Role of Business Servicescapes in Yolanda Catering - Case Study Example

Service/Product Analysis: Yolanda Catering Service Product Analysis Role of business Servicescapes in Yolanda Catering Customer’s impression formation is determined by servicescapes (physical environments) which may be positive or negative. Emotional states are preceded by cognitive states. Better service can be increased by training to increase employee performance, productivity and motivation in the catering services. It also involves good services to customers (Bei & Chiao, 2000). Servicescape involves the interaction between the buyer and the seller and the physical exterior and interior appearance of the business such as the design, the landscape, the interior decor, equipment and the surrounding environment. In the catering business customers are influenced by the environment through which the service is provided to them. Yolanda catering intends to position itself in a secure and clean environment in order to attract more customers as more people are now saving both time and money to eat healthy foods in attractive environments. The objective of Yolanda catering is to increase customer satisfaction, sales and profitability. Physical environments help customers to develop immediate perceptual image and service product that offers cues to customers. Customers evaluate services based on external impression and appearance (Landroguez et al. 2011). The physical environment of Yolanda catering is determined by appearance and impression of its services and products for customers to make evaluations and judgments. Guests to the shop are least impressed by the service than the physical environment. Hence, prior to experiencing, customers perceive and evaluate the physical conditions of the premises dictated by physical components and environmental cues. Yolanda catering intends to achieve this through improving food quality, offering a wide variety of foods in its menu, emphasizing on cleanliness of the staff, evaluating the price to meet our target market need, hiring top professional interior designers to create an attractive and sound interior environment, and carefully assessing the location of the business to ensure that it is in a safe neighborhood. Yolanda intends to capitalize on three aspects of a pleasing physical environment that will ensure customer satisfaction in the long run. These aspects include the ambient conditions of the restaurant which are associated with aesthetic appeal, the spatial layout and the function of the premises and the signs and artifacts that portray the value of the business as a whole. Chang (2002) stated that the perceived physical environment of a business in the catering industry was a direct of the customer’s overall satisfaction (Bernard, 2012). Cognitive and affective responses Customers evaluate the services capes through satisfaction. The perception by the individual constitutes the cognitive plan. These cognitive perceptions instead stimulate affective (emotional responses) such as dominance, stimulation and pleasure thus cognition comes before emotion. The perception of the parts is dominated by the whole (Burns, 2000 p. 73). For example, customers frequenting Yolanda catering lobby (international airport, Singapore airline) tend to perceive the floors, lighting, front desk, artwork, furniture, wall colors, customers and employees. Customers’ image of the lobby is also influenced by sensory inputs like scents and music. In evaluating the whole premises, Yolanda customers not only look at the external architecture but also the internal decoration which reflect the image and style of the physical environment. Service quality and satisfaction greatly influence the consumer’s behavioral intentions. High levels of satisfaction are associated with the consumer repurchasing the product or recommending it to other consumers. Therefore Yolanda catering intends to improve customer satisfaction in order to increase revisits from its customers and also increased recommendations from the same customers. Perceptions are organized in grounds and figures. Grounds are vague and hazy while figures are immediate and clear at the front of the visual scope. Individuals perceive images based on principles such as closure, continuity, similarity and proximity. Cognitive processing involves organizing perceptual images while affective processing has to do with emotions. Yolanda catering servicescapes are not flexible but more intense (Hayes, 2008). This is because it is not connected to individual feeling of dominance but it describes power and order linked to individual’s submissive feelings. This can be used as a competitive advantage over its competitors since more customers will be drawn by submissiveness of the employees and management towards their customers (Ata & Toker, 2012). This aspect of cognitive (visual and audio) as well as affective (arousal, dominance and pleasure) responses are used in current times to gain competitive advantage and has made the business popular and profitable. Moreover, Perception is also a determining factor in the proper functioning of Yolanda catering services. For example the customers who frequently visit Yolanda catering are greatly influence by the perception of price. This simply means that they evaluate the price of the services and products that are offered by Yolanda catering compared to those of the competing catering service companies. When the customers perceive that the price that Yolanda catering is reasonable they are satisfied by the quality of the food and service that is being offered. Role of Frontline service providers Frontline service providers have the set of traits for the business to be successful. This involves selecting and recruiting the right individuals. The providers provide distinct brand personalities, high quality and actual self-concept (Bentley, 2009). Service providers possess current knowledge on the brand image based on customer’s perceptions. For example, effective and refined service providers offer a competitive advantage to Yolanda catering and customer service. They seek innovative and creative ways to beat competitors. Yolanda catering frontline service providers engages in name recall, face recognition and customer service innovation. They also provide expected and basic