Black Angus Steakhouse Company’s Marketing Strategy

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  1. Introduction
  2. Purpose of Study
  3. Tabulation of data and type of analysis you use to run
  4. Analysis
  5. Expectations for the choice of the restaurant
  6. Perceptions of key factors of restaurant visited
  7. Bibliography

Introduction

Coming from periods when the state had more restaurants per capita than anywhere else in the nation (Robinson, 2007), Queensland boasts a vigorous and diversified restaurant sector. Last year, going to the Australian Bureau of Statistics records(2008), total hospitality and service turnover amounted to $9,004 million. At last count, the Courier-Mail determined from a search of City Council registers and Yellow Pages listings that there were no less than 6500 restaurants and cafes in Queensland, up by a substantial 30% from the 5000 that operated in 2001 (Mirosch, 2006). “Modern Australian”, Oriental-Western fusion, and ethnic (e.g. Chinese, Thai) comprise most of these. Given that Queenslanders typically spend in excess of $600 million monthly (Robinson, 2007), chains like Black Angus and Lone Star clearly have their work cut out for them garnering their fair share and inducing repeat patronage.

Purpose of Study

The fundamental purpose of this research is to critically evaluate:

  1. The present strengths and probable competitive standing of the Black Angus Steakhouse (BAS) operation.
  2. Identify opportunity gaps.
  3. The key consumer wants as they impact on the choice of restaurant.
  4. Whether the operational strategy of “superior quality and friendly service” has traction with customers.
  5. Which competitor is closest in terms of market appeal and patron segment served.
  6. The relationship between restaurant selection factors and satisfaction.

Tabulation of data and type of analysis you use to run

Since it is desired to compare marketing opportunity and satisfaction across three patronage segments, the basic presentation of data shall be crosstabulation of question 4 “casual dining steakhouse chain most familiar with” (presumably equating to “most patronized”) with every other relevant independent variable (IV). When the IV is also categorical or ordinal, testing for significance of differences shall employ the chi-square test. This is accessed via the SPSS command sequence Analyze-Descriptive Statistics-Crosstabs, check off chi-square in the statistics sub-menu, and process.

In the case of the core Importance Ratings and Satisfaction items, t-tests are the statistic of choice going by the assumption that the data is normally distributed and the fact that n for the three patron samples >30. Alternatively, one may assume that the scale data is not normally distributed since the nature of consumer expectations and customer experience phenomena is that these could largely skew either positively or negatively. Non-parametric tests may then be employed.

Analysis

General

Starting with socio-demographic profiles, one finds begins to discern the two of many similarities between the BAS and LSS market segments. Both restaurants appeal largely to men in their thirties and forties (the marrying and child-rearing years, as well as a time when disposable incomes rise because workers steadily gain promotion). There are also some similarities in income profiles. On the other hand, BAS appeals distinctly more to parents with three or more children.

Socio-Demographics

Gender

Among BAS patrons, men outnumber women by a ratio of 2:1 (see summary Table 1 below). Males are even more preponderant among Lone Star Steakhouse (LSS) customers. In contrast, women comprise two-thirds of restaurant patrons who are most familiar with (and presumably, prefer) Hog’s Breath Café (HBC).

Table 1: Gender * Which steakhouse restaurant are you most familiar with?

Which steakhouse restaurant are you most familiar with?
The Black Angus Steakhouse Hogs Breath Cafe Lone Star Steakhouse and Saloon Total
X19 — Gender Males Count 53 25 40 118
% within Which steakhouse restaurant are you most familiar with? 61.6% 38.5% 81.6% 59.0%
Females Count 33 40 9 82
% within Which steakhouse restaurant are you most familiar with? 38.4% 61.5% 18.4% 41.0%
Total Count 86 65 49 200
% within Which steakhouse restaurant are you most familiar with? 100.0% 100.0% 100.0% 100.0%
Chi-Square Tests
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 21.956a 2 .000
Likelihood Ratio 22.862 2 .000
Linear-by-Linear Association 2.502 1 .114
N of Valid Cases 200
a. 0 cells (.0%) have an expected count less than 5. The minimum expected count is 20.09.

