Monday, December 23, 2013

Consumer Behavior in the Restaurant Sector


Some time ago, I read an excerpt from a book about consumer behavior in the restaurant sector and noted that the detail found there was more broadly applicable to customer service.   I put the book on my reading list, and it's taken some time to get around to it - and I found quite a bit more of the same.

I've often used the restaurant as an example in discussions of customer service because it's common enough to enable readers to concretize some of the more esoteric discussions about the qualities customers seek in a vendor.  On closer inspection, I've found that the culinary industry to be extremely complex in terms of service, and likely one of the most multifaceted kinds of commercial operation.

In the simplest sense, a restaurant stand squarely in the blurry boundary between goods and services, and it's fairly easily to recognize that while the good (the food itself) is central to the customer's expectation and evaluation of quality, a restaurant meal also has many of the qualities of a service that are also critical factors that, depending on the individual and the occasion, may overshadow the quality of the good in these evaluations.   This, too, seems entirely portable to a broad array of commercial operations.

Quality of Good

In a previous post, I explored the factors that lead to consumer perception of the quality of a restaurant meal: its adequacy to satisfy the present appetite, its nutritional value that satisfies more long-term goals, and a combination of factors (flavor and presentation) that create a pleasant consumer experience.

These factors are not universal, but differ from one customer to the next and even an individual customer may weight them differently from one occasion to the next.   As a result, the food-service industry has spawned a multitude of retail formats, from the pushcart to the luxury restaurant, that focus on the factors to differing degrees, but which can be generally categorized into standard fare, utility food, fine dining, and specialty food service according to the degree to which each of these three fundamental factors are emphasized.

My sense is this perspective can be transported, with some translation, to any retail operation: whether you're selling a restaurant meal, a screwdriver, a jacket, an automobile, a haircut, or tax preparation services, these same three factors apply.  The perception of the quality of a good is still assessed by its short-term serviceability, its durability over time, and factors related to the pleasure of the experience derived directly from the use of the good.

Quality of Service

While the qualities of a good are fairly straightforward, those of a service are much more difficult to identify and are more subjective and variable.   In reading about the food service industry, there are generally four factors that are considered:

  • Delivery - Those elements of a service that are functionally necessary to the delivery of benefits, of which reduce the effort and inconvenience to the consumer
  • Atmosphere - The character of the environment in which service is provided, which includes the space itself as well as any items that are perceived to be a part of the environment (furnishings, decor, and physical elements encountered in the service experience) as well as that of secondary spaces (waiting rooms, bathrooms, and the like)
  • Staff - The conduct and demeanor of employees that the customer is likely to encounter during the service experience, but also before and after the experience itself.
  • Company - The conduct and demeanor of other customers, both those within the individual customer's group and in general, who not only impact the immediate experience by their interaction, but also define the tone of the venue.
  • Esteem - The social benefit of utilizing the service, whether it is to differentiate the consumer from others (generally, to elevate themselves by virtue of their consumption) or to identify the consumer as belonging to a specific group of others (to assert that he "belongs" in a specific venue merely by being there and appearing comfortable)

Likely some of these elements are transferrable not only to other kinds of business, but also to the goods sector.   While they are often considered to be factors that are outside the control of the business (in terms of esteem, a person is looking for others to react to their conspicuous consumption of a good in whatever environment they happen to be when it is consumed), they can and should at least be considered.

Price of Service

The one factor that the author largely avoided was a candid discussion of pricing concerns, except to emphasize that businesses that seek to compete on price often neglect or consciously sacrifice the good and service quality of the customer experience.  Moreover, customers have certain expectations of the quality of a service as a factor of the price, and are often tolerant of these compromises - to the point that a lowered quality of good or service is expected within a given price range.

That is to say that a customer who plans to dine in an elegant restaurant has certain expectations of the quality of service he will receive as well as expectations of a correspondingly higher price - but when the same customer approaches a quick-service restaurant to grab a quick bite while shopping, the expectation of quality is much lower in every regard, as is the expectation of price.

Specific to the food industry, the fast-food format was mentioned and while it was sneered upon for negligence to virtually every factor of quality, there was some respect for this choice as a commercial operation: some customers, in some instances, value a fast utility meal over a leisurely and sumptuous dining experience - and going by the commercial success of the quick-service sector, it's quite many customers in quite many occasions.  So while they may be derided for the quality of product and service, they are in effect catering to the market's demands and performing a necessary function in society and the economy.

***

This meditation seems at once long-winded and superficial, but underscores the value of the food service industry as a basic example to which most people can relate, and which demonstrates the complexity of a commercial operation in a manner that is transportable to a wide range of goods and services.

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