offerings. The innovative techniques allow for customers to embrace technology which will have a competitive edge over competitors who are slow in adopting new hospitality services. The providers will stay and scan on par with offerings from competitors (Bei & Chiao, 2000). They also implement and derive novel ideas to delight customers. New ideas produce greater returns on investment and consistency. The services are both scripted and unscripted. The reasonably scripted services at Yolanda catering provide improvised encounter to service attributes. The relaxed or reasonably scripting at the shop and airport has ensured that customers do not find any reason to perceive poor service quality. Self-concept is the basic character trait that is required in the employees of Yolanda catering. Most customers of Yolanda catering have well defined self-concepts and are thus able to handle the various emotions that are portrayed by our customers. Communication between the frontline employees and the general management has been improved through the use of human resource software. Yolanda catering has ensured that there is sound relationship between the management and the frontline staff in order to minimize the cases of conflict amongst them. Emotion is also a very important factor to Yolanda catering. Some of the times waiters are abused by customers and because of the nature of the job they hide their true feelings about the issues. The waiter at all times is expected to be hospitable, friendly, and attentive to the customer’s needs. Yolanda catering waiters have thus been educated on handling rude customers especially the employment of humor to delight the customers. Service Quality Dimensions Service quality dimensions are assurance, reliability, responsive and empathy. Responsiveness of the staff ensures that customers receive best and create service within a short time. For instance, the time it takes to serve an order, respond to a query and resolve complaints. Reliability is influenced by performance and standardized services that do not change based on customers’ bases. The service is reliable if can provide consistency and accurate (Bentley, 2009). Empathy is way up understanding, caring customers’ feelings and being able to offer individualized attention. Assurance is the courtesy and knowledge possessed by Yolanda catering employees who demonstrate ability to convey confidence and trust. Customer quality, retention, perceived value and satisfaction are important elements of good customer service (Kotler & Keller, 2012). A lot of customers are coming back to keep using this catering company, and also reckon friends use it as well. This mention of testimonials and referrals is evidenced by excellent quality, perceived value and retention. Customer quality is rated by how customers perceive the quality of service and the products they received. Customer satisfaction is influenced by customer perceived value and subsequently customer loyalty. Customers with low perceived value show weaker relationships customer loyalty and satisfaction compared to customers with high perceived value. A good testimony of the positive catering experience will likely to excite new customers who may want to try the mentioned service (Ata & Toker, 2012). Satisfaction is also seen in the increased number of referrals from contented customers. The element of customer retention is evident where the brand has high perceived value and great quality food and drinks. At Yolanda catering, all the products and services are really good which signifies a business that is committed to upholding customer quality, retention, perceived value and satisfaction. Service value is driven by basic services, competence and complementary services. When a customer establishes qualities that match with his or her ideal self-concept, they can be said to be satisfied (Burns, 2000). Customers who have stopped taking meals with Yolanda catering have a reason as to why they switched to other catering services. Core service value, relationship value, service value and customer perceived value dimensions all contribute to customer loyalty and satisfaction. Dissatisfied customers play a turn wheel which is likely to affect their perception on their loyalty (Smith & Colgate, 2007). The perceived value must be high to attract a new segment of customers who may wish to change their menu. There are many customers who are attracted by physical environments but when the customer service offered by staff is on a decline, customers will not be impressed by the facilities. Empathy is an important aspect because it allows the employees to build long lasting relationships with the customers through being able to comprehend their needs and feelings. The employees through empathetic practices are able to offer services that are specialized to the different employees thus strengthening the brand of Yolanda catering. Responsiveness is a core attribute of Yolanda employees. For example the waiters are required to deliver on orders fifteen minutes after they are requested. This is very quick compared to other catering service industries. The response to queries is also quick and effective. This has been made possible by ensuring the manager and the staff supervisor are always present. They are the first respondents o any queries and complaints that have been lodged by the customers and they are also tasked with ensuring that there is minimal damage caused to the brand due to these queries. Reliability in Yolanda catering involve the activities of the company in ensuring that there is high quality service delivery constantly and also that there are standardized services that do not change overtime in order to maintain the loyal customers. Assurance in Yolanda catering has also been achieved by the efforts of the company in providing the employees with the necessary knowledge that guides them in developing confidence and trust from their employers. This has been possible through training them in effective hospitality practices Frontline service Providers Frontline staff is essential part of the Yolanda catering brand since they are the contact points with customers. They can enhance or damage the brand depending on their inclination to the service attributes and servicescapes. Highly trained and competent frontline employees