Blackshop Case Study
Blackshop is a popular casual restaurant in the area of Cambridge. It is a well run business in quite a competitive market. However, in a competitive market, proprietors of a business must do what is necessary in order to remain competitive and “maximise the number of guests” (Cerny). Blackshop must decide whether or not the Open Table system will allow them to gain a competitive advantage, and if so, what sort of operational strategy needs to be implemented for it to be successful.
Issues that need to be addressed are whether Open Table systems such as the new reservation system and the table management system will, in fact, leave Blackshop with a competitive advantage. Blackshop should adopt the Open Table system.
This upgrade in technology at Blackshop will allow them remain competitive via a new reservation system which utilizes benefits of the internet, adopt a targeted marketing system through emails, gather information on customers to enhance customer satisfaction and help with facility layout problems that occur through the old reservation system.
Blackshop will also need to refine its operational strategy. In a competitive market, a company must structure its company in order to meet its service concept. Operational strategy will include areas such as marketing techniques, employee selection and job satisfaction. It will also outline ways in which Blackshop can improve customer satisfaction through process control. The Open Table system is able to address areas that are important to a firm in order for it to remain competitive or gain some competitive advantage.
Customer satisfaction is one of the main areas that allow competitiveness.
It is now recognised “as a primary goal on the path to profitability”(j8) and can be defined as “a evaluative response concerning the perceived outcome of a particular consumption experience”(j1). The Open Table system allows a restaurant to enhance the customers’ satisfaction through a numbers of avenues. Firstly, the reservation system allows potential customers to not only call up the restaurant to book a table, but it also allows the customer to utilize the internet to “make reservations without any temporal or geographical constraints”(P+D).
This type of reservation system can also be used to collect detailed information about their customers.
Information such as birthdays, anniversaries and special requests can be readily available to employees which can be used to enhance the customer experience and create a far greater guest management system. It allows the employee to construct “interpersonal bonds” with customers, creating the perception that “the employee has personal recognition of the customers’ needs and knows specific details about his or her service needs” (j5). Open Table also contributes to customer satisfaction with its advanced table management system.
Having a system that allows Blackshop to maximise seat utilisation “effects efficiency of the process as well as creating good ambience”(j6). Blackshop have noticed bottlenecks forming in the wine bar during busy operating times. This is created because many of the customers are walk-ins and have to wait for a table to clear up.
Waiting a long time for a service can lower customer satisfaction, resulting in less repeat business. The new table management system allows patrons to be seated in an earlier manner, thus alleviating some of the problems created from walk-ins.
It is for these two reasons that a restaurant should be able to create “one of the most powerful promotional methods used in hospitality”(p+d). Word-of-mouth promotions are satisfied customers recommending the restaurants to potential customers. An integral part of word-of-mouth is gaining a customer’s trust. It is said that “customers trust in employees is likely to form if the employee and customer are well know to each other”(j5).
As alerted to previously, knowledge of customer needs and personal information forms the basis for a closeness that must exist in order for the customer to “engage in word-of-mouth behaviour”(j5).
This is a very powerful as “a single recommendation, the only source of information obtained, is enough to convince a person to try a particular service provider”(j5). Many firms attribute their success to word-of mouth, with Harley Davidson saying “positive word-of-mouth communication emanating from customer employee relationships can be attributed to most their success”(j5). Open Table also has a powerful marketing tool through the use of promotional email system.
This email system can be used to create avenues to repeat business by alerting customers to Blackshops regular food events.
This is also a great way to generate word-of-mouth promotions and enhance customer/employee relationships. Operations Strategy Operations strategy describes “competitive priorities that internal operations will emphasize”(text). It is also how the company “should be structured in order to meet its service concept”(text). The service concept of Blackshop will detail “the reason as to why a customer will choose one service over a competitors”(text). Blackshop service concept should be superior customer service and satisfaction through quality process control.
This can be undertaken by firstly implementing the Open Table system.
Blackshop must make sure that all members of staff have been fully trained on how to use the Open Table system. Benefits must be explained fully so employees feel comfortable using it to enhance customer satisfaction. As I believe customer satisfaction to be the important part of success, this should be completed before any other areas of the operations strategy are implemented. It creates word-of-mouth promotions and encourages repeat business. As quality of service is a huge competitive priority, Blackshop must continue with its stringent employee selection policy.
The importance of selecting the right employee to work at Blackshop cannot be understated as many “US casual restaurants learn to view their employees from a new prospective – as strategic human capital which possesses intangible assets that are valuable to the firm”(strategy risk). Restaurants that take this view have the “potential to build a human resource competitive advantage”(strategy). Employees chosen to work at Blackshop must show a certain enthusiasm towards the company’s service concept. The operations strategy must also include a tailored marketing plan towards its target market.
