Posted: May 25th, 2022

Description of the Business Essay

Customer Management

Description of the Business

I am going to work with a chain of sandwich shops specializing in banh mi. The concept is simple — banh mi is a Vietnamese sandwich on a baguette. They are usually quite affordable, often coming in a price point lower than the big sandwich chains. The name of the chain is going to be Uncle Ho’s Banh Mi, with a tongue-in-cheek Uncle Ho as the mascot. The banh mi is typically made with a meat — either pate or xa xiu (roast pork) and a large helping of vegetables. Tofu can also be used in place of the meat. The meat is used sparingly, but it is full of flavor. This helps balance the sandwich, which would otherwise be mostly vegetables. That there are a lot of vegetables helps keep the ingredient cost down. A variety of condiments will also be available, ranging from Vietnamese-style vinegar to Sriracha.

The value proposition of Uncle Ho’s is simple. The sandwiches are of lower price and higher quality than the competition. Chains like Subway and Quizno’s, quite frankly, are overpriced. Their food is pretty poor in quality, has almost no flavor, and the ingredients are not even natural (Rogers, 2014). The prices at Quizno’s are actually nuts for what you get. Banh mi shops all over the U.S., from LA to Orlando, have been selling great, natural sandwiches for under $5. As America wakes up to the Vietnamese soup craze, pho, so too will it realize the greatness of the banh mi, and that is where Uncle Ho’s comes into play. There are no other banh mi chains in the U.S., and with the existing sandwich chains being tired wastelands of mediocrity, Uncle Ho is set to launch a new revolution.

Target Market

The biggest thing to know about the target market is that everybody eats sandwiches. Even vegans. The only people to whom we do not want to sell our banh mi are infants on formula, celiacs, wanna-be celiacs who are gluten free for no real reason, and that’s about it. Don’t let the pork thing fool you — we can sell to vegans, Jews, Muslims and Buddhists, too because several of our banh mi are made all-veg, and this is quite traditional in nature so it still tastes good. The Vietnamese are masters at vegetarian cuisine and we are applying that knowledge to our banh mi.

But in all likelihood, the target market is going to be a little bit narrower than that. Geographically, the target market is going to be within 5 miles of one of our shops — people do not travel far for fast convenience food. Our shops are going to be concentrated along the coasts, with the possible exception of Texas, because these areas are a much easier sell to “foreign” food. It’s not that we don’t think we can sell in Kansas, but we want the low-hanging fruit first.

Demographically, we are aiming first for the urban consumer as they are the most receptive to new food ideas, and in many cases will need no introduction to banh mi. The demographic is younger, 14-34, for two reasons. One, this group is a major patron of the quick service industry in which we compete (Yohn, 2011). Millennials appreciate good food more than older people do, and they are budget-conscious. Plus, millennials are more likely to be urban. Location is key, so we are all about locations near campuses and other areas where young people gather. Entertainment districts are very much fair game, especially if they have good daytime traffic as well. The customer is more likely to be male, though we will attract a greater female audience than purveyors of fattening foods — we will probably do about the same demo as Subway, who would be our biggest competitor. Sandwiches are also a very popular lunch item, so daytime traffic is important — downtown business districts and shopping districts are also useful locations to reach millennials who have progressed beyond school. Lunch is important because 75% of people prefer a sandwich for lunch according to Mintel (Sheppard, 2012). Mintel also notes that growth in the sandwich business hinges on niche markets, including ethnic, and that ethic ingredients were an essential component to effectively target millennials with sandwiches (Eyre, 2008).

Servicescape

One thing that millennials crave is authenticity, or at least perceived authenticity. We won’t be able to secure a supply of bia hoi, but we can at least capture some elements of the authentic Vietnamese hole-in-the-wall experience. The restaurant will superficially resemble a hole-in-the-wall. Upon entering, the dining area will be up front, with the counter at the back. There will be a couple of traditional tables, but also some little plastic stools, traditional to Vietnam. People who are not too fat can sit on these stools as part of the dining experience. Heavier-set people will have to take the regular tables. Decor will feature faded posters of Ha Long Bay, rice paddies, and reprints of Communist propaganda posters.