such as cashiers, waiters influence the brand and perception of the product. Relaxed and submissive frontline staff will enhance Yolanda catering brand (Pride & Ferrell, 2010). The common source of conflict among service providers are communication breakdown, poor leadership, unequal treatment and low self-concept. Most front line staff may not be able to handle others emotions because they cannot handle their own (Kotler & Keller, 2012). Communication breakdown affects the relationships between service managers and frontline staff. For example, a manager who harasses an employee in-front of customers is most likely to be perceived as arrogant and high handed. This could also be seen as failure in the part of leadership to communicate and address issues before getting out of hand (Landroguez et al. 2011). The poor relationship between staff and managers will often contribute to conflicts. The managerial job specification is related to competence, behavior and qualification. Irregular selection and recruitment of frontline staff, is one source of conflict as many other qualified employees will sulk those who are taken as unqualified. Frequent quarrels over work plans and break down will cause delays and inefficiencies (Bei & Chiao, 2000). Emotional labor is evident in the job. A waiter can hide his or her true feelings and increase perceptions of job stress. This also increases distress and job dissatisfaction evidenced by self-focused emotional management. The waiter is expected to express positive emotions towards customers like attention, friendly attitude and smile. Partial scripting is required in this case to ensure that employees are closely monitored and regulated (Kotler & Keller, 2012). To demonstrate regulation against scripting, Yolanda catering employees can create humor of service to impress and delight customers. Employee empowerment Employees are empowered through training and regular salary increment. Empowerment ensures that employees meet and adjusts to the changing economic conditions. Through training, it is possible to achieve the best of hospitality service qualities such as reliability, assurance and tangibles. On-the-job training or induction of new employees is done in-house. This happens when the organization desires a culture of growth and continuity (Hayes, 2008). In order to create a competitive and productive employee environment Yolanda catering has invested in training its employees. The employees are mostly trained in providing effective hospitality services such as reliability. The direct benefit that is associated with employee training is improved service delivery which is an important aspect in ensuring customer satisfaction. Through training Yolanda catering has boasted a consistent level in high quality delivery of services and a high level of customer satisfaction. Training also has improved the employee’s motivation due to the fact that it ensures that they are more knowledgeable and skilled in the execution of their various duties and responsibilities. Yolanda catering has also been able to build a sense of worth to the employees through the training. This has ensured that he employees are dedicated to performing their services and are also loyal to the company. Yolanda catering has been able to reap from the training services through the through increased profits that are directly related to quality customer service delivery.Increased training activities within Yolanda catering are aimed at igniting new ideas and innovative service delivery practices that will serve as competitive advantages to the company. The competitive nature of the industry has place great importance to human capital as the major source of competitive advantage. It is due to his factor that the training activities of Yolanda catering will continue to be offered to its employees. Motivation through rewards also empowers employees financially hence creating a stable mindset while at work. Regular and reasonable payment has a strong impact on employee commitment and satisfaction. This level of satisfaction is reflected in the way the employees will treat their customers. Satisfied employees will often bring out delighted customers. Yolanda catering should develop incentive schemes that ensure that the employees are empowered and motivated in execution of their duties. These incentive schemes will ensure that the employees are able to sustain themselves through hard economic times. For example the employee of the month in respect to service delivery is given a cash reward. Salary increments are also offered to the employees thus ensuring that they are financially stable. Yolanda catering employees receive up to 10 percent salary increment annually. This however is dependent on the current economic situation of the country. In Yolanda catering,The staff is well suited to managerial, cashier and waitress portfolios (Caruana, 2002). They don black chef uniform and regular body grooming is upheld. The selection and recruitment of individuals is based on experience, competencies and qualification in catering and hospitality services. This has given Yolanda catering a competitive advantage as it seeks to improve customer satisfaction and retention efforts over its rivals. Customer Relationships Building customer relationships is best conducted through word of mouth because most of the services are customized and customers are also drawn from within the business community. Word of mouth is effective because it creates ambience and also because it has the ability of building lasting relationships. These relationships guide the company’s efforts in maintaining its customer base. Word of mouth is also cheap and very effective because it allows Yolanda catering to focus on obtaining its target market. Yolanda catering also encourages its customers to recommend its services to their friends. We achieve this by offering various rewards for customers who come with their friends and also by offering exceptional services that are unmatched by any other catering company. Referrals are important because they help the company build on its customer base. Word of mouth is relevant and contributes to a lasting impression on friends and family members (Malhotra, 2008). For example, a customer who makes a positive testimony to one of the family members or colleagues