Category: Restaurant

Abstract

The evaluation of the process of economic ruin incurred by Marcos restaurant, and the suggestion of remedies thereof is the key objective of this report. An elaborate analysis was done with a specific focus on how the current organization of the restaurant has led to continue to occasion losses and dismal performance. The process includes Operational Costs, Declining Profits, Staffing, and Promotion as the main areas that would determine the analysis and rescue process. Generalized recommendations were made with certain specifications that centered on the need of improving the staff morale, the need to bolster competition in the local industry, and the need to launch aggressive promotion campaigns that would ensure a return of profitability and systematic growth of the clientele. Secondary sources were cited to give force to some of the opinions that are represented in this report.

Introduction

Marcos Restaurant on High Street in Birmingham is in the grips of imminent collapse unless drastic rescue measures are carried out in good time. For the last seven years since 1994, the restaurant has witnessed a steady decline in profits and is now encumbered by a series of increasing losses. The almost dysfunctional situation has arisen mainly because of administrative oversights. The owners of the facility have been reluctant to introduce operational systems that would adjust the restaurant to the commercial realities of the current economic dynamics. Consequently, the restaurant is now faced with bankruptcy as it is practically insolvent due to the heavy losses it has incurred. This scenario usually results from unchecked overheads against returns. The objective of this report is to point out the fundamental weaknesses that have stifled the growth of Marcos restaurant leading to its current dismal performance.

Operational Costs

One major reason why Marcos restaurant has stayed on the path of losses is the heavy costs of operation. Marcos restaurant relies on a menu of expensive ingredients that cost lots of money. The problem is that the continued making of these expensive foods is without regard to consumer preferences. Most of the food prepared goes to waste since customers have revised their tastes from the times the restaurant began. For instance, the restaurant offers 15 pasta dishes and 25 types of pizza per day. The facility also offers about 12 deserts and all prepared from the restaurant. One major weakness of this restaurant is that in order for the restaurant to sustain its exotic menu the budgetary allocation of ingredients must come up to 657 pounds a week. However, about 365 pounds, about half the weekly budget goes to waste because of the shifting trends in food consumption at the restaurant.

Most of these foods go to waste as the restaurant does not attract sufficient clientele during the breakfast and lunchtime hours. Despite this reality, the owner has stuck to the same routine for the sake of preserving the Italian traditions which is one of the trademarks that the restaurant has always endeavored to use as premium. The opening up of another Italian restaurant in the locality with a flourishing performance is proof that the Italian factor must be customized to meet the specific preferences of the clientele. The owner of the restaurant Marco and Maria have stuck to the exotic tradition despite the fact that it lacks any meaningful commercial value.

Declining Profits

The steady decline of profits at Marcos restaurant in the last seven years testifies the dire need for revamping the organizational structure of the restaurant. The shift from profits and loss over the last seven years is illustrated in the profits of 250 pounds in 1994, to losses of 1800 pounds in 2001. The fact that the business is also exercising the repayment of a loan of 350 pounds per month heightens the predicament. Looking through the functions of the restaurant there are certain areas that could be revised to save the business certain expenses. The core areas of this business could be revised such that there is more focus in areas where much of the firms profits seem to originate.

Some of these areas that might be revised to save costs include the abolishing of the breakfast and lunch shifts given the high costs involved in running them against the low profits they bring to the restaurant. The business has been losing about 150 pounds by operating a breakfast and lunch schedule whose profitability fell from 30 percent seven years ago to insignificant levels in the current economic environment. The implication to this abolishing of the breakfast and lunch schedules would be that the business would be able to save over 600 pounds in costs. Shedding off non-performing sectors of an enterprise is one way through which beleaguered firms have turned around their fortunes. This money could be used in meeting some of the firms operational overheads in servicing the monthly debt.

Staffing

Marco should inject some professionalism into the facility. The restaurant runs mostly by family members and friends. He should do a gradual fading away of the staff from the friends and family and advertise for positions. As a measure to instill a sense of professionalism at the restaurant, the management should consider promoting some of the skilled workers in the restaurant to managerial positions. For instance, the management should consider hiring Steven in the Kitchen department so that he replaces Marco as the staffer in charge of kitchen operations. This is because Steven is an expert in the field with proven experience and skills. The hiring of trained personnel usually gives the workplace a formal ambiance. He should also assign more staff at the most crucial hours of the evening and face out the rest.

Marco and his wife should not engage in the direct running of the business but instead, delegate the work to skilled workers. The roles of administrators at workplaces should remain administrative and if possible they should limit their physical presence in the working area in order to relax the working environment for the junior staffers. The handing over of the management activities should therefore involve the active selection of managers from the workforce to create room for service improvement. This will give the workplace some ambiance of professionalism and restore the morale of the workers. The management should also take steps and delegate. Similarly, Maria and her sister Clara should relinquish their positions at the front area to employed staffers so that the operations of that particular section capture the spirit of dutiful enterprise.

Conclusion

The rescue of the Marco Restaurant is an activity that shall be anchored on three main areas. These areas are the intervention against the continued drain of profits by cutting on costs and halting non-core activities of the organization. It will also be done by improving the existing services to brand the facility, as an ideal destination for meals and recreation.

Recommendations

As part of a strategy to return the business to profitability, the management should launch aggressive customer promotions and relations exercises. Sales promotions usually create a significant euphoria that a struggling business can effectively convert into goodwill. This should be in form of gifts and other forms of value additions to their services that might be useful in capturing their lost clientele and retaining the present ones.

The restaurant should also make forays into the commercial niche of its main competitor Guiseppe by seeking alternative lunch deals with local offices. This should be done in ways that shall bring out its competitive edge especially through the provision of better and trendy services.

The management should also seek to improve the morale of its workers through the change of their dress code to align with their individual preferences at the workplace. For instance, the uniforms should be replaced with some form of smart casual. This will help rejuvenate the spirit of the workers towards service delivery.

Marco should consider revising his strong cultural links to Italian cuisine in a way that would also celebrate the emerging trends and preferences. One way through which this could be achieved is by aping the system of the main competitor Guiseppe and adding improving on it as a matter of identity.

References

Brigham, F. E, and Ehrhardt. 2008. Financial management: theory and practice. Edition 12. New York: Cengage Learning.

Buttle, F. 2008. Customer Relationship Management. Oxford: Butterworth-Heinemann.

Harte, J. 1997. Management crisis & business revolution. Piscataway, New Jersey: Transaction Publishers.

Kincaid, W., J. 2003. Customer relationship management: getting it right! Upper Saddle River, New Jersey: Prentice Hall PTR. 2003.

