FRANK’S ALL-AMERICAN BARBEQUE CASE STUDY QUESTIONS Essay Example
Discuss how Robert should explicitly consider the customer value currently offered by Frank’s All-American Barbeque.
Customer value is the perceptions of benefits minus cost[ CITATION Bur08 l 1033 m Fer10]. Customer value can, therefore, be enhanced by increasing the benefits delivered by a product/service of reducing the cost of ownership[ CITATION Bur13 l 1033 ]. Frank’s All-American-Barbeque delivers several product benefits at relatively low customer cost thus offering a competitive advantage for the business in terms of enhanced customer value. Robert should consider these benefits before developing a new strategy for the business.
The restaurant offers a functional value to consumers as it serves great food at a relatively affordable price according to Frank.
Frank’s restaurant cooks high-quality barbeque food that has won several awards nationally. Frank’s customers feel that the cost they incur to pay for the quality food is justified. This means there is a social value in the food frank’s restaurant serves as it has nationally recognized quality and class.
Frank’s special All-American-Barbeque sauces increase the value of the restaurants food thus enhancing customer value. The sauces correspond to Texan, Memphis, Carolina and Kansas City styles that an emotional value to customers who want to express loyalty to the U.S. cities and States.
Frank’s All-American-Barbeque food and Sauce have won awards in several national cook-offs. This creates an epistemic value that attracts customers who want to try out new and exciting foods that have considered exceptional.
Frank’s restaurant offers conditional value in terms of location convenience. The restaurant is located within a small mall with several other stores. This means customers can have quality barbeque food at Frank’s at a convenient location where they can do other things such as shopping.
Review Robert’s options in terms of value benefits.
Customer value enhancement remains to be a critical marketing task for businesses across all industries[ CITATION Bur08 l 1033 ]. There is a high likelihood that a customer will buy a product or service once he/she determines that the perceived benefits outweigh its cost of acquisition[ CITATION Cas07 l 1033 ]. Robert has several options for expanding his fathers business. However, he should consider if the option will increase benefits or lower ownership cost to consumers.
The first option is to find a larger location in Fairfield. This offers a chance to lower food costs if economies of scale lower the overall fixed and variable costs. However, the new location should be convenient to consumers in terms of conditional, social and functional values.
A takeout option allows the restaurant to offer customers the convenience of taking their food with them to eat at their convenience elsewhere or to take to the eventual consumer. This option should not compromise on food quality or increase the price of food unjustifiably as these may lead to a decline customer value.
Opening restaurants in the surrounding communities will enhance customer value by reducing the time and cost incurred in travelling to the current single restaurant. The new restaurants must have the same standards of food and service as is currently being offered by the existing restaurant.
Incorporating web marketing concepts will increase the brand’s visibility and establish online sales and promotions. This has the potential of expanding the business substantially but it may also lead to high logistic and operational costs. Robert must monitor such costs that may lead to increase in food prices that will consequently lower customer value.
Expanding the sales of sauces will offer and additional income for the business. It will also enhance brand awareness but also increase the functional value to customers who want to use the sauces in their homes. However, mass-produced sauces should maintain high-quality standards so as not to lower the brand value of Frank’s restaurant and barbeque foods.
How should Robert approach his father with his new ideas for expanding the family business?
Robert’s ideas for expanding his father’s business are quite ambitious and could translate into high profitability for the business. However, Robert’s expansion options will change the long-established business model that his father has relied on for the success of the business thus far. Robert may need to focus on his father’s business philosophy of “giving people great simple food at a reasonable price where they feel comfortable” as it has proved to be successful. However, Robert should also develop new ideas that will ensure the business replicates the best practices of the existing restaurant at an expanded scale for greater business success.
Robert should convince his father that expanding the business in a new location or opening up similar-sized restaurants in the nearby towns will be successful as it will maintain his successful business model for the existing restaurant. Robert should focus on the aspect of making quality food, convenient choice of location and reasonable pricing.
Robert should bring to his father’s attention the huge potential for business growth that web marketing concepts present. Robert has seven years experience in a company that specialized in helping business build web presence. He has a BS degree in marketing. He should point out that his qualifications and competencies can be relied on to expand the business using the internet as a marketing and sales tool.
Expansion of Frank’s special sauces sales to a regional supermarket will diversify the businesses revenue sources and possibly increase its brand value. Robert should let his father realise that the expansion of sauces sales builds on his original idea of availing his All-American-Barbecue sauce to his customers spread across the region. Furthermore, the revenue gained from the sale of sauces will be invested in restaurant expansion and marketing.
If the business expands as anticipated, Robert should approach his sister to help manage the expanded unit. Robert’s sister will eventually share in the growth or collapse of the business as it is a family business. Robert’s sister and her husband should be top managers in charge of restaurant operation and sauce production. Robert will have enough time to manage sales and marketing efforts since he is in charge of the expansion plan at the moment.
How should Frank allocate management duties of his existing and new restaurants to his long-serving assistant and his two children?
Frank’s choice of opening a second restaurant is a cautious but prudent expansion plan. The existing restaurant will not be disrupted by the new unit in terms of customer value and business model. Small and medium enterprises should approach diversification and growth step by step in order to asses and react accordingly to unanticipated weaknesses and risks[ CITATION Lon11 l 1033 ]. According to Joiner (2009), this ensures the business does not suffer significant immediate losses that it may not be unable to absorb.
Ed Tobor should be in charge of the new restaurant given his extensive experience as an assistant to Frank. Both Robert and his sister may not possess the required skills and expertise to successfully operate a new restaurant. Robert and his sister should manage the existing restaurant since they have previously worked in the restaurant with their father. The existing restaurant may be easier to manage as it has already established a solid customer base. Robert should act as the C.E.O while his father offers managerial support in the form of advice and guidance until Robert gains expertise in running the business by himself. Roberts’s sister should be the assistant C.E.O in the new restaurant so that she can take care of the family’s interests in the new restaurant since her family is the sole stakeholder in the business. Robert’s sister may eventually consider taking up the C.E.O position in the second restaurant or a third one in the future. It will be important for Robert to be given an influential marketing position so that he can offer his expertise in growing the business through the web and other channels.
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