reduced which can help with customer service.
There is also the possibility that the greet to ordering could be brought together as in some occasions the customers will have seen the menu & know what they want to eat, whereas some will take their time. In these situations its best practice to look at what the customers want, tailoring it to their needs something that will be harder to do during peak times but if done correctly during less busy times to help to make the customer feel special & create loyalty.
Is standardisation possible & is it advisable in this process -
Standardisation is possible through various parts of the process from when the consumer enters the restaurant till when they leave.
Greetings for when the customers first enter the restaurant could be standardised as they are very basic & provide a good introduction when arriving, a simple ‘Welcome to the Coyote Loco’ could help to make the customers feel welcome. These short scripting could be used in various scenario during the process including menu descriptions, taking orders & in regards to departure.
Whether this could be deployed within Coyote Loco is debatable as it is an independent restaurant too much standardisation could make customers think it’s like a chain restaurant where everything’s the same, this could mean they lose their personal touch with phrases feeling too scripted & unfriendly.
It’s important they try and find a balance to this as although they want to have standardisation in place they don’t want to come across like a fast food restaurant, maybe using basic scripting in certain placing like greeting & making sure that customers are happy with their food rather than using within menu’s & orders.
Uniforms could be used as if staff are dressed the same & are all well dressed can have a good impression on customers & show organisation.
During busy periods the standardisation of table placing & settings could be done to enable waiters to clean and set-up tables in readiness for the next customer, and will ensure that al the table appear the same.
Potential fail points & how can it be designed out & the recovery procedures that could be introduced -
It is evident from the blueprint & the current timings that Coyote Loco have during the service encounter there are several potential fail points. The first potential fail point is the greeting & getting their customer to their seats.
It’s vital that the critical points in the blueprint are maintained as these are pivotal in the whole process. The seating to greet needs to be made sure that it is efficient & effective as this is the first impression & sets the tone for the encounter.
Timings of each process have potential fail points as currently the processes at times take too long and mean thy could be getting more people in the restaurant. This said it is also a potential fail point if the process was too quick & could have the opposite effect on customers feeling they are being rushed.
Both visible & invisible reprocesses are key areas & are possible fail points especially during busy periods it vital they continue to make sure cleanliness of tables, cutlery, appearance of staff & furnishings all need to be kept to a high standard.
During processes where there are several participants this could also be a potential fail area including ordering & cooking as these involve both staff & the customers & the cooking staff, this could lead to confusion & could potentially lead to miscommunication with customers not getting what they ordered.
Potential Measures of Performance -
Overtime the use of the revenue management strategy & the implementation of the service blueprint can be measured for the performance by analysing several factors.
By asking customers to fill in surveys & using focus panels they can try to find out whether their service has improved, this could also indicate where the customers feel areas of improvement are needed. This method could also be used to improve customer loyalty & could include customers getting rewards or discounts for participating; it may also make the customers feel as though their opinion is valued.
Increase customer loyalty will be seen & could include customers becoming regulars & on close terms to staff, this will also lead to word of mouth for further business. Morale, organisation could potentially then lead to enhancements on the restaurants reputation.
With the way in which customers are more evenly distributed amongst the week it will also mean they should reduce the amount of people that are turned away on peak times.
Through illustrating the demand curve & the potential change it can bring it is clear this could be used as a tool to measure performance & potentially show how performance has changed.
Conclusion
It’s evident from the case that there are several issues in the service within the Coyote Loco restaurant, this said the are many opportunities they can seek to not only improve their service but improve their profits through a revenue management strategy & improving the timings customers are in the restaurant.
REFERENCES
Palmer (2005) - Principles of Services Marketing - 4th Edition - Adrian Palmer, P22
Venkat (2007) - The era of Convergence in Revenue Management, Journal of Revenue & pricing management, Vol 6,4 308
Kimes (2001) - CHR Reports - Yield Management - Centre for Hospitality research Cornell university - 2001 - Sheryl Kimes - p3
BIBLIOGRAPHY
Books
Principles of Services Marketing 4th Edition - Adrian Palmer - 2005
Services Marketing: People, Technology, Strategy 5th edition - C Lovelock - 2004
Reports
Demand Management: Beyond Revenue Management - Chris K Anderson & Bill Carroll (2007) - Journal of Revenue & Price Management - Vol6, 4 260 - 263
The Era of Convergence in revenue Management - Ramesh Venkat - (2007) - Journal of Revenue & price management - Vol 6, 4 306-308
Whither Services Marketing? - C Lovelock & E Gummesson - Journal of Service Research Vol 7, No 1, August 2004 20-41
CHR Reports - Yield Management - Centre for Hospitality research Cornell university - 2001 - Sheryl Kimes
Journals
Journal of Revenue & Price Management
Journal of Service research
Managing Service Quality
Journal of Marketing
Journal of Marketing Practice
Journal of Product & brand management
Websites
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