Kotler, P., and Gary, A. 2010. Principles of marketing. Edition 13. Upper Saddle River, New Jersey: Pearson.

Nieuwenhuizen, C. 2009. Entrepreneurial Skills. Edition 2. Cape Town: Juta and Company.

Veblen, T. 2005. The Theory of Business Enterprise. New York: Cosimo, Inc.

The restaurant report outlined a number of violations that were discovered during the restaurant review. In this essay twelve of these violations will be discussed.

First, there is the issue of insufficient hot water. Hot water is used mainly for hand washing and dish washing and may also be used for other cleaning activities.

Its inadequacy or lack can be classified as a Microbiological hazard. Dirty hands are a perfect means of spreading germs. Increasing the amount of hot water can serve as both a short and long term corrective measure.

Handling ready to eat foods with bare-hands is a Microbiological hazard. Germs can be easily spread through the hands from one surface to another or to food. This can be corrected by use of sanitized gadgets that are specifically designed for that purpose.

Storing foods at inappropriate temperatures is another Microbiological hazard. Micro-organism multiplication is highly likely when food is not stored at the recommended temperature. Also food poisoning may occur when food stored at improper temperatures is consumed. If this happens it will be termed as a chemical hazard.

Cockroaches in flour spread germs in the flour. This is a Microbiological hazard. When the roaches are in flour, they are likely to be cooked together with the flour. This is a chemical hazard as the food may turn out toxic. The cockroach itself will be a foreign object in food which is another hazard.

As a short term correction the flour should be discarded and a parasite and pest control program should be initiated right away. For the long term such food items as flours, sugars and the like should be kept in tightly lidded containers.

Improper hand-washing procedures will lead to multiplication and spread of disease causing pathogens. It is a Microbiological hazard. For both long and short terms, the hand washing procedures should be revised.

Packaged chicken nuggets stored on a chair are likely to collect pathogens. This is a Microbiological hazard and can be corrected by ensuring that all packaged food either raw or cooked, is stored appropriately.

Dish machine sanitizing improperly is a Microbiological hazard. If the dishes are not sanitized properly, they are likely to transfer germs to the food served in them. If the machine is not working properly, hot water with sanitizer can be used in the short term as the machine awaits repair or replacement.

When the paper-towel dispenser at hand sink not working people may resort to using cloth towels which spread germs very easily. This is a Microbiological hazard. The dispenser should be repaired or replaced and better.

Ice-scoop handle touching ice means that germs from the hands of the many people who touch it will be transferred to the ice, making this a Microbiological hazard. Invest in a long handled ice scoop.

Employee food left on prep table puts the food at risk of getting foreign objects. The prep table is used for preparing food mainly raw food. All food ready for consumption should be kept on the dining table.

The rest room harbors many types of germs and it is very easy to transfer these germs too food in poor hygiene conditions.

Use of hand sanitizer only is not enough especially when handling food and after visiting the rest room. This is a Microbiological hazard and can be corrected by washing hands with soap and rinsing under hot running water.

Placing unlabelled food in walk-in may cause confusion during service. This is a chemical hazard as some people may end up consuming foods that they are sensitive to. All food should be labeled.

All microbiological hazards encourage spread of germs which cause diseases mainly related to the digestive system. These include diarrhea, vomiting, stomach pains and nausea.

More serious infections such as jaundice and hepatitis A can be transmitted by improper hand washing after visiting the rest room. Chemical hazards may cause life threatening reactions to food, due to allergies and sensitivity and/or intoxication.

In 2014, the Food and Drug Administration (FDA) issued legislative support for calorie labeling on restaurants menus. The intervention focused on increasing customers awareness of the food they consume and maintaining the transparency of the calorie intake per each meal. Although calorie labeling increases the costs of menu development and does not provide any distinction between beneficial and empty calories, it still draws consumers attention to calorie content, its influence on their health and disease management.

The importance of calorie labeling is in its ability to provide the consumer with the exact number of calories per meal, nutrition information about the meal, and support his or her decision toward a healthier choice. It does not directly change consumer behavior but raises awareness about their eating habits, thus fueling consumers demand for healthier items in the menu and potentially preventing the development of chronic illnesses. Moreover, consumers tend to underestimate the number of calories they take each day. Such menus will help them navigate their standard course of meals and see whether it has to be changed or not.

Another important aspect is that these menus will help people with chronic illnesses support healthy behavior. Obesity can increase the risk of developing diabetes, hypertension, stroke, heart disease, etc. Consumers with diabetes can evaluate the facts and added sugar in a meal, as well as carbohydrates, which increase blood glucose levels. People with obesity can compare the number of calories in different kinds of meals, choosing the one that is healthier and beneficial for them due to their condition. They can also find out whether the meal they prefer is not too high-calorie. If a person with obesity follows a specific diet and lifestyle interventions, he or she will be able to decrease their daily calorie intake to lose weight.

It is important to be health-conscious for all consumers, not only those with or at risk of gaining chronic illnesses. Research shows, however, that calorie labeling together with the traffic light system (the division of meals into best, careful, and limited choices) have more impact on people with unhealthy eating behaviors than those already aware of the problem. Nevertheless, it is important to increase the number of individuals aware of the impact of calorie intake on their daily lives by displaying them on menus. First, it will draw the attention of those unfamiliar with the issue of their food choices. Second, it will support those who are attentive to their calorie intake. Third, it will spread the general awareness of calorie intake among the American population and influence the obesity epidemic.

The problem with calorie labeling is that it is costly for chain restaurants and might not be supported; some of the meals will become less popular, affecting restaurants revenues. Restaurant chains might provide wrong calorie labeling to increase the consumption of a particular meal or refuse to provide detailed data about it. Calorie labeling can lead to a public backlash, thus negatively influencing the image and market share of chain restaurants. Nevertheless, to remain competitive, they will have to add new, healthier items to maintain their market share and consumer loyalty. Consumers choice of healthier foods will allow restaurants to increase sales by introducing a new line of items suitable for dieting.

To conclude, calorie labeling will help consumers evaluate nutritional information of meals, estimate their daily calorie intake, pay attention to their food choices, support healthy behaviors in case of chronic illnesses such as diabetes and obesity, and make conscious choices about their health. Although calorie labeling increases the costs for restaurant chains and does not always use the traffic light system, it still draws consumers attention to calorie content, its impact on their health and disease management. Calorie labeling should be supported to address the epidemic of obesity in the USA and maintain a healthy approach toward ones own body.

The Promotional Portfolio: Developing New Efficient Tools

When it comes to establishing a new business, running a restaurant presupposes quite the same complexities and opportunities as any other kind of entrepreneurship (Garvey, Dismore & Dismore, 2011). In the case study in question, the restaurant entitled William Blue Dining is being depicted and the various ways of improving its state of affairs are being considered. With the help of a range of adequate ideas, the company can actually become a great success.

