CHAPTER IINTRODUCTION Is there still room to grow for the local food industry? Economist have pointed out that the Philippines’ predominantly young demographic with disposable incomes bodes well for local food businesses. But another way of looking at it is to compare our local food industry with that of our Association of Southeast Asian Nations (ASEAN) neighbors.
The Philippines still has a lot of room to grown given its current ratio of 785 people for every food establishment. Just by mirroring the ratio of Thailand (498 people for every food establishment), the Philippines would already have the potential to grow the number of its food establishments by 40 percent (Lim, 2016). Skok (2012), a venture capitalist, observed that one of the common causes of failure for startup world is that entrepreneurs are too optimistic about how easy it will be to acquire customers. They assume that because they will build an interesting product and service, that customers will beat a path to their door. That may happen to the first few customers, but after that, it rapidly becomes expensive task to attract and win customers, and in many cases the cost of acquiring customer is actually higher than the lifetime value of that customer. Suggett (2017) described the process of customer acquisition as bringing new customers to a particular brand, product or service.
It is the lifeblood of any company. In addition, Galetto (2017) said that customer acquisition involves persuading prospects to purchase a company’s products and/or services. Prospects are the people who are not actual customers but could be converted into one.
Some successful customer acquisition strategies include customer referrals, customer loyalty programs, and the like. Moreover, customer acquisition management refers to the set of methodologies and systems for managing customer prospects and inquiries that are generated by a variety of marketing techniques. It is the critical connection that facilitates the acquisition of targeted customers in an effective way. A successful and positive customer acquisition strategy involves attaining the highest possible customer acquisition rate by implementing mass-level strategies such as TV and social media advertisements (Kumar, 2017). A solid customer acquisition strategy is a key component of any successful business. If a business must be both profitable and in a near constant state of growth, they need customers to make that happen (Booysen, 2017). Customer acquisition is an entrepreneur’s most important early-stage question (Ciotti, n.d.
). One of the businesses in its early stage facing the challenge of acquiring customers in Buffed n’ Barbed or BnB for short, in Kawit, Cavite. Buffed N’ Barbed is a restaurant that specializes on buffalo chicken and barbeque which opened for business since the 24th of January, 2016.
According to the co-owner and manager Ms. Dana Lumampao on an interview last July 30, 2017, the reason behind opening this kind of business was because her mother is a supplier of livestock chicken. The name of the food establishment is derived from their aforementioned specialty menus. The restaurant can accommodate 120 customers in one seating.
However, they had fewer customers on weekdays. Ms. Dana mentioned that they emphasized on social media promotions to attract restaurant visits. This circumstance lead the researchers to conduct a study related to how the target customers perceive the business and on how to acquire new customers to increase their existing customer base. This study entitled “Perceptions of the Selected Future Customers of Buffed N’ Barbed in Kawit, Cavite: Basis for Customer Acquisition Strategies” aims to know how the prospects or the non-customers perceive the value of Buffed n’ Barbed offers relative to other food establishments.
It also aims to learn more about these potential customers and understand their needs. The result of this study will help the management improve target customer acquisition strategy that will win future customer in a way that will differentiate Buffed N’ Barbed from rivals, and build a solid loyal customer base that doesn’t need heavy investments.Review of Related Literature and StudiesReview of Related LiteratureCustomer Acquisition Customer acquisition strategy goes beyond one single channel or tactic.
It also involves establishing relationships with potential customers, addressing their needs, and providing all of the information they need to make an informed purchasing decision. This means that in most cases, one single ad campaign isn’t enough to be considered a customer acquisition strategy. It may bring traffic to your site or grow brand awareness, but unless it directly generates conversions, it isn’t driving revenue for your business (Customer Acquisition Strategy, 2017). Even if the company has well developed customer retention plans; it needs to acquire and replace its existing customers.
Over time, customers may replace the company’s products with other products or they might find the company’s product obsolete. Thus, customer acquisition is one of the key marketing processes (Kotler et al, 2013). According to Smith (2016), customer acquisition is a broad term used to describe systematically bringing in new customers and clients to the business.
The goal is to create a bridge from your initial brand awareness campaigns (like advertising or PR) generating leads, nurturing them over time, and building trust along the way, until you finally convert them into new customers or clients. The trick is to coordinate these various promotional techniques to provide visitors with a seamless experience that educates, interests, and persuades. Sugars(2017) stated possible sources of gaining customers, which are advertising, networking and referrals, and teaming up with another business having the same target customer and using their database to promote your business. Customer acquisition implies ways of acquiring customers for a business and that a company takes to purchase or integrate with another company. On the other hand, it should be able to manage the customer views and address different questions posed by them (Faed, 2013).