Age

Table 2: Age Profile

Which steakhouse restaurant are you most familiar with?
The Black Angus Steakhouse Hogs Breath Cafe Lone Star Steakhouse and Saloon Total
X20 Age 18 – 25 Count 6 7 6 19
% within Which steakhouse restaurant are you most familiar with? 7.0% 10.8% 12.2% 9.5%
26 – 34 Count 17 1 0 18
% within Which steakhouse restaurant are you most familiar with? 19.8% 1.5% .0% 9.0%
35 – 49 Count 51 21 32 104
% within Which steakhouse restaurant are you most familiar with? 59.3% 32.3% 65.3% 52.0%
50 – 59 Count 8 31 11 50
% within Which steakhouse restaurant are you most familiar with? 9.3% 47.7% 22.4% 25.0%
60 and Over Count 4 5 0 9
% within Which steakhouse restaurant are you most familiar with? 4.7% 7.7% .0% 4.5%
Total Count 86 65 49 200
% within Which steakhouse restaurant are you most familiar with? 100.0% 100.0% 100.0% 100.0%

Broadly speaking, steak restaurant patrons of this sort tend to be 35 years of age or older. The 35-to-39-years life cycle stage is the most important, accounting for fully three-fourths of Lone Star patrons and somewhat more than half of Black Angus customers.

Far from being “old”, such a profile is younger than for the Queensland population in general. The ABS (2008b) age breakdown for the 2006 census shows that just one third (36%) were in the 35-44 years age cohort and almost as many (31%) were 45 to 60 years old.

Income

For some reason, the income distribution of BAS customers is bipolar: fully half earn less than $35,000 median for Australia (see chart 1 below) while almost all the rest earn in excess of $75,000 and even beyond $100,000 annually. The latter opens up possibilities for pricier “gourmet” offerings in a more diversified menu, a more upscale ambience, more premium vintages in stock or even an entirely new spin-off class of restaurant.

Income Class by Patron Segment
Figure 1: Income Class by Patron Segment
Chi-Square Tests
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 48.346a 8 .000
Likelihood Ratio 47.310 8 .000
Linear-by-Linear Association .294 1 .588
N of Valid Cases 200
a. 0 cells (.0%) have an expected count less than 5. The minimum expected count is 5.88.

This may well be one way of dealing with the LSS market, which is mostly low-middle or lower-income earners. Aggressively promoting an affordable menu with many items regularly on special or with announcing discounts for groups of friends at least once weekly may well switch LSS patrons and induce more frequent patronage to form its core market besides. On the other hand, a more determinedly fine-dine “BAS Club” may boost spending per head from well-off BAS patrons and attract a small number of upper-income LSS customers as well.

Going by reported incomes, HBC patrons are a kind of mid-market segment capable of upscale spending from time to time. Poaching such a group may usefully employ more status-conscious appeals and amenities, blatantly obsequious service, and “celebration destination” themes in advertising.

Family size

BAS customers have the highest proportion of three-children (or more) households whilst both HBC and LSS patrons are largely childless couples or singles living alone. This suggests that eliciting family-oriented menus, promotions and amenities could well stimulate more frequent patronage from the current base of customers.

Table 3: Family Size

X17 — Number of Children at Home Which steakhouse restaurant are you most familiar with?
Black Angus Hogs Breath Lone Star Total
% % % %
No Children at Home 23.3 69.2 63.3 48.0
1-2 Children at Home 27.9 24.6 4.1 21.0
3 or More Children at Home 48.8 6.2 32.7 31.0
Total 100.0 100.0 100.0 100.0

Expectations for the choice of the restaurant

Overall Findings, Importance of Patronage Factors
Figure 2: Overall Findings, Importance of Patronage Factors

In general, those who like going to this restaurant class put food quality and efficient service ahead of affordability. Impressive portions rank only fourth, suggesting that only a segment of patrons out there could get excited if the chain were to talk up “man-sized”, “family” or “sharing” portions. Atmosphere ranks low because, one suspects, it means many things to people. So does competence in front-of-restaurant staff and cashiers, presumably because Queenslanders are now inured to staff shortages in the local hospitality industry.

These findings do not in any way negate the importance of the “secondary” factors. Rather, motivation theory (e.g. “hygiene” versus “motivation” factors, essential requirements versus delightful pluses) should alert us to the possibility that portioning, atmosphere, price and great service perennially hold out for enhancing customer experience. These can be critical for the kind of favourable word-of-mouth and restaurant image that surmounts seasonal slumps, industry weakness or aggressive spending by the competition on adverts.

Food

Table 4: Importance Given to Portioning

X1 — Large Portions Black Angus Hogs Breath Lone Star Total
3 2.3 6.2 0.0 3.0
4 14.0 44.6 16.3 24.5
5 52.3 44.6 65.3 53.0
6 17.4 4.6 18.4 13.5
Very Important 14.0 0.0 0.0 6.0
Mean rating* 5.3 4.5 5.0 5.0
*On a scale of 1 to 7 where 1=”very unimportant” and 7=”Very important”

BAS and LSS patrons care somewhat more about impressive portioning than those preferring HBC do.