Promotional offer: choosing the right words

To start with, the promotional offer has to be introduced. According to Smith & Schulz, promotional offer is a range of services and/or goods that are going to be introduced into the target market and promoted to the public (Smith & Schulz, 2004). Hence, in the context of the restaurant services, the specific cuisine has to be promoted efficiently.

According to the report in question, the major asset of the William Blue Dining is the fact that every single bit of food there is live, i.e., is cooked immediately after the client orders a dish. Hence, the promotion must be focused on offering live cuisine. As a matter of fact, the phrase live cuisine from all over the world can actually serve as a motto for the restaurant.

Advertisement: let the world know about the restaurant

As for the press release, it will be aimed at making the restaurant known even better by the people from all the continents where the William Blue Dining affiliates are located. With the help of an elaborate advertisement strategy, one can possibly attract even more clients to the restaurant. Hence, the objective of the advertising campaign is to make the world talk about William Blue Dining.

As for the advertising strategy, it will be quite suitable to create a memorable TV and online commercial that will not be annoying, but make people pay attention to what William Blue Dining has to offer.

Press release: concerning the technical issues

The suppose press release will be aimed at making the restaurant popularity even bigger. In addition, with the help of a press release, William Blue Dining will cement its position not only among the general public, but also among people of greater influence and among press.

Since the percentage of the North Sydney business public among the visitors of the restaurant makes around 25%, it can be considered that businessmen of higher rank can visit the restaurant and, thus, raise the restaurant revenues. With the help of the interviews of the latter, success is guaranteed.

A Twelve-Month Promotion Plan: A Careful Strategy to Follow

However, every single business venture needs a plan. Without an outline the steps that need to be taken to promote the given enterprise among the rest of the people and make them spread the word about the delicious dishes served in the restaurant, William Blue Dining might be not quite successful as expected.

According to Luther (2011), a good promotion plan is supposed to incorporate the information about the possible losses and the expected profit, providing the conclusion about the reasonability of the promotion actions. With the help of such a plan, one can decide how to make William Blue Dining a well-known restaurant.

The forms of promotion: identifying the methods

It is necessary to mention that William Blue Dining is going to use online and TV promotion, as well as advertisements in newspapers to make more people learn about the suggested services. However, apart from the traditional means of advertisements, personal selling will also be used.

The above-mentioned presupposes that William Blue Dining will employ the people who are going to offer passers-by coupons or leaflets about the restaurant, the dishes, the cuisine, the specifics, etc. Since personal promotion will help demonstrate certain details concerning the services (Lamb, Hair, McDaniel, 2011, p. 552), people will be able to learn even more about the restaurants special offers.

Indicating the budget: a good use of money

Since most of the restaurants offer dishes for $8 average, it can be suggested that the advertisement campaign should not cost more than the restaurants gross annually. Of course, on the one hand, a good advertising campaign can save the day and be repaid in several months or even weeks; on the other hand, though, the risks are quite high, and, since the entire chain of restaurants is at stake, it is necessary to use the resources wisely. Therefore, 20% of the annual revenues can be spent on the campaign.

The rationale for time, data and medium

Since most of the visitors are businessmen, students and elderly people, it can be suggested that the time for advertisements should be early in the morning, when elderly people are already awake, businessmen to work and students go to their colleges, universities or institutes; in the evening, when the elderly people, students and businessmen are at home; and (for the public promotion) around 1  2 p.m., when students and businessmen have some time to spare.

As for the data when the promotion starts, it can be suggested that in some three weeks everything is going to be ready for the start. Finally, speaking of the medium, TV, Internet and public advertisement will be most suitable.

The marketing promotion strategy: summary

The promotion strategy is aimed at capturing the target customers and impressing them.

Customer Feedback Analysis: Learning to Listen Carefully

It is important to keep in mind that the restaurant services will also have to take the clients ideas concerning improvements into account.

Concerning the objective: the required information

The clients opinion about the service and its possible improvement will be demanded.

An applicable format: questionnaires and surveys

For the feedback collection, surveys and questionnaires, as well as multiple-choice questions (e.g., How do you rank the services?  a) excellent; b) O.K.; c) could have been better; d) awful) and feedback cards (Restaurateur, 2010, p. 287) are going to be used.

Feedback forms and their use: comfortable and efficient

The feedback forms are going to be printed in A6 size, written in 14pt. or larger font and written on blank white paper.

Information processing: what customers need

Once the necessary information is gathered, it is going to be distributed into several groups, namely, the complaints concerning the service quality, the recommendations about the probable improvements and the positive feedback. Thereafter, the positive aspects of the restaurants work are going to be perfected, while the negative elements are going to be either improved or eliminated. With the help of the given approach, William Blue Dining is going to become a huge success.

Reference List

Garvey, M, Dismore, H, & Dismore, A D, 2011, Running a restaurant for dummies, John Wiey & Sons, New York, NY.

Lamb, C W, Hair, J F Jr., McDaniel, C D, 2011, Essentials of marketing, Cengage Learning, Stamford, CN.

Luther, W M, The marketing plan: how to prepare and implement it, AMACOM, New York, NY.

Restaurateur, D R, 2010, Everything guide to starting and running a restaurant: secrets to a successful business!, Adams Media, Avon, MA.

Smith, S & Schulz, D E, 2004, How to sell more stuff: promotional marketing that really works, Kaplan Publishing Company, Chicago, IL.

Strategy Paper 1: Proposal

The purpose of this paper is to examine the prevalence of family owned small business through analysis conducted to assess their contribution and impact to the society. The research is aimed at assessing the problems faced by small family owned businesses. First, the study will examine specific case of family owned small business, Mama Mancinis, a mid size restaurant in Chicago area, in order to examine how closely it fits the general principles of family owned small business.

The success of this small business is owed to good planning, quality of their product and identification of the niche market. Bruno Mancinis vision and planning contributed greatly to the success of the business. The paper focuses on dynamics of owner-owned enterprises and Mama Mancinis business was chosen for this case because of the successful, family owned small businesses which are typical example of increasing numbers all family owned businesses all over the world.

Mama Mancini is a small family business started in 1913 by Arturo Mancini, an Italian Chef specialising in serving genuine home made sources. The restaurant has gained popularity over the years due to its unique delicacies of Italian recipes and dining experience combined with good cultural atmosphere.This small family owned business was running at a loss five years ago, the break even point was achieved during the third year. The figures below present the companys financial statements.