Overall customer experience is the top challenge identified for customer acquisition. Customer acquisition processing provides a first impression that sets the foundation for establishing a strong relationship as you start delivering on your promises. The changing preferences of today’s better informed customers leave little room for processes that are not optimized for the customer experience (Rattray, 2016).Customer Perceived Value According to Kokemuller (2017), customer perceived value is marketing- and branding-related concept that points out that success of a product is largely based on whether customers believe it can satisfy their needs. This emphasizes that when a company develops its brand and markets its products, customers ultimately determine how to interpret and react to marketing messages. It can also be defined as “the difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives.
” (Garcshick, 2016). From a restaurant owner’s standpoint, it is important to ensure that the expectations you set for people through advertising and marketing efforts are in alignment with the service you provide. For an elegant restaurant, their expectations are very different. The same service that they would consider good at a fast food place would be considered poor at a premium restaurant. The more closely these are aligned, the more value consumers will find in your service. Customers want their expectations to be met or exceeded (Frampton, 2015). Customer perception is influenced by a variety of factors. The whole process of consumption and all interactions involved are of crucial importance.
In today’s globalized information-driven economy, this can also comprise issues like how other customers or influencing groups perceive the product or brand, the degree to which the customer feels the actual marketing campaign addresses the most important issues, and responsiveness and service quality of any affiliates (Recklies, 2015).Consumer Behavior Consumer behavior involves the use and disposal of products as well as the study of how they are purchased. Product use is often of great interest to the marketer, because this may influence how a product is best positioned or how we can encourage increased consumption.
Since many environmental problems result from product disposal this is also an area of interest. It also involves services and ideas as well as tangible products (Mihajlovi?, 2016). Consumer behavior is the study of how people make decisions about what they buy, want, need, or act in regards to a product, service, or company. It is critical to understand consumer behavior to know how potential customers will respond to a new product or service.
It also helps companies identify opportunities that are not currently met (Schofield, 2017). Marketers expect that by understanding what causes the consumers to buy particular goods and services, they will be able to determine which products are needed in the marketplace, which are obsolete, and how best to present the goods to the consumers. The study of consumer behavior assumes that the consumers are actors in the marketplace. The per¬spective of role theory assumes that consumers play various roles in the marketplace. Starting from the information provider, from the user to the payer and to the disposer, consumers play these roles in the decision process (Chand, 2013). According to Solomon (2017),understanding consumer behavior is important for any organization before launching a product.
If the organization failed to analyze how a customer will respond to a particular product, the company will face losses. Consumer behavior is very complex because each consumer has different mind and attitude towards purchase, consumption and disposal of product. Consumer behavior can assist restaurant marketers and practitioners when they develop marketing strategies and enable them to select the most salient attributes to attract and retain customers (Joshi, 2012).
Review of Related Studies The research “Consumer Perception towards Fast Food Industry” by Bharti, Gupta, Bansal, Shaikh, Chaudhari, and Raghav (2015) seeks to estimate importance of various factors affecting the choice of fast food outlets by young Indian consumers. Structured survey questionnaires were distributed to 100 respondents. Results indicate that the young Indian consumer has passion for visiting fast food outlets for fun and change and they opt for fast food because they find quick service in the fast food joints.
It was found that the consumers, who are mostly students, prefer the fast service and delivery in choosing these fast food joints. Many consumers also prefer the variety that is the vegetarian or the non-vegetarian food the cleanliness is also an important factor mentioned by many consumers but they didn’t consider it as important as compared to the fast service.The research of Longarta, Wickensb, and Bakirc (2016) entitled “Consumer Decision Process in Restaurant Selection: An Application of the Stylized EKB Model” aims to propose a framework based on empirical work for understanding the consumer decision processes involved in the selection of a restaurant for leisure meals. They used interpretive approach in order to understand the intricacies of the process and the various stages in the process.
They also conducted interviews with consumers of various ages and occupations in the South East of the United Kingdom. The stylized EKB model of the consumer decision process (Tuan-Pham & Higgins, 2005) was used as a framework for developing different stages of the process. Two distinct parts of the process were identified. Occasion was found to be critical to the stage of problem recognition.
