Marketing Project

CASE STUDY

Case Study:

Q.1. Critically analyze what the customers’ service expectations are from restaurants such as Raju Omlet? How did these expectations develop?

Ans. At the moment, customers have a broad choice of eatery services to choose from

and

service

quality

conditions

certainly

persuade

a

restaurant competitive advantage. Service quality is a significant aspect for restaurants, hence; research associated with service quality, customer satisfaction and behavioral intentions in the restaurant industry has been growing (Bojanic & Rosen, 1994, pp. 4-14). Raju Omlet targeted the college students, males who live away from their families and women who come along with their families to discover the variety of foods available here, thereby creating awareness of this place to others and this helps in knowing more of the local cultural foods. The prices of their foods were quite reasonable when comparing to their competitors. Raju Omlet faced competition on the basis of serving and not product offering. The sense of serving of Bombay Chowpatty, Chappan Bhog, Bikanervala, Kulcha King and Mumbai Restaurant were all similar to Raju Omlet, except that all these eateries had outdoor catering, dine-in, take-away and home delivery options. However, the prices at these restaurants for an average meal for two were quite expensive when comparing to Raju Omlet.

Mostly customers of all classes, the high-class, middle class or lower income people were able to enjoy the high quality of food provided here. The people came know about Raju Omlet Restaurant because of its magnificent advertising and recreating the traditional dishes of Vadodara. Motivation is necessary for the success of any company. Likewise, Rajiv, the owner of Raju Omlet restaurant was motivated to work hard for the 1 | Page

whole community Dubai. With a lot of effort and time put in, Rajiv was able to make the Restaurant a big success. All his staff members were equally motivated. They were provided training on how to treat their customers, they were told to remember their regular customer’s names, and they were also instructed to change the dish immediately if anyone lodged a complaint. Customers usually expect a good service from any restaurant they go to. Similarly, if the staff of Raju Omlet creates a good rapport with their customers, people will want to come more often to Raju Omlet. Learning helps gain experience and is also important as it helps one to develop the company. There are two theories coupled with learning which is the behavior learning theory and the cognitive learning theory. The behavior learning theory is based on how the customers respond to the environmental stimuli and is assumed to be passive. Cognitive learning theory focuses on the inner mental activities. This is to open the minds of the customers and put in one’s products into their minds. For example, in this restaurant, the owner tries to convey to the people of United Arab Emirates that his restaurant brings out the local flavors and has good food and artwork. To make customers come, they made innovative radio advertisements, by instilling in them the various benefits of egg preparations and that egg could be eaten as a meal and not snack alone. Three components that contribute to overall customer satisfaction with any restaurant are good food, good service and a pleasant setting (Susskind & Chan, 2000, pp. 56-63). All of these factors have influenced the customers and because of the Restaurant’s innovative ideas and its uniqueness, Raju Omlet has become popular in a short span of time.

Q.2. Formulate the Unique Selling Points of Raju Omlet. What brand image did Raju Omlet develop during its start-up period and how was this image established?

Ans. Raju Omlet’s Unique Selling Proposition or Unique Selling Point (USP) was its specialization in egg preparations. The menu was exclusively 2 | Page

made up of eggs in diverse forms – scrambled, boiled, shredded and halfboiled (Bootwala, 2013). The founders of Raju Omlet made it a point to retain the ambience of humble roadside eatery through furniture and utensils such as petro-max lamps and kitschy kettles and cups, so that this restaurant matched the magnificent beauty of a city like Dubai. Many egg-inspired quotes and brightly colored walls added to the exceptional style of Raju Omlet. During the start-up period, like any other business ventures, Raju Omlet too faced many problems. Many internal and external factors affect the business. Internal environment features the elements within the company, such as current staff and management.

These factors are

generally controllable because they remain within the boundary of the company. External environment refers to the environment in which there is indirect influence on the organization. These are usually not within the control of the business. External factors mainly include: political, economical, social and technological factors. Political factors refer to the degree of the government getting involved with the matters of the organization. Raju Omlet Restaurant faced the problems in the starting mainly due to the political factors alone. Mr. Rajiv wanted a gas cylinder connection as the prices are fixed and will be much easier and feasible to handle. However, the Dubai Municipality insisted that he should opt for a pipeline connection itself.

Economic factors include economic growth,

interest rates, taxation, and exchange rates. It also includes inflation. In case of being economical, Raju Omlet has been very economical in terms of the prices of each dish. The main target audience was Indians and Pakistanis as they have similar eating habits. This proved to be a advantage for Raju Omlet, as they are many Indian expatriates in residing in Dubai. Social factors include cultural aspects, population growth and also the changes in the trends of the society. Raju Omlet provides their customers with local indigenous touch by serving them with variety of both local and Indian flavors. They also create a very comfortable ambience by having a countryside setting at the prime location of Al3 | Page