INCOME STATEMENT FORM MAMA MANCINIS FOR THE PAST FIVE YEARS

(Amounts are in $000)

Mama Mancini is classified as a small business because the enterprise is owned and operated by family members. Family owned business is defined as a general agreement among family members that requires ownership and management of the business. Small business enterprises contribute greatly to the American economy and studies have showed that 75% of all businesses in the United States are family owned.

Studies have also shown that small businesses contribute to 50% of the GDP and 78% of jobs generated within the United States This research demonstrates that family owned businesses across the United States are the major backbone of the domestic economy (Philips & Raspery 1).

Strategy paper 2: Target Marketing and Positioning

Mama Mancini restaurant is situated at a secluded environment, in the suburbs of Chicago area characterised with great atmosphere and serves a traditional cuisine of authentic Italian food to its customers. The sound system of the music is neither loud nor too slow and offers comfortable seats cushioned with avante-gard-styled booths.

The water foundation and aluminium ceiling funs provides a cool atmosphere in hot summer days adding more serenity to the environment. Jack Mancini, the restaurant chef accredits the food in his restaurant as sensational, tasty and satisfying and the harmonise music the restaurant provides helps create the perfect ambiance that attracts more customers to the place.

Just to add to the ambience of the place, the restaurant plays a wide array of Italian music that adds more dining experience to the cultural atmosphere. Marketing mix comprises of product, price, place and promotion, and as mentioned earlier, Mama Mancini has incorporated all this strategies in its product (Dissanayake 9).

Segments that make up the target markets in Mama Mancini restaurant revolve around how the business targets its market in terms of distribution of products, its promotion and pricing. Mama Mancini restaurant offers as the best example by charging relatively low prices on their menus and offering buffers to returned customers. This strategy has established the firm long term relationship with its clients.

The firm has also streamlined its products to specifically meet customers needs by offering a variety of sauces to choose from. Mama Mancini friendly environment located in a convenient location in the heart of Chicago and its culinary precision places it at a better advantage over its competitors. Third, partnership with customers helps develop the level of trust which makes the customer commit to staying in purchasing the products even if they dont need it (Philips & Raspery 2).

The companys competitive advantage is derived its exceptional culinary precision in serving Italian foods of genuine home made sources offers it a better competitive advantage over other businesses.

The firm configures its resources (employees, customers and suppliers) within a challenging environment to meet its demands and has also been able to offer its customers incentives that include buffers to gain competitive advantage over its competitor and as a strategy to retain and attract more customers. In addition, a strategic perspective would also require a company employing resources such as skills, assets, finance, relationships, facilities and technical competence.

On social and economical perspective, Mama Mancini development strategy involved passing off management leadership from one generation to the other, a strategy that pulls in new skills and products to the stale markets. Different ideas brought in by new members positively impacts on the productivity and profitability of a business and may have positive influence on the communities (Philips & Raspery 2).

The product position in marketing describes how a business creates its image or identity of their target markets. Mama Mancini for this instance has been able to maintain its Italian family for generations and its exceptional culinary precision in serving Italian foods of genuine home made sources offers it a better competitive advantage over other businesses.

The is has helped the company to be identified as an Italian Cuisine in all its branches opened all over Chicago and within the United States making their sales doubling over a period of five years. Even though the business was running at a loss for a period of five years, its strategy in serving exceptional meals at affordable prices made it achieve break even point on its third year in business (Philips & Raspery 3).

Strategy Paper 3: Product and Channels

The restaurants strategy to branch out into sauces enables it to gain niche markets that existed for the sauces of Mama Mancini. As demand the restaurants products increased, Mama Mancini started extending its services outside Chicago borders to more international borders such as Japan.

Mama Mancini product offering that include a variety of sauces to choose from has given the company a differential advantage over other competitors. The total numbers of branches opened by Mama Mancini over the past decades has had great impacts on the US GDP.

Capital expansion of the business is generated from firms reinvest into the business to support and perpetuate wealth for future generations. Also, its ability to make long term investments in opening up branches in different locations would subsequently help its future generations as opposed to the large corporation motives of short term returns (Philips & Raspery 4).

Small family owned businesses often face cash flow crunch problems and Mama Mancini is no exception. Its Income statement displays a negative cash flow in the first years of business. These small businesses were in the habit of short term planning, with simple budgets that projected only into the immediate future.

This could not enable them develop new markets and extend credit facilities to their clients due to the cash flow crunches they faced as result of overtrading as the case of Mama Mancini. Mama Mancini experienced overtrading within its first two years of trading since it had incurred large capital expenditure in purchasing production facility that made it difficult to meet orders it had already taken due to lack of funds.

Also, the business was not in a position to extend credit facilities to the customers and did not have enough buffers in case of such emergencies. However, Mama Mancinis credit crunch improved over the years as the Company was able to build up on its profit base as owed to effective management of production and selling cycles (Philips & Raspery 4).

Family owned businesses often encounter the problem of retirement as opposed to large corporations. Most cases the founders of these enterprises pass on the management to younger family members that often welcome tensions and problems.

Research reveals that family businesses are concentrated upon the issue of effective succession of male family. Over the years families have tended to move away from transferring possession to their direct heirs to a shared leadership since the chosen successors may be incapable of handling the business and this makes more economic sense.

Multiple successors may offer advantage to the company because of the new ideas they bring into the business that may stimulate growth and performance of the enterprise. In the case of Mama Mancini, the founder of the business Arturo gracefully stepped aside to allow Bruno to capitalise on bringing new ideas and products into the business (Philips & Raspery 4).

Mama Mancini fulfils customer needs and provides benefits by developing its strategies on risk taking, innovation, productivity and independency thereby increasing firms productivity and personal responsibility to the economy.

This strategy enhances the firms strength and success and disables the burden during leadership transition. Since the firm has heavily invested in customer service, respect tradition and take good care of their employees contrary to large corporations, they are more likely to gain long term trust with its employees and to the clients as a whole.

And also, since Mama Mancini operates on attributes such as management status, family union and ownership, and share simultaneous roles, history, identity and language and their emotional involvement and acknowledgement of privacy gives them a caring heart about treating their employees fairly, luring family members into the business and providing jobs for the public (Philips & Raspery 4).

Brand name of a business may include family names, individual names or combination brand names. Mama Mancini for this case uses the Italian name Mancini to identify with classic Italian recipes and culture. Since the firm is involves majority members of its Italian family, direct family involvement and transition is passed on to multiple generations, which results into more businesses and larger economic contributions.

The excellent dishes provided by the restaurant and friendly working environment leads to satisfied employees and retention, productivity ultimately leading to good services thereafter, customer satisfaction and loyalty, key determinants to financial success (Taguiru and Davis 1).