Service will be focused on quickness and friendliness. Patrons are to be greeted when they enter, as one would when entering someone’s home. Friendliness is important to the customer experience. The order will be taken at the counter, and the sandwich prepared promptly. There will be service standards in place for this, probably 60 seconds or less. Customers of any quick service restaurant expect fast service to go with their low prices. The in-store dining experience will focus on the small stools and tables, to convey authenticity. A large portion of customers are expected to order take-out. Most locations will be in city blocks, so it is not expected that there will be drive-through opportunities, so that will not be a feature of service.

Staffing ideally would be all Vietnamese grandmothers, but a more realistic approach says that we will have mostly students and the chronic minimum-wage workers at our locations. The key is the ability to be friendly, follow instructions and work quickly. Being trustworthy and reliable are other attributes. Perhaps more important will be the managers, who will be the post-student set, looking for managerial roles. They will be paid only a little bit more than the regular staff, but will gain valuable supervisory and managerial experience for their efforts.

Moments of Truth

Moments of truth are those points where there is interaction between the front line employees and the customers, because those are the points where service can either make or break the customer experience (Beaujean, Davidson & Madge, 2006). There are four moments of truth that will define the service at Uncle Ho’s. The first is when the customer enters the restaurant. The customer should be greeted and made to feel welcome immediately. This is double important early in the chain’s life because many people will be unfamiliar with the concept of a banh mi — it’s just a baguette sandwich — and the welcome will help them feel good about their choice. The second moment of truth is the ordering process. People should not wait long to place their order, and the staff member should be efficient and friendly during this process. Getting the order right is also very important. The third moment of truth is the delivery of the sandwich. First, this should be prompt (60 seconds will probably be the target). Second, this is probably the last point of contact between the staff of Uncle Ho’s and the customer. It is therefore one last opportunity to provide exceptional service, to ensure that the customer has what he or she needs, and to provide one last smile. The fourth moment of truth is with the food itself. This is actually the least of our worries, but we do need to ensure that the order has been produced to spec so that the customer is happy with the order. Mistakes at this point, especially on takeaway orders, are difficult to remedy.

Service Quality Measures

There are a lot of different service quality measures. The measures chosen for Uncle Ho’s, however, should reflect the objectives of the organization. Taking into account the four moments of truth, the service quality measures will relate to customer outcomes — do the customers feel welcomed, do they have any reservations about the product, was the process of giving their order smooth, did their order come out quickly and were they given the right sandwich. There are also post-service measures such as overall satisfaction, would they recommend Uncle Ho’s to their friends, do they intend to visit Uncle Ho’s again and other similar questions.

Most of these questions are easy to operationalize, and would be best asked of the customers directly in random surveys. Such surveys would simply ask the question, and not attempt any further operationalization. Some issues, however, can be measured internally. The first such issue is the service time — the time from entering the store to when the order is taken. It is assumed that the order should only take thirty seconds to take, maybe 45 seconds when using cash and 60 seconds when purchasing with a card. Such service standards are easy to measure, if the point of sale system records when transactions are initiated and finalized. This data, of course, can be skewed by the fact that there may be gaps when there are no customers in line — it is difficult to tell when the customer has actually entered the store and line that up with the time it takes to get their order processed. Some measures will be tested to see if there is one that can be gathered by the point of sale system. The time it takes to receive an order is another one that is best measured with time-based measures, not customer responses. The manager will need to be in a position to keep track of these randomly. The company knows when an order is taken from the POS system, but it does not have a way of knowing when an order is closed — we don’t want the cooks to enter this data because we want them making sandwiches, not pushing buttons. Thus, measuring by hand is probably the most reliable way to do this.