Table 3: Importance Given to Food Quality

X3 — Food Quality * Which steakhouse restaurant are you most familiar with? Crosstabulation
% within Which steakhouse restaurant are you most familiar with?
Which steakhouse restaurant are you most familiar with?
Black Angus Hogs Breath Lone Star Total
3 6.2 2.0
4 20.0 6.5
5 9.3 38.5 16.5
6 38.4 32.3 14.3 30.5
Very Important 52.3 3.1 85.7 44.5
Total 100.0 100.0 100.0 100.0
Mean rating* 6.4 5.1 6.9 6.1
*On a scale of 1 to 7 where 1=”very unimportant” and 7=”Very important”

LSS customers are the most emphatic about food quality, though BAS patrons are nearly as ardent about freshness, presentation and whether the food is cooked to their liking. By comparison, HBC customers are much less finicky about food quality.

Services

X2 — Competent Employees * Which steakhouse restaurant are you most familiar with? Crosstabulation
% within Which steakhouse restaurant are you most familiar with?
Which steakhouse restaurant are you most familiar with?
Black Angus Hogs Breath Lone Star Total
Not Important at All 27.9 12.0
2 59.3 10.8 29.0
3 12.8 24.6 6.1 15.0
4 43.1 36.7 23.0
5 21.5 57.1 21.0
Total 100.0 100.0 100.0 100.0
Mean rating* 1.8 3.8 4.5 3.1
*On a scale of 1 to 7 where 1=”very unimportant” and 7=”Very important”

It appears that BAS customers care not a whit about competent service as long as the atmosphere is right or the portions and quality meet their more stringent standards. To HBC and LSS patrons, however, service is moderately important.

These findings look counter-intuitive since special food preparation and at least adequate service would seem to be the primary drivers for restaurant patronage in any context. The puzzle is cleared up by David Solnet, who in lectures on Service Industry Management at the University of Queensland when he contends that the food-service industry is mistaken in over-emphasizing food and atmosphere to the detriment of service (Mirosch, 2006). Restaurateurs, he points out, overlook at their peril the vital role staff have in fostering customer satisfaction.

Table 5: Importance of Speed of Service

X4 — Speed of Service * Which steakhouse restaurant are you most familiar with? Crosstabulation
% within Which steakhouse restaurant are you most familiar with?
Which steakhouse restaurant are you most familiar with?
Black Angus Hogs Breath Lone Star Total
4 5.8 10.8 6.0
5 18.6 30.8 22.4 23.5
6 22.1 38.5 59.2 36.5
Very Important 53.5 20.0 18.4 34.0
Total 100.0 100.0 100.0 100.0
Mean rating* 6.2 5.7 6.0 6.0
*On a scale of 1 to 7 where 1=”very unimportant” and 7=”Very important”

On the other hand, those who prefer BAS have very high standards for order turnaround time and their counterparts at both LSS and HBC are only slightly less fanatical about the speed of service.

Table 6: Importance Given to Atmosphere

X5 — Atmosphere *
Which steakhouse restaurant are you most familiar with?
Black Angus Hogs Breath Lone Star Total
3 5.8 18.5 16.3 12.5
4 7.0 47.7 12.2 21.5
5 61.6 26.2 57.1 49.0
6 18.6 7.7 14.3 14.0
Very Important 7.0 3.0
Total 100.0 100.0 100.0 100.0
Mean rating* 5.1 4.2 4.7 4.7
*On a scale of 1 to 7 where 1=”very unimportant” and 7=”Very important”

Across the board, the atmosphere is only moderately important: all three patron segments differ little in their appreciation for ambience. One may ascribe this to the fact that “atmosphere” is an ambiguous term. The desire one for a comfortably casual, family dining place is lumped in the same category as the requirement for an ambience suitable for impressing on a first date, for instance.

Table 7: Importance Given to Affordable Price

X6 — Reasonable Prices * Which steakhouse restaurant are you most familiar with? Crosstabulation
% within Which steakhouse restaurant are you most familiar with?
Which steakhouse restaurant are you most familiar with?
Black Angus Hogs Breath Lone Star Total
3 7.0 3.0
4 34.9 4.6 16.5
5 37.2 46.2 20.4 36.0
6 20.9 33.8 30.6 27.5
Very Important 15.4 49.0 17.0
Total 100.0 100.0 100.0 100.0
Mean rating* 4.7 5.6 6.3 5.4
*On a scale of 1 to 7 where 1=”very unimportant” and 7=”Very important”

Competitive pricing does not seem vital to BAS customers and this makes sense if the chain emphasizes superb quality and friendly service but at a price. However, those who prefer the competition are distinctly more price-conscious.