Product life cycles are strategies a firm encounters when introducing a product to the markets. The stages include market introduction stage, growth stage, maturity stage and saturation and decline stage.

In market introduction stage, a firm always experiences low sales, no competition, create demand, incur high costs in product orientation and there are either makes little or no money. When sauces were first introduced Mama Mancini, family members were directly involved in the day-to-day running of the business with no compensation. Customers were charged relatively low prices and buffers were offered to returned customers.

In the growth stage, the restraint financed its activities through personal funds and resources to cover up the initial set up costs. The business was started with limited personal resources and continued to grow gradually through personal recommendations among the Italian community in Chicago, later extending to other networks across the United States.In maturity stage, the company starts to realize increased competition, sales volume increases and industrial profits go now.

For the restaurants case, the wide array of Italian music that is neither loud nor too slow adds more dining experience to the cultural atmosphere. In addition, the comfortable seats cushioned with avante-gard-styled booths helped the firm realize increased sales.

The water foundation and aluminium ceiling funs provides a cool atmosphere in hot summer days adding more serenity to the environment and the sensational, tasty and satisfying and the harmonise music the restaurant provides helps create the perfect ambiance that attracts more customers to the place. In my opinion, I would like to recommend the restaurant to build close relationships with its employees as a strategy to build customers loyalty and establishes viable business (Philips & Raspery 4).

Vertical marketing system is where members of a channel of distribution that comprises of producer, wholesaler and retailer work together to achieve business goal. Mama Mancini uses vertical marketing system since it configures its resources (employees, customers and suppliers) within a challenging environment to meet its demands.

The firm does not use any intermediaries since all restaurant activities are run by family members. Members of the channel that perform the regrouping activities are Mancini family members since they head most of the restraint branches all over United States. Vertical integration does not make sense in this case since all family members are involved in running of the business and there is no significant authority figure (Philips & Raspery 4).

Strategy Paper 4: Promotion and Pricing

Personal networking and interpersonal relationship in Mama Mancini Restaurant had greatly contributed to product promotion and pricing. Since small businesses may not have the advantages of huge advertisement budgets large corporate have, they are expected to go an extra mile to create their own brand recognition for their products through personal level of service they provide.

Numerous studies have concluded that success of small enterprises is owed to the heavy investment of the owners to the businesses and the hard work they put into the business to make their investment successful. These businesses never fall short on manpower as they tend to pull in their family members in case of emergencies unlike large corporate businesses.

Studies reveal that customers tend to favour family owned business due to the personalised services provided that ensures more satisfied customers, a key to success of any business (Ashley-Cotleur at al 10). Satisfied customers tend to spread the word faster than any other form of advertisement which favours small family owned businesses better.

A typical example is that of Mama Mancinis. Clients who visit the restaurant frequently due to the remarkable high quality home made sauce and personalised services recommend the place to other people which validate the principle Philips & Rasbery states to be the best form of advertising there is. (3).

Mama Mancinis another subsequent branches opened all over Chicago have thrived because it invested heavily from its family resources and the exception services it provides to its clients.

The goals of the business

According to a study conducted by (Taguiru and Davis 1), Mancinis business were discovered to be functioning within six goals; developing new products, financial security and benefits for the family, created a home based work environment and concentrated on personal growth and autonomy.

Mancinis business goals were of a family oriented that provided more personal nature to the business and opposed to a sheer monetary motivation as evident in most non-family businesses worldwide. A more distinguishing feature about family business is that they offer interactive working environment and tight relationships very different from the impersonal, corporate culture relationships seen in most large businesses.

This makes them very responsible for the success of the business and economic productivity since employees work in a happy atmosphere which enhances good services and attracts more customers. Prices of Mama Mancini foods are consistence in its entire stores all over United Stated and products of the company are not priced according to competitors from other companies. Low priced dishes in Mama Mancini have been able to attract more customers into buying the companys products.

Conclusion

The study question at the beginning of this research was to examine the factors that contributed to economic success of family owned small business and it has become clear that personal networking and interpersonal relationship contributed greatly to the success of the business. Small business back in the day faced finance problems and credit crunch, but since loans are available today, adequate planning and creativity can enable long term planning.

In my opinion, Mama Mancinis has showed a perfect example on how small businesses are backbone of the economy. The government should step in and offer attractive loan facilities that attract low interest rates to these enterprises to stimulate their growth. It took Mama Mancini five years to penetrate other markets, if affordable loans were in place, that wouldnt have been the case and more jobs would have been generated sooner.

Works Cited

Ashley-Cotleur, Catherine., & Sandra,West. Family Business and Relationship

Marketing: The Impacts of Relationship Marketing On Second Generation Family Business. Frostburg State University, vol .35 (2000) pp. 1-14.

Dissanayale, Kumudinei. The construction of Organizational Structure;

Connection with Autopoietic System Thoery Contemporary Management Research, vol.2, issue 2 (2006) pp.1-12.

Philips, Mancini & Raspery, Stephen. Welcome to Mancinis Not just a place to eat great food, but a restaurant to have the perfect meal Good life, October Issue, (2002). pp.1-4.

Tagiuri, Davis, J & Swarts, Stephen. The challenges of multi-displinary consulting to family owned businesses. Family Business Review, 2(1989.):pp.1

Introduction

The term simple is an adequate description of the website of 1789, it has a simple purple background, the graphics arent too flashy, it presents just enough information without overwhelming the average website visitor and has interesting functions in the form of an online reservation tool, descriptions on what products are available and a brief overview of the restaurant itself to entice people to come and try the food. Unfortunately, when looking at the section for foods and wine a slight problem appears wherein the food and wine list is placed in a downloadable PDF file instead of merely being written on the site itself.

While it may be true that downloadable PDF files are a convenient way of sharing information the fact remains that most internet goes, myself included, would prefer the convenience of merely reading information on a site without having to do any other action. In fact, it really wouldnt take much effort to type the information and it would make customers that much more likely to go to restaurant. On the other hand this section of the site does have a rather interesting feature, placed prominently on the right hand portion of the site is a button where customers can make a reservation to the restaurant, this is actually a rather brilliant idea since it encourages people to take action immediately rather than give them the option of changing their minds afterwards.

Use of Social Networking

It must also be noted that the restaurants use of a facebook and twitter social media sharing button is a very good idea. Not only does this help customers to tell their friends and family about the website but it acts as a free method of advertising for 1789. With more and more people integrating themselves into online forms of social media having this sort of tool on a website is almost a prerequisite in order to make its name known without having to utilize costly and expensive online and marketing campaigns.

