Details

Services Marketing

Elias Farmington owns a relaxed, comfort food restaurant in downtown Busyville, NH. He serves breakfast, lunch and dinner, and is open from 6am to 9pm. His restaurant is very busy from 7-9am, 11am-1pm, and 4-7pm. Sometimes there are lines outside and a packed lobby, which changes the “relaxed” atmosphere he works hard to maintain. He wants his customers to be served in a timely manner, and to enjoy their experience there, but the busy times stress his staff and the slow times are not productive, since he only makes money through “table turnover” and “average check” per turnover.

He is considering the following options:

1. The space next door to his restaurant is available and he could expand into that space, but it is very expensive, would need to be a long term lease, and would require extensive renovations (also very expensive). Should Elias take the chance and invest? Explain your thinking by discussing the pros and cons.

2. Elias’ staff works 8 hour shifts, with one 30 minute and two (2) 15 minutes breaks, meaning 7 hours of productivity per shift. He is considering adding some additional kitchen and wait staff, and shortening the shifts to 4 hours. He needs to figure out how to schedule the newly configured staff to cover the busy times and cleanup/setup in between. What might a new schedule look like and why/how will it help Elias with productivity? Explain your thinking by discussing the pros and cons.

3. Elias’ daughter wants to extend the business by starting up a food truck which will go on breakfast and lunch schedules to a local industrial park and 2 other areas of the city where a large number of their customers work. She wants to take orders ahead of time and use the food truck as a delivery method, and also let customers place orders and get them to go right from the truck. Will this smooth demand in the restaurant so it is less busy at peak hours, while maintaining Elias’ customer base? Or will the cost of the truck, staff and service outweigh the sales potential? How will he know how many customers will come in rather than use the truck service on any given day? How would he schedule the kitchen and wait staff to be sure he could manage demand in the restaurant?   Explain your thinking by discussing the pros and cons.

4. Elias’ son has come up with some promotional ideas to help smooth demand, such as early bird specials with senior citizen discounts to bring some dinner folks in early, and brunch specials to bridge the hours between breakfast and lunch. These would minimize the rush periods somewhat, while increasing the table turn over the course of the day. However, there might be some minimizing of the average check, also. Elias wonders, will this be offset by increased volume at off peak times? Will it also make it difficult to clean up and setup between busy times, adding stress to his staff?   What would it take to pull this off successfully and affordably? Explain your thinking by discussing the pros and cons.

5. Elias’s brother says that Elias should raise his prices and “thin the herd” of breakfast and lunch customers. Will the increase in check amount per table balance the lost income from customers not willing or able to pay the higher prices? Is there another way to incorporate pricing into the solution?   Explain your thinking by discussing the pros and cons.

What should Elias do? The downside of success can sometimes be having too many options, and not knowing which will fail and which will succeed.   The key is understanding customers and services marketing. After you discuss the pros and cons of each of the above suggestions, choose the best option or blend of options and explain IN GREAT DETAIL WHY YOU BELIEVE IT WILL BE SUCCESSFUL!

Your midterm should be 2-3pages, 1.5 spaced with 1 “ margins in 11 point Arial or Times New Roman type. It should take the following format:

1. List the important components and considerations in the case.
2. For each option, describe and discuss the pros and cons thoroughly (minimum of 1 fully developed paragraph for each pro and each con).
3. List and discuss the constraints for each option in detail.
4. Thoroughly discuss the options, including relating the pros, cons and constraints to the components and considerations you listed.
5. Select the best option or blend of options, and explain in great detail how it will address the issues in the case and why it is the best way to do so.

Grading will be as follows:

Pro’s, cons, constraints – 15 points for each option, (total 75)based on depth of analysis, use of services marketing concepts, writing, and organization of thinking in your paragraphs.

Relating option choice to components and considerations – 10 points, based on thoroughness of discussion, ability to make and describe connections among services marketing concepts and the analysis of available options. As always, writing and organization is expected so that your thinking is clearly understood.

Explanation of how chosen option addresses issues best – 15 points, based on thoroughness and depth of discussion, writing and organization, use of services marketing concepts and terminology.