Karama. In case of technological aspects, research and development areas are explored thoroughly. The best way to know what consumers think about the organization is to create an online page and put in a suggestion column. Raju Omlet was able to create an excellent brand image from the very beginning itself due to the positive word-of-mouth publicity. Mr. Rajiv like most of the entrepreneurs believed in few religious beliefs, one being; inaugurating the cash box on an auspicious day. As the new restaurant came into being, customers started to flock in and since Rajiv did not want to disappoint his customers, he ensured that every customer that came ate to his or her heart’s content. The customers found this concept interesting, as for now they could eat as much they want without paying anything. Many customers came in just to see if this was actually being carried out. All the customers were pleasantly when they were served free food. For ten days, this practiced had continued and hence, Raju Omlet was able to establish its name. Q.3. What would it take at this restaurant to ensure that customers are highly satisfied? How valuable is highly satisfied customers in the restaurant business and why? Ans. Customers views and suggestions are very valuable not only to restaurant business but also to all other business ventures. In a progressively more competitive environment, all the restaurants must be customer leaning. Customer satisfaction represents a contemporary approach for excellence in business lives (Philip, 1997). As far as Raju Omlet is concerned, customers are their first priority. Mr. Rajiv, founder of Raju Omlet has quoted, “We offer fresh eggs cooked with high quality cooking ingredients and provide value for money”. And true to his words, he is totally against providing low-quality products to their customers. He constantly began searching for high-quality products for his customers. He started sourcing fresh eggs and signed an agreement with the local poultry farm, Al-Jazeera Poultry, even though he had to face more expenses almost up to 30% more than other suppliers. By doing so, he 4 | Page

has been able to provide high-quality products at reasonable rates. An average price for a meal for two at Raju Omlet is Dh 45. Customer satisfaction is defined as a customer’s overall evaluation of the performance of an offering. This overall satisfaction has a strong effect on customer loyalty intensions (Anders, Michael, & Inger, 2005). Every organization must work towards achieving a competitive advantage. To thrive in building competitive benefit, an organization or business ventures like Raju Omlet or any other restaurants must provide what buyers identify as “superior value”, that is either a good product at low value or enhanced product that is worth paying more (Porter, 1985). The key issues in developing competitive advantage are; creating customer value, building long-term relationships and maintain customer satisfaction throughout. Up to an extent, Raju Omlet has been successful in preserving the interests of their customers. In order to ensure whether Raju Omlet’s customers are satisfied with their services, they have to undertake certain public relations and advertising campaigns, so that they can understand what the customers feel about Raju Omlet and also what more they have to do in order to remain the customers first choice in the list of restaurants. A PR campaign strategy normally includes statement of objectives, situation analysis, specification of target audiences, messages to be communicated, specific program elements to be used, timetable and budget and finally details of the program evaluation. Every PR campaign must have a clear message, concise and understandable. This is essential because it is the attitude forming

process

and

they

demonstrate

the

effectiveness

of

communication. One can use media relations, events, interviews, blogger relations,

presentations,

consultations,

newsletters,

competitions,

podcasts, stunts, websites, conferences etc. to put across the messages to the targeted audience. In case of Raju Omlet, the advertisements provided at two different radio channels have played an important role in creating awareness about their special offerings. Raju Omlet, by the medium of radio told the customers various health benefits of eating eggs. For this 5 | Page

campaign to be successful, Rajiv and Nakul (father & son duo of Raju Omlet), chose the correct radio channels and prime times for their advertisements. Hence, a very positive response was got from the public. They reached in large numbers for the high-quality food, good services and cozy atmosphere.

Q.4. Critically analyze what points should Raju consider before introducing the home delivery service? Do you think they should go ahead and introduce it, why or why not? Ans. Raju Omlet currently follows “No home delivery option” as the founders, Rajiv and Nakul are against the idea of letting the customers consume it’s offering by paying the same price for a diminished quality. While packing away the food stuffs, there is a drop in the fresh quality assured. Even when other restaurants have home-delivery options, Raju Omlet chose not to indulge in this practice, as for them quality is of main concern. This restaurant needs to streamline their offerings. That is they should just stick to a few food which is in consumer demand, and most importantly, they need to work on improving the quality of these foodstuffs. It is important to advertise in a style that accurately replicates what you are going to provide. It needs to consider the global impression that your posters or labeling create. Consumers look for protection, which is based on the sensitivity that the brand is reliable and looks to their best interests. Restaurants should be observing the quality of the foodstuffs they are selling. A specialty restaurant is an eatery where the atmosphere and décor are geared to a particular type of food or theme (Webb, 2010). Thus restaurants such as Raju Omlet can be coined as a specialty restaurant. The service of food which is provided is based more or less on the same manner of the country from which the particular cookery originates.