The Open Table system offers powerful email marketing campaigns that can be tailored towards its target market.
However, this is only useful as a way of targeting repeat customers as their information is the only available. The Open table website also includes important information such as; location, price, menu and operating hours. I believe this is not enough to encourage new customers to book at Blackshop. As an initial solution Balckshop must first train some of their employees to use information technology systems for marketing campaigns. Training marketers to use information technology systems and having marketing reports are the most urgent and important tool for the future of marketing in the hospitality industry”(progress and dev).
This means having employees construct and maintain a dedicated Blackshop website that offers more information and flare to that of the Open table website. Employees should “not only create their own website, but to ensure that their website is visible and easily found by search engines”(Progress and dev). Having a dedicated website also eans that they have a new avenue to reply to customer comments. Being able to swiftly respond to customer feedback means Blackshop can “gain the trust of customers and therefore more chance of repeat business”(progress). The marketing campaign can also include current campaigns that are being undertaken by Blackshop, however, there must be a review of current content. Major discussion regarding hospitality marketing is mainly concerned with “rational versus emotional”(j4) advertising.
That is, what appeals more to the consumer?
Studies have found that “for experiential services such as restaurant meals, the hedonic nature of the consumption experience may make emotional appeals more effective”(j4). Rather than advertising price information or convenient location, they should use their marketing tool to convey a message of relaxed family atmosphere with live music and great food. By employing these marketing techniques they are “creating a positive post exposure attitude”(j4) for the potential consumer, leaving them with no doubt that they should indulge in the experience that Blackshop offers.
That is not to say that Blackshop should not appeal to the rational side of consumers. Price information strategy in advertising “can greatly reduce the level of pre-purchase perceived risk which tends to be high with many services”(j4).
It appeals to consumers that need to “understand the service and want to know what they are receiving before making a purchase decision”(j4). Rational advertising can also be an effective way to fill table space on quieter nights.
Email marketing can also be extremely valuable is reducing the bottleneck effect at wine bar by “providing information about less crowded periods or shorter waiting times, and customers encouraged to utilize them”(j2). Instilling a sense of job safety and creating a workplace where employees can thrive and grow is vital for job satisfaction. Blackshop needs to introduce strategies in its operations that allow this to happen because there is a “positive linear relationship between staff satisfaction, service quality and customer satisfaction, leading, ultimately, to profitability”(j7).
Firstly, Blackshop must empower the employee in the workplace. In many hospitality workplaces “quality is centred on guest satisfaction”(strategy), because of this “managers and staff should not only be empowered, but compelled to do whatever it takes to make it right… on spot”(strategy).
Empowerment can also continually let your employees grow within a job, increasing job satisfaction with the company. Continuing along the path of job satisfaction, Blackshop can also introduce employee ownership programs and promote within the company. Employee ownership programs give their job a sense of meaning, and a sense of fairness.
Programs like the managing partner programs can be “the cornerstone of success, allowing you to attract the best”(strategy). As referred to earlier, this can lead to a “human resource competitive advantage through superior human capital”(strategy). Blackshop must seriously consider introducing the Open Table system.
The benefits of introducing it centre on a better table management system, a new and improved reservation system, and a powerful email marketing tool. It allows Blackshop to have greater customer satisfaction through a higher level of process control, utilizing information technology systems such as the internet.
Open Table is also an information gathering tool, proving huge benefits for company. Employees can create “interpersonal bonds” with guests, gaining their trust, which can lead to word-of-mouth promotions. All of which can lead to more customers which fulfils the manager’s job of “maximising the number of guests”(cerny). Balckshop’s operational strategy should first introduce the Open table system.
After which, all employees should be fully trained on the new system. Having employees understand the new reservations system and table management system are the key to the continued success and growth of Blackshop.
Blackshop should continue to use its system of stringent employee screening programs so that they employee the person who best fits in line with the service concept and operational strategy. After completing this stage of the process, management need to address their marketing program. This should begin by entrusting one or more of the employees with the marketing manager position.
This involves starting up a company website with all relevant information on it and deciding on new marketing themes for different advertising mediums.
The marketing approach must consider emotional and rational appeals. It must appeal to people through rational information such as price and service excellence, but more importantly, it must appeal emotionally to the customer. The operations strategy must also involve programs or fundamental ideas that create job satisfaction. This can be done through promoting within, empowerment in decision making and employee ownership programs.
Creating and operational strategy that “links together well with available resources will determine the final outcomes yielded from a rersource”(j6).