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Question 1: Discuss how Robert should explicitly consider the customer value currently
offered by Frank’s All-American BarBeQue. In your discussion, comment on the five value benefits and the perceived costs.

Robert should consider the current customer value of his father’s hotel in so as to ensure the hotel provides a relatively greater customer value to realise high returns. He will have to identify the benefits that will result in consideration of the customer value. However, he will also need to identify the cost components that will come as a result of customer value consideration.

The business must give consideration of the various mixes of values that will benefit the customers Krajewski, L. et al. (2015). There are five value benefits he will have to consider. First, is the functional value? This relates to the hotel’s ability to deliver service and products to its customers. Robert will have to consider speed, quality and reliability of the products and services the hotel will be providing as found out by Bryman, A., & Bell, E. (2015). The second value benefit to consider is the social value.

This value benefit relates to the sense of relationship with the various groups with the use of images so as to market the business. For instance, Robert may change the menus and decorations of the hotel so as to exhibit the developments with the new business idea. Emotional value is the third benefits value that is derived from the business’s ability in evoking an emotional response in the market. A good example is whereby Robert may come up with the idea of creating a romantic environment by introducing soft music for the customers in the restaurant.

The fourth value benefit is the epistemic value that involves deriving fun so as to evoke more desire to know about the product or service. A good example is whereby Robert may decide to create a unique environment in the hotel by using petting zoo.

Finally, the conditional value is the fifth benefits value that is derived from a sociocultural perspective. A good example is whereby the restaurant can decide to lower the prices of turkeys that are often eaten by many families as in “come together” festivals. The various perceived costs that ought to be considered is monetary, time and physic as claimed by Hatten, T. S. (2015). There is a need for Robert to consider the operating cost and the cost of purchasing the foods in the hotel. Psychic involve factors that may induce stress on the customers.

Question 2: Robert has several possible options for expanding his father’s business— find a larger location in Fairfield, adds a takeout option, open more restaurants in surrounding communities, incorporate web marketing concepts, and expand the sales of sauces. Review each regarding value benefits.

The option of finding a larger location in Fairfield is derived from a conditional value benefit due to its physical context. This option will involve introducing a new element so as to tap more customer base. In this option, Robert will have to learn the traditions of the people in the new location he wants to set the restaurant. He will then have to focus on developing the sociocultural perspective of the new location (Scally, W. A. 2015).

The option of adding a takeout option is derived from the functional value benefit. This option takes consideration of the ability of the restaurant to provide the product and service considering the extra additional takeout. The customers will also expect to provide with quality products from the added takeout. The outcome produced by the business on taking this option will relate to the functional value.

The option of opening more restaurants will relate with the social value benefit in the sense of relationship with the surrounding community. Robert may decide to come up with images or even symbols as a way improving the reputation of the restaurant to the neighbouring community. He may also alter the menus of the hotel by considering the sociocultural perspective of the community (Wheelen, T. L et al., 2015).

Incorporating web marketing concept option will have epistemic values. Incorporating the web will generate a sense of novelty for the restaurant. Customers will have the desire to know about the products and services offered by the hotel from the internet and thus the restaurant will attract more customers.

Expanding the sales of sauces will be an option with functional value benefit. The restaurant will be expected to be able to meet the high demand that will come as a result of the expansion of the sales as explained by Jeston, J., & Nelis, J. (2014).

Question 3-How should he go about approaching his father with these ideas? If the company
expands, should Robert approach his sister and her husband about taking a more active role in the business? What should their roles be?

Robert before approaching his father, Frank will have to be passionate, confident and courageous in his ideas. He needs to assure his father that he will work hard so as to make the ideas happen. He needs to be realistic and explain how the business will acquire resources in overcoming any possible hurdles. He will have to explain to his father how the ideas will increase the competitiveness and the technological progress of the restaurant thus attracting more customers as posited by Ahmad, M. F., et al.(2014).

He will have to explain how the foundation of the family business will be loyal and more grounded. Robert joining the family business will lead to the growth of the business since he will exhibit more dedication in achieving more sales of their sauces.

If the company expands, Robert should approach his older sister and her husband so that they could take more active roles for the benefit of the business. The business will achieve more goals since the family members will exhibit more dedication towards a common goal.