In terms of evaluation of alternatives and, in particular, sensitivity to evaluative content, the research indicates that the regulatory focus theory of Tuan-Pham and Higgins (2005) applies to the decision of selecting a restaurant. The Engel-Kollat-Blackwell (EKB) model is a comprehensive model that depicts the consumer behavior as decision process comprised of five different stages: need recognition, information search, alternative evaluation, purchase decision and outcome.The research conducted by Jun, Kang and Arendt (2014) entitled “The Effects of Health Value on Healthful Food Selection Intention at Restaurants: Considering the Role of Attitudes toward Taste and Healthfulness of Healthful Foods” investigated restaurant customers’ intent to choose healthful (e.g., low-fat or low-calorie) menu items using the value-attitude-behavior model. The sample was comprised of customers who had previously consumed these types of healthful items at a casual dining restaurant.
Structural equation modeling was used to analyze data. Results revealed that customers’ health values had a positive effect on attitudes and behavioral intentions and that customer’ attitudes toward low-fat or low-calorie menu items positively influenced behavioral intentions. However, attitudes toward taste of healthful menu items exerted a greater impact on behavioral intentions to choose, recommend, and spread a positive word-of-mouth about those menu items. To meet customers’ desire, restaurants should continue to focus on great-tasting healthful foods.The research “Service Environment of Restaurants: Findings from the Youth Customers” conducted by Voon Boo (2012) discovered that the relatively service-driven restaurant industry is becoming more important in generating income for many Asian countries and hence the service performance of the restaurants must be well understood and managed. The key determinants for restaurant service quality need to be identified, especially for the important segment such as youth customers. Therefore, this paper aims to explore the importance of service environment (servicescape and human service), food quality and price from the youth customers’ perspective.
The types of restaurant investigated were the fine dining (n1 = 145), fast food (n2 = 147), and food court (n3 = 117) restaurants. Duly completed structured questionnaires (n = 409) were collected. The key determinants on satisfaction and loyalty were mainly human service and price. However, the impact of servicescape on customer satisfaction and loyalty was relatively smaller, except for fast food restaurants. Researcher Jang Yisak (2015) in his study “Perceived Value of Fast-food Restaurant Franchises in the USA” found out that perceived value significantly affects consumers’ purchase intention. Also, he examined if there are any significant differences in perceived value for different fast-food restaurant brands and attempted to identify which fast-food restaurant is perceived to be the industry leader. The results indicated that there were significant differences in perceived value for different fast-food restaurant brands.
Besides, monetary and behavioral price significantly affects consumers’ purchase intention.The research conducted by Lai (2014) entitled of “The Roles of Value, Satisfaction, and Commitment in the Effects of Service Quality on Customer Loyalty in Hong-Kong Tea Restaurants” (2014)evaluates the roles of perceived value, customer satisfaction, and affective commitment as they mediate the effect of service quality on customer loyalty at Hong Kong–style tea restaurants, which are quick-service restaurants with a fusion menu of Western and Asian foods. Based on the analysis of data collected from 382 customers of these tea restaurants, the study found the following relationships: first, service quality positively influences perceived value, customer satisfaction, and customer loyalty; second, perceived value is a mediator of the relationship between service quality and customer satisfaction; third, customer satisfaction positively influences affective commitment and customer loyalty; and lastly, affective commitment is a mediator of the relationship between customer satisfaction and customer loyalty. Contrary to expectations, however, perceived value does not have a significant effect on customer loyalty for these restaurants. This study highlights the role of affective commitment in the study of service quality, and also is one of the few that addresses Asian restaurants because it demonstrates the moderating effects of culture in the relationships between Hong Kong–style tea restaurants and their customers.Lattimore and Sitruk (2014) investigate the relationship between the three components of perceived quality (service quality, food quality, and restaurant atmospherics), positive emotions, and behavioral intentions in the study “Casual Dining on the French Riviera: Examining the Relationship between Visitors’ Perceived Quality, Positive Emotions, and Behavioral Intentions.” By testing competing structural models on a sample of international tourists to casual dining restaurants on the French Riviera, the study found that positive emotions have a strong influence on behavioral intentions. Competing paths between service quality, food quality, and restaurant atmospherics with positive emotions were found.
The results hold important theoretical and managerial implications for service providers and encouraging international visitors to revisit and recommend restaurants on the French Riviera.The Relationship between Previous Studies to Present Study The research conducted by Bharti, Gupta, Bansal, Shaikh, Chaudhari, and Raghav (2015)estimates the importance of the various factors affecting the choice of fast food outlets by young Indian consumers. In the present study, factors that affect the choice of the possible customers of the targeted restaurant are being identified by the researchers. Thus, the researchers need to find out the reason why non – customers of the Buffed N’ Barbed are not visiting the said facility, and to identify what characteristics in choosing a restaurant that the future customers will be considering.