Perceptions of key factors of restaurant visited

Food

Table 8: Rating of Restaurants on Portioning

X7 — Large Portions Which steakhouse restaurant are you most familiar with?
Black Angus Hogs Breath Lone Star Total
% % % %
Strongly Disagree 1.5 4.1 1.5
2 19.8 47.7 12.2 27.0
3 3.5 23.1 24.5 15.0
4 76.7 27.7 59.2 56.5
Total 100.0 100.0 100.0 100.0
Mean rating* 3.6 2.8 3.4 3.3
*On a scale of 1 to 7 where 1=”Strongly Disagree” and 7=”Strongly Agree”

All three chains earn mediocre ratings on portioning, denoting palpable dissatisfaction.

Table 9: Rating of Restaurants on Food Quality

X9 — Food Quality Which steakhouse restaurant are you most familiar with?
Black Angus Hogs Breath Lone Star Total
% % % %
4 26.2 8.5
5 9.3 38.5 16.5
6 39.5 32.3 14.3 31.0
Strongly Agree 51.2 3.1 85.7 44.0
Total 100.0 100.0 100.0 100.0
Mean rating* 6.4 5.1 6.9 6.1
*On a scale of 1 to 7 where 1=”Strongly Disagree” and 7=”Strongly Agree”

Patrons are more likely to be satisfied with the quality of food served at LSS than at BAS. HBC ranks a poor third in this respect.

Services

Table 10: Rating of Restaurants on Competent Employees

X8 — Competent Employees Which steakhouse restaurant are you most familiar with?
Black Angus Hogs Breath Lone Star Total
% % % %
2 21.5 57.1 21.0
3 43.1 36.7 23.0
4 12.8 24.6 6.1 15.0
5 59.3 10.8 29.0
6 27.9 12.0
Total 100.0 100.0 100.0 100.0
Mean rating* 5.2 3.2 2.5 3.9
*On a scale of 1 to 7 where 1=”Strongly Disagree” and 7=”Strongly Agree”

Patrons count BAS leagues ahead of the two rivals on knowledgeable service. While this validates service as the other leg of company strategy, less-than-topnotch ratings imply that patrons are somewhat dissatisfied with this aspect of service and believe that BAS could do more to optimise their dining experience.

Table 11: Rating of Restaurants on Speed of Service

X10 — Speed of Service Which steakhouse restaurant are you most familiar with?
Black Angus Hogs Breath Lone Star Total
% % % %
Strongly Disagree 12.2 3.0
2 30.8 49.0 22.0
3 22.1 41.5 38.8 32.5
4 31.4 23.1 21.0
5 36.0 4.6 17.0
6 10.5 4.5
Total 100.0 100.0 100.0 100.0
Mean rating* 4.3 3.0 2.3 3.4
*On a scale of 1 to 7 where 1=”Strongly Disagree” and 7=”Strongly Agree”

Similarly, BAS outperforms the competition on speedy, efficient service. On this aspect, patrons are even more emphatic that the chain could redress matters to their satisfaction. In other words, BAS staff are perceived to render speedier service than those of the rivals but they still fall short of expectations.

Table 12: Rating of Restaurants on Atmosphere

X11 – Atmosphere Which steakhouse restaurant are you most familiar with?
Black Angus Hogs Breath Lone Star Total
% % % %
3 16.9 5.5
4 2.3 33.8 12.0
5 27.9 46.2 2.0 27.5
6 27.9 3.1 36.7 22.0
Strongly Agree 41.9 61.2 33.0
Total 100.0 100.0 100.0 100.0
Mean rating* 6.1 4.4 6.6 5.7
*On a scale of 1 to 7 where 1=”Strongly Disagree” and 7=”Strongly Agree”

Their respective patrons rank BAS at parity with LSS on atmosphere, though the former stands distinctly better than HBC in this regard.

Table 13: Rating of Restaurants on Affordable Pricing

X12 — Reasonable Prices Which steakhouse restaurant are you most familiar with?
Black Angus Hogs Breath Lone Star Total
% % % %
4 16.3 32.3 16.3 21.5
5 17.4 35.4 18.4 23.5
6 66.3 32.3 65.3 55.0
Total 100.0 100.0 100.0 100.0
Mean rating* 5.5 5.0 5.5 5.3
*On a scale of 1 to 7 where 1=”Strongly Disagree” and 7=”Strongly Agree”

Bibliography

Australian Bureau of Statistics (2008a) Retail trade Australia. Web.

Australian Bureau of Statistics (2008a) Queensland at a glance. Web.

Mirosch, N. (2006) No bob-a-job world [Internet] Courier Mail. 2008. Web.

Robinson, R. N. S. (2007) Plain fare to fusion: ethnic impacts on the process of maturity in Brisbane’s restaurant sector. Journal of Hospitality and Tourism Management.

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