The expanded family business will tend to be stronger since the family members are involved in the various activities of the business. There will be more trust in the business and thus each family member will work harder and care more about the benefits of the business that will help in creating a competitive advantage for the business. Their roles should be a sales representative for the business. This is because there is trust since they are family members and thus will develop more sales strategies for increased sales of the restaurant’s products to realize more revenues (Carroll, A., & Bocholt, A. ,2014).

Question 4 how to assign responsibilities to personnel. His son
wants to be designated the restaurant manager of the second restaurant and made the vice president of marketing. Ed Tobor also wants to be the manager of the new restaurant. His daughter has expressed an interest in being the manager of either restaurant. How should Frank resolve this problem?

Since Frank is the CEO of the company, he has the duty of staffing for the second restaurant by assigning the various responsibilities to the personnel in an efficient manner. The function of staffing will involve selecting, placing and then compensating the personnel as explained by Reichert et al. (2015).

Since Frank is facing a dilemma on how to assign responsibilities to the various personnel he will have to resolve the matter. First, he will have to evaluate the competencies of the family members who want the responsibilities of the business. He will evaluate whether the person desiring the specific position has the necessary skills and competencies in helping the business achieve success while at that position (Hatten, T. S., 2015).

He may apply democratic leadership by involving all of them in making the decision since they are family members. They will have to evaluate the strengths and weaknesses of each one before assign the various responsibilities as claimed by Wheelen, T. L et al. (2015). The participation should be a win-win situation; whereby there will be a mutual benefit for each one. They will have to evaluate the management skills of each one before assigning the various duties. There is also a need to consider the interpersonal, technical and conceptual skills before assigning the various responsibilities.

Question 5-If you were Robert, how would you go about alleviating your father’s concerns? (You may want to consult Chapter 16 «Appendix: A Sample Business Plan» and review Robert’s business plan for a new restaurant.) Answer the question from a marketing perspective.

If I were Robert, I would alleviate my father’s concerns by doing a market research. Market research usually involves gathering information that is required in making decisions of the business. Marketing research enables the managers of the business to develop effectively marketing strategies so as to increases the number of sales of the business to realize more revenue according to Krajewski, L. J., et al. (2015).

I would research on the factors that may affect the people on buying the products of the business. I would use the relevant information so as to improve the quality of the products and services offered to improve the competitive edge of the business. I would gather the information regarding the marketing environment of the new restaurant so as analyse it in an orderly and objective way.

With the relevant information regarding the market, I would come up with strategies on building more customer loyalty and also in the identification of new opportunities for the business (Harmon, P., 2015). I would identify the market trends that will have a great impact on the business.

I would learn the buying habits of the new customers and what they like and what they don’t like with the new business and rectify them. With this information on the market, I would develop strategies to minimise any possible risk and even project the possible problems that may be incurred by the business as noted by Sadgrove, M. K. (2015). I may decide to the research on my own to keep the cost down.

Question 6- How would you go about pricing these two types of meals?

Before going pricing the two types of meals, i would consider marketing both online and on the ground. Marketing is very essential in generating revenue for the business. I would come up with a price that will generate profit for the business. Deciding on the price for the product is a major decision that every business is obliged to make according to Carroll, A., & Buchholtz, A. (2014). There is a need to choose a right pricing strategy considering the factors affecting it as noted by Jeston, J., & Nelis, J. (2014). I would choose the price by considering the competition, the substitute products available and the reputation of the restaurant.

On the online platform, pricing is very complex and thus requires choosing effective marketing strategies. If they decide to opt for the online platform for the takeout, they will have to ensure price transparency. This will enable the buyers of their products to view easily and compare the prices of their various foods in the menus.

The best choice of the price should be the one that will enable the business to reach its sales and profits targets thus generating more revenues. It also should ensure that it considers the reputation of the business.

I would also consider choosing a discount pricing strategy for the business. However, I would only allow customer discount only if they buy in large quantities. If the discount is short term, there is the possibility of the inventory decreasing, but the overall revenue generated increases. Before we select the price strategy to use I could choose the price objectives to achieve after selling the products of the business. Pricing objectives are very essential since they determine the position of the business in the future.

Question 7; Based on the data, they selected Darien, Connecticut. Do you agree with the decision? Why or why not? Do you think other factors should have been considered? If yes, what would you recommend?