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In Raju Omlet’s case, it keeps in mind to mix the roadside handcart eatery of Rajubhai’s omelet experience into the modern life of Dubai. If Raju Omlet considers introducing home-delivery service, there are many points to be kept in mind. Home-delivery means providing the customers the eatery ordered at their footsteps. There are both advantages and disadvantages while taking into consideration home delivery service. Few advantages being; by using the food delivery service, one can save time. In this fast phased world, most of them don’t have time to cook or drive all the way to their favorite restaurants. Another benefit of home delivery is that, once quality of food and speed of delivery is assured, one can regularly chose home delivery options and also get special discounts. However, there are a few disadvantages of home delivery too. One of them being, providing the food with supreme quality. For this, they will have to take on a vehicle, so that food can be transported to the customers. Since, egg preparations comes under the head of potentially hazardous products (products that consist in whole or in part of mil or milk products, which are capable of rapid growth of infectious microorganisms), the vehicle used for transporting must maintain temperatures at 140 degree Fahrenheit for hot foods and 41 degree Fahrenheit for cold foods during transportation. The vehicles used must be clean to protect food from contamination (Anonymous, 2000). Another disadvantage is that, sometimes the delivery man may bring in the wrong order which in turn will lead to a lot of time and energy being wasted. Instilling the home delivery service, may also prove to be expensive. Thus, a few customers are bound to find these prices not reasonable. One major disadvantage of home delivery is that restaurants will have to add artificial flavoring to their products so that they still look fresh. This can prove to be awful for health. Furthermore, if Raju Omlet tries its hand in home delivery, they will also have to keep in mind the hot climate of Dubai. Hence, delivery will be possible only in few destinations.

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Q.5. Rationalize whether Raju Omlet should purse a product development, market development, diversification, or market penetration strategy when considering their potential expansion into other parts of the UAE.

Ans. United Arab Emirates is considered as one of the safest place to live in and is known for its trade and business. As mentioned in the case study, “Dubai is called the “Melting Pots of Cultures’ and is home to people over 200 nationalities.” Nearly 1.75 million Indian nationalities reside in UAE, which makes it the largest expatriate community. UAE is also a tax-free country, which makes it even more attractive. United Arab Emirates comprises of seven emirates: Abu-Dhabi, Dubai, Sharjah, Ajman, Umm-Al-Quwain, Ras-Al-Khaimah and Fujairah. UAE is a mixture of advanced infrastructure, tax-free income, job opportunities, security etc. Hence, it is important to expand to other parts of UAE. All the Emirates are well connected through roads, and people staying in one emirate travels to other for work and sight-seeing. Currently, Raju Omlet has only one branch, which is in Dubai. Therefore, opening eateries in other emirates can prove to be beneficial to the restaurant.

Product development is

defined as adding new products into the current line so that its business can prosper. When the firm’s offerings enter the maturity stage, they have to bring in changes so as to continue in the market. As far as Raju Omlet is concerned, if they try to bring in diversity by preparing dishes of chicken, vegetable etc. they might lose their uniqueness. Hence, product development is not a suitable strategy to be considered while preparing to get larger. Market development involves introducing the current product into a new market. If the facts given the Raju Omlet case study are to be believed, currently, the restaurant has only one branch at Al-Karama, Dubai. Hence, to get bigger, Raju Omlet can use the market development strategy to spread out their business venture. They can open up new branches in different parts of Dubai alone or also other Emirates. Diversification happens when firms look for new products in new markets. As mentioned earlier, since Raju Omlet’s USP is egg preparations only, 8 | Page

diversifying into a new product is not a valid choice as then they will lose their distinctiveness. At the same time diversifying into new market is a pertinent alternative. Keeping in mind the popularity of Raju Omlet, market diversification will enhance their current profits if they are opening new branches at various locations. Market penetration strategy means increasing the sales of the existing products in existing markets. There are mainly four ways to increase the sales of a current brand; Increase frequency of purchase, increase amount per purchase occasion, sell to non-customers and see to non-buyers (Frain, 1996) . For instance, Raju Omlet could increase the regularity of purchase through excessive advertising promotions that will give consumers an explanation to go there more often. They can also boost amount per purchase occasion through “value meals”. By following these marketing actions they can gain customers from their competitors. Raju Omlet can adopt price reductions, expanded delivery in the existing marketplace, sales force endeavor or promotions could be the additional ways to implement market penetration strategy. Consequently, potential growth is only the way forward for Raju Omlet. Rajiv & Nakul might find the expansion process hard but as the risks are more, the payoffs and profits are greater too.

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References

Anders, G., Michael, J., & Inger, R. (2005, January 1). The Effects Of Customer Satisfaction, Relationship Commitment Dimensions, and Triggers on Customer Retention. New York. Anonymous. (2000, January 1). Food Safety Guidelines for Onsite Feeding Locations, Food Shelves and Food Banks. Washington: University of Minnesota Book Store. Bojanic, D., & Rosen, L. (1994). Measuring serive quality in restaurants. Hospitality Research Jorunal, 4-14. Bootwala, F. (2013, September 10). Restaurant Review: Raju Omlet, Al Karama. Retrieved February 29, 2016, from http://www.masala.com/restaurant-review-raju-omlet-al-karama40121.html Frain, J. (1996). Principles and Practice of Marketing. London: Pitman Publishing. Philip, K. (1997). Marketing Management : Analysis, Planning, implementation and Control. New Jersey: Prentice Hall. Porter, M. E. (1985). Competitive Advantage. New York: New York Free Press. Susskind, A., & Chan, E. (2000). How restaurant features affect check averages. Cornell Hotel and Restaurant Administration Quartely, 5663. Webb, T. (2010). An Overview : Most of what you need to know about Serving Food and Beverages. Serving Food and Beverages, 11.

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