Display and Functions

Another interesting aspect of this portion of the site is the graphic at the top half of the page which features are delicious looking dish of what appears to be meat, from my perspective this really would encourage people to eat at the restaurant since it looks quite yummy and delicious. Overall what I would recommend is that the restaurant change the way in which consumers view information on the site by placing all the names of food, what they consist of and how much they would cost on the food and wine page in a written rather than downloadable format.

Furthermore, it is recommended that the company increase the number of food items on display in the food and wines section, the reason for this is quite obvious, if people are to enticed into eating in a particular location it is usually a good idea to show pictures of more than just a few food items so as to create a visual buffet for them to make them hunger and year for the food even more. It must also be noted that if 1789 remains insistent in having a PDF format for the menu there are possible ways to make less complicated Websites such as Scribd do offer free online services where a PDF reader can be embedded onto a website for free using their tools and as such this would enable customers to either download or read the PDF file directly on the site itself.

Just like the McDonalds, two Emirati brothers came up with a similar idea and established a restaurant in Dubai which started operating in 2009 though their intentions were long thought. Though they had the idea for a long time, the initials costs of setting up the business was a challenge and they had to take time to plan themselves.

They set a business by the name Wild Peeta that concentrates in making sandwiches of Shawarma depending on a customers requirement using different types of sauces and Peeta bread apart from making salads and desserts. Wild Peeta restaurant has expanded throughout the UAE as it successfully targets the retail market offering Shawras and other foods in their menu.

According to Duening (2009), entrepreneurship revolves around management of businesses or companies in a manner that is slightly different from traditional forms of management. Comparing the two approaches of management there are clear differences between traditional and entrepreneurial management and they include the following: traditional managers were closely monitoring the work of the juniors by assessing the effectiveness of the inputs, time members of staff are working, raw materials and financial budget while an entrepreneurial manager focuses on main concerns in the firm and use of the best talents and expertise.

This is due to the fact that modern markets are considering a wide variety of products and services. In traditionally managed firms, the manager delegates duties and responsibilities in a bureaucratic manner and all employees know their fixed roles. Reynolds (2007) argued that this is not the case in an entrepreneurial firm because the duty of the manager is selection of individuals and teams with respect to talent and creativity so as to provide innovative solutions to the market.

In a traditionally managed company, managers discuss and come up with ideas on how the company should run while entrepreneurial management, mangers act as facilitators and employees give propositions about external stakeholders, equipments to be used and systems to be used.

In a traditional firm, much effort was done to train managers to be leaders in the firm while entrepreneurial management advocates distribution of leadership in the entire workforce (Schumpeter, J. 2006). Furthermore, managers in a traditional organization had the duty of planning, but the main focus of an entrepreneurial manager is to come up with strategies that exploit market dynamics.

The two owners of the restaurant have portrayed entrepreneurial management skills as revealed by their involvement in the business sometimes doing the work of employees and serving customers as they inquire improvements that can be added to the business (Livingston, J. 2007, p.122).

Concerning independent entrepreneurship, the owners of this restaurant are highly motivated. There are factors that boosted the starting of this business and they include: first, the entrepreneurs of this business had a liking for food which was the biggest driver for them to set up the business in addition to benefiting the society, making profit and sustaining growth of the business.

Secondly, the owners of the business are engaged in activities of the business like cashiering, serving customers and preparing shawrmas, thereby, they create an opportunity to be in contact with customers and employees. Concerning risks, the owners of the company set up their business despite risk in the market that includes competition, goodwill and others.

Before the business was fully operational, the owners of Wild Peeta encountered failures that drugged their business idea to start after seven years which was majorly a challenge with finances. But with determination and focus, they managed to implement their business idea through assistance from Mohamed bin Rashid Foundation. Time orientation is a basic necessity in entrepreneurship, there must be short time for orientation, planning and future growth and changes that might occur (Shane, S. 2003, p. 44).

References

Duening, T. (2009) Technology Entrepreneurship. New Yolk: Academic Express.

Livingston, J. (2007) Foundations at Work. Berkeley, CA: Apress

Reynolds, P. (2007) Entrepreneurship in the United States. New Yolk, NY: Springer.

Schumpeter, J. (2006) The Economist. The Economist Newspaper. Web.

Shane, S. (2003) A General Theory of Entrepreneurship: The Individual Opportunity. Cheltenham: Edward Elga.

Introduction

Author Shirleene Robinson, in her article, Inventing Australia for Americans: The rise Outback Steakhouse restaurant chain in the USA, argues that, the Outback steakhouse chain of restaurants is presenting an outdated and unreal picture of Australia wherever these restaurants are stationed in the world.

According to her, the restaurants thrive by positioning themselves as the ultimate peddlers of an Australian experience, yet the food served, the owners of the restaurant, the advertisement models, and all other entities related presented as Australian in these restaurants are not. Therefore, according to her, Outback Steakhouse is a fraud. However, the author overlooks the fact that all businesses sell ideas, or the role of sound business management and outstanding customer service in maintaining profitable restaurants.

Profit Motive of All Businesses  To Sell an Idea

The owners of the Outback steakhouse chain of restaurants are, above anything else, businesspersons keen on profits. The function of any business enterprise is to make profits. Therefore, all actions that the owners of these restaurants take are solely aimed towards maximization of profits.

As such, to expect the Outback steakhouse restaurants to present a realistic and more accurate picture of Australian cuisine, lifestyle and beliefs in the general ambience of these overseas restaurants misses the point. The owners of these restaurants are not cultural ambassadors, and since their interest lies in making profits, all cultural ideas that attract more clients and thus increase profits will be adopted. Whether these cultural representations are realistic, true or accurate is never highly considered by business executives.

The Outback steakhouse chain of restaurants is not the first to purport to offer a customer experience based on myths, or disputable ideas. Indeed, the entire goal of any business enterprise is to sell an idea (Soederberg 506). When the client buys the idea, the veracity of this idea, especially concerning its exact accuracy, is moot.

When McDonalds and the many fast food restaurants in the western world sell their food and drinks to their clients, they sell an idea as much as they do the food. The idea of freedom, choice, and independence is also packed into these food sales. When an insurance agent tries to convince a client to buy insurance, the agent sells the idea of security to the clients. Therefore, businesses, whether offering goods or services, are inherently selling ideas and beliefs to their clients.

According to the article, the owners of Outback steakhouse restaurants, who are all American, chanced upon the idea of opening up Australian themed restaurants in the US after watching the Australian movie Crocodile Dundee gain unprecedented fame in the US and other countries.

The movie, whose main character is Paul Hogan perpetuates the view of the typical Australian male being carefree and intensely masculine, while Australia as a country is depicted as wild, unexplored and welcoming. These images of both Australian males and Australia as a country contributed to its widespread fame as much as the plot, characters and the storyline of the movie did. In this particular case too, the producers of the movie sold an idea.