Customers only buy products or even services that are available to them on ground or online or even both platforms according to Krajewski, L. J. et al. (2015). It is very important to evaluate the possible locations for the business and the various channels of distribution that are possible. I agree with the decision since it is involving analysis of data involving the population size and the beverage income of the community near the desired location. The flow of the products to the customer will be efficient and cost effective. I think they have employed the right logistics in deciding the appropriate site to choose. This will put the business ahead of the possible competitors thus ensuring it is sustainable over the long period.

I think other factors should have been considered. This is because the business also wants to indulge in the online platform in marketing their products and thus ought to consider the factors that would hinder or facilitate the online marketing. I would recommend that they should also have considered various aspects like: payment options, shipping charges and security (Sadgrove, M. K. 2015). This would have enabled them to make a better-informed decision. This would have enabled them to understand better the appropriate place where the customer could get their product easily, quickly and at a reasonable price where they need it. The employing direct channel of distribution would be the most appropriate since they would sell their product to their final customer without involving intermediaries thus reducing the cost.

Question 8-Compute some of the key financial ratios for this business and discuss the
meanings of any trends.

The key financial ratios that are often computed for business are profitability ratios, liquidity ratios, efficiency ratios, market value ratios and then financial leverage ratios (Wheelen, T. L et al. 2015). This assignment will compute the liquidity ratios by using the formula: current assets/current liabilities for the year 2011 to the year 2015.

Liquidity ratio

From the trend, it is apparent that the business has remained solvent since 2011. From the trends exhibited it is clear that the ability of the business to meet its short-term obligations has been increasing with time. This shows that the business is stable and thus can meet its short-term obligations.

For financial leverage ratios, the formula total debt/total assets will be employed to ascertain whether the business has been able to meet its total and long-term debt obligations

Financial leverage results

Year (in %)

Frank’s debt-to-total assets ratio

Frank’s debt-to-equity ratio

Frank’s long-term debt-to-equity ratio

Frank’s times interest earned ratio

It is interesting to note that the Frank’s business debt-to-total assets ratio have declined with time. Its ratio is considerably indicating the business can meet its long –term debt obligations. The long-term debt-to-equity ratios have significantly declined since 2011. The main reason these ratios has declined is the increase of the total assets with time and the growing equity injection. It appears as if the business is financing its development with the profits it is earning and the short-term debts it is acquiring.

Question 9: Locate the average values of these values for the restaurant industry and
comment on how well or poorly Frank’s All-American BarBeQue appears to be doing with respect to the industry.

My analysis anticipates a growth in profit for the Frank’s business. This is because there is the opening of the second business in Darien. This assignment anticipates an increment of the profit margin from an excess of $850,000 in the year 2011 to over $1,600,000 in the year 2015. The following table analyses the profit and loss with the inclusion of the annual profits of the organization.

Table showing sales in dollars ($)






Pro forma profit and loss


Gross margin

Net profit/sales (in %)

From my analysis, the restaurant business of Frank is doing quite well. There has been significant growth in the profits earned by the organization. The profits exceed 20% for all five years which is quite good.

Question 10: Frank’s business plan in the Appendix (Chapter 16 «Appendix: A Sample
Business Plan») provides projected income statements and balance sheets for a five-year
forecast horizon. Compute the same ratios as in Exercise 1 and comment on your results.

Table 1.0: Liquidity ratio results

Years (in %)

Frank’s current ratio

Industry’s current ratio

Frank’s quick ratio

Industry’s quick ratio

One should immediately notice the business is quite well since all of its current ratios are above the value 1.0. This shows the business can meet short-time obligations to its various creditors. The increase in the values of the current ratios shows the stability the business is gaining in the restaurant market.

Table 2.0: Profitability ratios

Year (in %)

Frank’s gross profit margin

Industry’s gross profit margin

Frank’s operating profit margin

Industry’s operating profit margin

Frank’s net profit margin

Industry’s net profit margin

Frank has seen a significant increase in its gross profit margin since 2011 to the year 2015. This may be attributed to direct material costs. Frank’s gross profit is considerably higher with time than the industry’s average value. Frank’s has also registered an increasing net profit margin showing an increase in the revenue generated by the business with time.


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