Most of the other data will be gained through customer surveys, and managerial observation (are the customers greeted when they enter the store?, etc.) but social media can also provide some insight. Another objective will be to look at service scores on Yelp and Trip Advisor, and to track the number of complaints issued on Twitter, to get additional data on the service standards. These are not managerial measures, of course, but public perception measures are also valuable, because those are influencers on the purchase decision.

Loyalty

It is challenging to build loyalty among workers at quick service restaurants. Obviously, the low pay and transient nature of the employees is a key issue. Worth noting that in this business, your best employees will almost certainly be moving on to something bigger and better — longevity is not always a good thing because after a few years, the employee should be fulfilling their greater potential. We don’t really want people with no potential. So loyalty for a few years is good, but after that they need to be on the managerial track or doing something else. So building loyalty is done by providing a great working environment and competitive pay, and of course flexible schedules are important for our workers as well. Treat them right, and they’ll stick with you until it is time to move on.

Service Recovery

Complaints are inevitable in business, but service recovery is critical, and there is evidence to support the idea that successful service recovery makes for more loyal customers (Spreng, Harrell & Mackoy, 1995). Staff therefore need to handle complaints effectively, by providing customers with a high standard of service, listening to their needs, and attempting to meet those needs. Service recovery is important, especially as we try to build the brand. Staff will follow the maxim “the customer is always right” — we know this isn’t true but the brand needs to build up goodwill.

Feedback

Gathering feedback is important, especially given the customer-centric service measures listed above. There are going to be three channels. The first such channel is the surveys that will be done at random, as an exit poll, to gather information directly from the customers. In this sense, customers are likely to self-select, so the survey will only be of limited use. A more complicated survey will be conducted using a database of customers, and this will be done online because we are trying to reach the millennial audience. In addition, social media will be leveraged with contests to provide incentive for people to give feedback, even when they do not have a complaint. Lastly, as noted, scanning consumer review sites and Twitter for indirect feedback is also important.

These methods are important because they each do different things. The “exit poll” option will result in self-selection and likely will have a higher percentage of complaints than a random survey would. The random survey will yield the best information but will also be the most costly. The cost-benefit tradeoff is expected to worthwhile, however. Social media and third party websites yields a mixed bag of reviews, often easy to take out of context. These opportunities are mostly good for the opportunity to perform service recovery not just with the customer but with anybody reading about a negative experience online.

Total Customer Experience

The total customer experience is a quick, delicious meal. Service will be friendly, efficient and prompt. There will be no errors. The sandwich will come out quickly, and be to order. The in-store dining experience will have a touch of Vietnamese kitsch but will generally be fun and very casual, like eating in a Vietnamese hole-in-the-wall. The entire experience will be young, energetic, and in line with millennials’ love of ethnic foods and unique dining experiences, all while on a budget and short time frame.

References

Beaujean, M., Davidson, J. & Madge, S. (2006). The moment of truth in customer service. McKinsey & Company. Retrieved April 21, 2014 from http://www.mckinsey.com/insights/organization/the_moment_of_truth_in_customer_service

Eyre, C. (2008). Sandwich growth hinges on niche groups. Bakery and Snacks. Retrieved April 21, 2014 from http://www.bakeryandsnacks.com/Markets/Sandwich-growth-hinged-on-niche-groups-report

Rogers, A. (2014). Subway: That yoga mat chemical is almost out of our bread. Time Magazine. Retrieved April 21, 2014 from time.com/59542/subway-bread-yoga-mat-chemical/

Sheppard, P. (2012). Sandwiches market — a slice of the action. Tutor2U.net. Retrieved April 21, 2014 from http://www.tutor2u.net/blog/index.php/business-studies/comments/a-slice-of-the-action

Spreng, R., Harrell, G. & Mackoy, R. (1995). Service recovery: Impact on satisfaction and intentions. Journal of Services Marketing Vol. 9 (1) 15-23.

Yohn, D. (2011). 2 target markets for restaurants. QSR Magazine. Retrieved April 21, 2014 from http://www.qsrmagazine.com/denise-lee-yohn/2-target-markets-restaurants

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