Therefore, when the founders of the Outback steakhouse embarked on their project of opening up Australian themed restaurants, they wanted to capitalize on the popular image of Australia perpetuated by the movie.

This much the author of the article acknowledges. Therefore, if the original purpose of the owners was to continue a mythical popular idea propagated by the movie Crocodile Dundee  and other popular distortions of the masculinity of the Australian male in books such as Australian Legend by Russell Ward  then the blame, if at all anyone is to be blamed, lays beyond these owners.

The Power of Advertisements  Exploiting the Masses Ignorance

Secondly, to a certain degree, the owners of the Outback steakhouse are exploring the ignorance and lack of international exposure of American citizens. According to statistics quoted by the author in her article, only 27% of Americans own a passport. Out of these numbers, a much smaller margin may have travelled to Australia, much less lived there long enough to have an idea of what a true Australian cultural experience may be.

Therefore, the owners of the Outback steakhouse know well enough that inaccurate representations of Australia within its restaurants in the US and elsewhere are unlikely to come under scrutiny. Even though the US plumes itself as a citadel of liberty and democracy, a closer scrutiny of its citizenry reveals a nation largely guided by what it sees on television and reads in the mainstream press, and is thus largely ignorant.

Many citizens of the US hardly bother with what happens beyond their borders. For instance, the US has one of the lowest voter turnout rates in the western world, with only 56% of voters having turned out to vote in the 2004 presidential elections (Niemi and Hanmer 305).

The picture of the US as a highly educated and informed society, which is what many neutral observers believe to be the case, is wrong. Therefore, US citizens easily buy into the idea of Australia propagated by the Outback steakhouse restaurants because they are none the wiser. However, if the popularity of the restaurants is anything to go by, then the idea (if not the service and food/drinks offered in the restaurants) seems to sit well with Americans.

Customer Experience as an Important Factor

Additionally, the author has overlooked the concept of customer experience in her criticism of the mythical and inaccurate depiction of Australia as done by the Outback steakhouse restaurants. Although many first time clients of Outback steakhouse restaurants may be pulled by the restaurants promise of delivering the ultimate Australian experience, future visits back to the restaurants will depend solely on the customers experience, which goes beyond the mere desire for a foreign and mythical experience.

Customer service, pricing, and other such unrelated but ultimately decisive factors play a monumental role in retaining customers (Ching-Shu 430). Indeed, even if the restaurant were to offer real Australian food, employ only Australian nationals, sell only Australian beer, and even build its restaurants in Australian architectural design, if the customer service were poor, the customers would unlikely return.

Therefore, the popularity of the Outback steakhouse restaurants goes beyond the mere fact that they promise an exotic (Australian) experience, it most likely has to do with the restaurants ability to serve customers in a professional and hospitable manner. Similarly, if the restaurants were to be accurate in their portrayal of the Australian experience, yet charge exorbitant prices for their service, they would unlikely attract more customers.

Conclusion

Therefore, in conclusion, the popularity of the Outback steakhouse restaurants in the US goes beyond the mere fact that these restaurants purport to deliver an Australian experience for their clients. Their popularity has to do with sound business practices geared towards profit maximization, powerful advertising that captures a susceptible client base, and a comprehensive customer experience that makes clients return for the same.

Works Cited

Ching-Shu, Su. The role of service innovation and customer experience in ethnic restaurants. Service Industries Journal 31.3 (2011): 425-440.

Niemi, Richard, and Michael Hanmer. Voter Turnout among College Students: New Data and a Rethinking of Traditional Theories. Social Science Quarterly (Blackwell Publishing Limited) 91.2 (2010): 301-323.

Soederberg, Susanne. Taming Corporations or Buttressing Market-Led Development? A Critical Assessment of the Global Compact. Globalizations 4.4 (2007): 500-513.

Nature of Competition

Firstly, the nature of the competition has to be described to determine the overall construction of the market and industry. The restaurant business is highly competitive due to the strength of the existing firms and a variety of the services coverage (Williams 128). The presence of this matter can be determined by the loyalty of the customers to the particular brand due to its well-established recognition and assurance of the quality (Williams 128). In this case, it could be said that the entry barriers to entry remain low, but the companys growth and survival are dependent on its level of flexibility.

Key Success Factors for Competitive Success

As for the determiners of success, one of them is the continuous necessity of evaluation of trends in the hospitality industry. For instance, the current trend is related to the growing popularity of healthy eating (Anderson 131). Consequently, it has to be depicted as a core element of the strategy to assure profitability. Another matter is continuous attention to the establishment of sophisticated marketing campaigns to portray the novelty of the place. This aspect will contribute to the growth of the market share and the ability of the company to attract new customer segments to its locations.

Competitors

The primary rivals of Panera restaurants are MacDonalds and Darden Restaurants. In this case, the critical strength of both competitors is the high brand recognition, as McDonalds is a multinational company with its distinctive restaurants in an extended number of countries (Kasperkevic par. 7). In turn, Darden restaurants have a well-develop customer base across the United States of America while increasing brand image by acquiring recognized brands (Darden Restaurants, Inc. par. 1). Nonetheless, the primary weakness of McDonalds is decreasing consumers preference for fast food and the subsequent decline in sales (Kasperkevic par. 4). Nonetheless, the principal drawback of Darden restaurants is a high diversification of the focus (Darden Restaurants, Inc. par. 1).

As for the moves, it is apparent that the companies tend to adopt their strategies to the constantly changing environment. For instance, McDonalds has introduced new components of the menu, which have a tendency corresponding with the growing consumers interests to healthy eating (Lutz par. 1). In turn, Darden Restaurants enhanced its international presence while introducing the franchise scheme globally (Darden Restaurants: International Franchising par. 1). It remains apparent that the rapid development is the necessity in this sphere, as, otherwise, the restaurant chains will lose their market share to the competitors with the innovational productions and affordable prices.

As for the competitive actions, it could be said that McDonalds healthy campaign can be regarded as one of them, as the company modified its strategy to attract the individuals who consider healthy eating habits of high importance (Lutz par. 1). In turn, the presented above introduction of the franchise by Darden Restaurants and continuous expansion of its facilities has a beneficial influence on the companys performance. In the end, it remains apparent that the flexibility of the competition cannot be underestimated, as it contributes to the development of sufficient entry barriers.

Conclusion

It could be said that it was revealed that the competitiveness analysis is critical for the understanding of the current trends and the companys position in the market. In this case, Panera restaurant has to understand the strength of its competitors, as they tend to occupy a significant share of the market and have high recognition worldwide. Nonetheless, the organization can utilize the weaknesses of the rivals as a benefit for the development of its competitive advantage. In turn, the company has to be able to adapt to the constantly changing environment while adjusting its services and products to the consumers preferences.