100 respondents in the previous study were given survey questionnaires to determine that the Indian consumer has the passion for visiting the fast food outlets and to find out what the consumers’ preferences are in selecting restaurants given by these factors mentioned. Longarta, Wickensb, and Bakirc (2016) was based on empirical work for understanding the consumer decision processes involved in the selection of a restaurant for leisure meals, while the present study aimed to submit a framework based on customer adoption process related in acquiring new customers or non-customers of the said business. Both previous and present study conducted interviews with customers and non – customers of various ages and occupations. The previous one was conducted at South East of the United Kingdom while the present study was on Kawit, Cavite. In the previous study, occasion was found to be critical to the stage of problem recognition while in the present study; the location of the said business seemed to be the problem.
The research conducted by Jun, Kang and Arendt (2014) investigated restaurant customers’ intent to choose healthful menu items (e.g., low-fat or low-calorie) using the value-attitude-behavior model. The sample was comprised of customers who had previously consumed these types of healthful items at a casual dining restaurant. Structural equation modeling was used to analyze data. Results revealed that customers’ health values had a positive effect on attitudes and behavioral intentions and that customer’ attitudes toward low-fat or low-calorie menu items positively influenced behavioral intentions. However, attitudes toward taste of healthful menu items exerted a greater impact on behavioral intentions to choose, recommend, and spread a positive word-of-mouth about those menu items. To meet customers’ desire, restaurants should continue to focus on great-tasting healthful foods.
From the researcher’s study, Voon Boo (2012) based on “service environment of restaurants”: findings from the youth customers aims to identify the Asian restaurants’ key determinants in service quality which has a relation with the researchers’ study that involves customer perceived value. Customer perceive value also depends on the service quality of the restaurants. The present study focuses on youth customers and young professionals who have the capability of purchasing a product from Buffed N’ Barbed. Human service and price are the key determinants of the related study’s satisfaction and loyalty which relates to the researcher’s study that involves loyalty of the selected non – customers. The research conducted by Jang Yisak (2014) was focused on the perceived value of customers on different Fast-food chains in USA. The relation of Jang Yisak’s study with the present research is the perceived value of customers who are dining out in a restaurant. Upon investigating the identification of purchase intention, the result showed that the factors that should be considered are the effective monetary and behavioral price.
These representations will be used for the future customers of Buffed N’ Barbed to pursue the right ones, based on the previous study that has been used by the researcher. The research conducted by Lai (2014) evaluates the roles of perceived value and customer satisfaction. Based on the researcher’s study, service quality and customer quality are the basis he had to use in determining the factor that lies beyond effective service and loyalty of the customers from the said establishment. According to Lai, service quality positively influences perceived value, customer satisfaction, and customer loyalty and customer quality support functions in order to ensure better customer responsiveness. At this point in time, the present researchers imply this research on their current study since it is important from the customers’ perspectives in selecting a restaurant.
Lattimore and Sitruk’s (2014) study relates to the researchers’ topic that is focused on Perception and Acquisition strategy. Their study concluded that service quality, food quality, and restaurant atmospherics affects behavioral intention that creates positive emotions and great perceive quality which makes casual dining restaurants on the French Riviera being revisited by customers. Both study researches on casual dining restaurants which is highly relatable to the researcher’s topic. Moreover, Lattimore and Sitruk’s study also talks about “Perceived Quality” which is also relatable to the researchers’ topic about Perception of the selection of future customers and has a great significance for acquisition strategies.triggered…?From the researcher’s study, Voon Boo (2012) based on “service environment ofrestaurants”: findings from the youth customers aims to identify the Asian restaurants’ keydeterminants in service quality which has a relationship with the researchers’ study that involvescustomer perceived value.
Customer perceived value also depends on the service quality of therestaurants. The present study focuses on youth customers and young professionals who have thecapability of purchasing a product from Buffed N’ Barbed. Human service and price are the keydeterminants of the related study’s satisfaction and loyalty which relates to the researcher’s studythat involves loyalty of the selected non – customeTheoretical FrameworkFigure 1 Consumer Adoption Process Before a customer adopts a new product they go through a five-stage adoption process. The first stage is awareness when buyers become aware that a product exists. Interest, the second stage, occurs when buyers seek information and are receptive to learning about the product. The third stage is evaluation when buyers consider the product’s benefits and decide whether to try it. The fourth stage is trial during which buyers examine, test, or try the product to determine if it meets their needs.
The last stage is adoption when buyers purchase the product and use it whenever a need for this general type of product raises (Ferrell, 2016).