Works Cited

Anderson, Erick. Everyone Eats: Understanding Food and Culture, New York: New York University Press, 2014. Print.

Darden Restaurants, Inc.: Darden Restaurants Completes Acquisition of Yard House USA, Inc.  Mergers & Acquisitions Week. 2012. Web.

Darden Restaurants: International Franchising. 2016. Web.

Kasperkevic, Jana. Still Not Lovin It: McDonalds Sales in US Drop for Seventh Quarter. The Guardian. 2015. Web.

Lutz, Ashley. McDonalds has stopped trying to convince people its food is healthy. Business Insider. 2015. Web.

Williams, Chuck. MGMT: Principles of Management, Boston: Cengage Learning, 2016. Print.

Comparison of Cambridge Suites Hotel and Hampton Inn by Hilton Hotel

A study of the two named hotels indicates a large difference in the prices of their services. Cambridge Suites Hotel records higher prices in all their services as compared to the same services offered by the Hampton Inn hotel though both hotels occupy the same locality in Sydney. The table below represents the results of the statistics recorded.

Table 1: A difference in the prices of services offered in Cambridge Suites and Hampton Inn (Andreyeva, Long, and Brownell, 2010).

Cambridge Suites Hotel has higher prices than that of Hampton Inn in all services provided. This is due the location of Cambridge Suites in an area inhabited by rich people as compared to those living in the area surrounding the Hampton Inn Hotel.

Comparison of Napoli Pizzeria and The Olive Pizzeria Bistro restaurants

Napoli pizzeria is located at 465 Charlotte Street while The Olive Pizzeria Bistro is located along the Sydney port Access Road. The two restaurants mostly operate in fast moving foods such pizza, cheese, pepperoni, and pepp-cheese among others. The table below summarises the results of a study on the prices of different commodities

Table 2: Comparison of the prices of foodstuffs in Napoli Pizzeria and The Olive Pizzeria Bistro (Hayes and Ninemeier, 2004).

Other hotels and restaurants in Canada

Grey Eagle Resort, a modern hotel in 3777 Grey Eagle Drive Southwest, T3E 3X8 Calgary, Canada offers a series of highly recommendable services and is one of the most preferred hotels in the area. Even though it has higher prices as compared to the two studied hotels within Sydney, it attracts a good number of Canadian tycoons and others from the world over. In Grey Eagle Resort, a living room inclusive of breakfast goes for 84 pounds for a single night per person. This is much higher than the hotels in Sydney. Consequently, other services such as meetings, weddings, and events are also more expensive.

Raymonds Restaurant, in the eastern Coast of Canada, also experiences higher prices in their services with the cheapest pizza amounting to $8.50. Generally, the costs are higher than hotels in Sydney. Hayes and Ninemeier (2004) note that a seven-course tasting menu runs from $125 and five-course menu at $100. However, the restaurant attracts a high population of rich individuals with higher profit margin recorded in 2014.

Price comparison of International hotels and restaurants

A study of international Hotel Calgary indicates even a quite higher prices of the services offered. The rates for suites in the hotel start from $119 per person per night. Consequently, dining and events rates are also higher than that of the hotels in Canada, with the starting rate being $112. According to International Hotel Calgary (2015), Catering and weddings are also expensive with the rates calculated per hour.

Thrillist restaurant in the Middle East is one of the restaurants that attract a greater population regardless of its high prices on goods and services. However, it maintains additional services that keep most of its customers regardless of high prices. The lowest rate is $ 14 for a pizza.

Justification of the higher prices by companies

Evidently, companies that charge relatively higher offer modernised and highly improved services that meet their clients taste and preferences. For instance, Cambridge Suites Hotel provides ample rooms for meetings and events organisation with different set of sitting patterns enabling the client to choose the design of their own interest. Consequently, in the event of the meeting, Cambridge Suites provide meeting WI-FI, flip chart and markers, and all day non-alcoholic beverages among others. One of the distinct methods used by Hampton Inn is individual pricing during the meeting if need be and offers for audio-visual systems. My visit to these expensive hotels and restaurants proved provision of extra services and, therefore, a justification of the higher prices (Andreyeva et al., 2010).

Most companies that offer services of higher products offer other free services such as free high-speed internet, free breakfast, pet friendly services, and accessibility to kitchenette where the client can prepare some other foodstuffs apart from those provided by the hotel. Cambridge Suite and Hampton Inn, for example, provide free breakfast and internet to their clients and therefore a need to maintain high prices for their services. I realised that the more a hotel becomes expensive, the more improved are its services. I, therefore, concur with the concept higher prices directly relate to better services.

Other factors affecting price by hotels

The sales of the products in the hotels in Sydney and the world over depend on other factors both within and outside the concept of the company. Outlined below are some of those factors that determine the price of a commodity or service especially in a hotel:

The development cost

Any person offering a service or a product would not be willing to sell the product at a lower cost than the initial production cost. The main aim of operation is to obtain profit. The total cost of production inclusive of tax and other expenditures determines the actual unit cost of a commodity or service. Consequently, an introductory price is always high due to higher in innovative processes and heavy investments into research and development of the new product.

Economic trend

Economic factors such as labour cost, taxation rate, inflation rate, currency exchange rate, and governments fiscal and monetary policies positively or negatively influence the price of a product or service. For example, a higher taxation of cheese would generally contribute to a rise in the prices of all the restaurants that offer cheese-related products.

Class of the targeted customers

The class of the targeted customers affects the pricing of services and products. There exist three classes of people; the rich, middle class and the poor. A product or service that targets the rich commands a higher than those targeting the middle class. The rich usually render a low-priced service or product valueless; therefore, it does not attract many buyers or attendants. Cambridge Suites Hotel, for example, targets the rich and this contributes to the higher prices of its services to maintain the pool of its customers.

The level of demand

A higher demand than supply of a product or service creates a scramble for the limited available services. Consequently, the products inflate leading to higher pricing of the commodities. Therefore, a product developer must understand the market trend about the demand and supply.

References

Andreyeva, T., Long, M. W., & Brownell, K. D. (2010). The Impact of Food Prices on Consumption: A Systematic Review of Research on the Price Elasticity of Demand for Food. American Journal of Public Health, 100(2), 216-222. Web.

Hayes, D. K., & Ninemeier, J. D. (2004). Hotel operations management. Upper Saddle River, NJ: Pearson/Prentice Hall. Web.

International Hotel Calgary. (2015). Calgary Hotels Downtown. Web.