is likely to believe on the service. Therefore, he or she will likely be drawn to the catering to experience what was told. Apart from being cheap, Word of mouth is a convenient strategy to Yolanda catering because it strikes the recipient positively (Burns, 2000). Keeping the existing customers satisfied is sufficient to create a strong customer base and long lasting relationships. The originator on the state of service has a strong bearing on the recipient. For example, a parent who has been frequenting the shop of lunch with a small drink is likely to influence his or her children to visit the same shop in future. Social media is one way of obtaining likes and individuals experience regarding the dishes and attributes of the staff. The company recognizes the need by individuals to be recognized in their social groups and in society in general and therefore has created interactive and responsive social media sites. The sites are also effective in strengthening the brand of Yolanda catering as they facilitate the engagement of the company to its various customers. The company also advertises its products and services through these sites thus attracting and maintaining its customers. Maintaining the current customers is important to Yolanda because they influence spending of their friends and also because of the fact that satisfied customers are the best advertising for any business. Customer Service Research Yolanda catering does conduct research which is in the form of surveys on quality of food, responsiveness of staff and recommendations. Yolanda acknowledges the fact that effectively done customer service research is able to guide in decision making. The research is quantitative and is meant to appreciate the number of customers who are satisfied or dissatisfied with the services. Yolanda research is geared towards understanding the most important aspects that help towards increasing customer satisfaction. The research is also meant to link the relationship between quality service delivery and customer satisfaction. The research employs the use of a questionnaire that is provided by the waiters to get information on the experience of the customers. Yolanda catering also does interviews that are administered to the customers during payment. The audios from the interviews are recorded and later analyzed to assess the various factors that have influenced the consumer’s satisfaction. The customer service section provides interviews to its customers as they make payments (Ata & Toker, 2012). The interviews are not scheduled but memorized or captured through audio tapes or recorders. The audios are later replayed to allow for the transfer of responses to paper. An observation schedule can also be made to provide observations on the mood and feelings of customers. This can include their facial impression, body language, tone of response, and emotional balance (Landroguez et al. 2011). Customer research is conducted on a regular basis by Yolanda catering in order to ensure that the company is constantly providing quality services that have competitive advantage. Due to the dynamic nature of our customers it is very important to conduct research in order to maintain them and thus maintain our profits.Current research is based on quantitative and qualitative methods which utilize various data collection instruments (Burns, 2000 p. 77). A case study on Yolanda catering is appropriately addressed through interview schedules which query the viability of the enterprise. Research in hospitality industry is very important and almost indispensable given that customers are now dynamic in tastes hence their tastes and likes need to be sought on regular basis. The use of surveymonkey.com which is an online data collection and analytical instrument is of value to hospitality services. 7.0Future Plans If Yolanda meets it financial projections by the ninth month, we intend to open our offices in a second location and develop plans for that new unit. We plan to have at least 3 units in the next five years. The following is our financial plan. The following sections will outline important financial information. 7.1 Assumptions The following future plan is based on the following assumptions : General Assumptions Year 1 Year 2 Year 3 Plan Month 1 2 3 Current Interest Rate 10.00% 10.00% 10.00% Long-term Interest Rate 10.00% 10.00% 10.00% Tax Rate 30.00% 30.00% 30.00% Other 0 0 0 7.2 Projected Financial Cash Flow The following chart and table will indicate projected cash flow. Chart: Cash Table: Cash Flow Pro Forma Cash Flow Year 1 Year 2 Year 3 Cash Received Cash from Operations Cash Sales $178,439 $367,535 $395,008 Subtotal Cash from Operations $178,439 $367,535 $395,008 Additional Cash Received Sales Tax, VAT, HST/GST Received $0 $0 $0 New Current Borrowing $0 $0 $0 New Other Liabilities (interest-free) $0 $0 $0 New Long-term Liabilities $0 $0 $0 Sales of Other Current Assets $0 $0 $0 Sales of Long-term Assets $0 $0 $0 New Investment Received $0 $0 $0 Subtotal Cash Received $178,439 $367,535 $395,008 Expenditures Year 1 Year 2 Year 3 Expenditures from Operations Cash Spending $132,120 $158,400 $162,400 Bill Payments $75,198 $160,615 $175,363 Subtotal Spent on Operations $207,318 $319,015 $337,763 Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 Principal Repayment of Current Borrowing $0 $0 $0 Other Liabilities Principal Repayment $0 $0 $0 Long-term Liabilities Principal Repayment $0 $0 $0 Purchase Other Current Assets $0 $0 $0 Purchase Long-term Assets $0 $0 $0 Dividends $0 $0 $0 Subtotal Cash Spent $207,318 $319,015 $337,763 Net Cash Flow ($28,879) $48,521 $57,245 Cash Balance $7,821 $56,342 $113,586 7.3 Break-even Analysis The following table and chart show our Break-even Analysis. Table: Break-even Analysis Break-even Analysis Monthly Revenue Break-even $20,362 Assumptions: Average Percent Variable Cost 30% Estimated Monthly Fixed Cost $14,254 Chart: Break-even Analysis 7.4 Projected Profit and Loss The following table will indicate projected profit and loss. Chart: Profit Monthly Chart: Profit Yearly Chart: Gross Margin Monthly Chart: Gross Margin Yearly Table: Profit and Loss Pro Forma Profit and Loss Year 1 Year 2 Year 3 Sales $178,439 $367,535 $395,008 Direct Cost of Sales $53,532 $110,261 $118,502 Other Production Expenses $0 $0 $0 Total Cost of Sales $53,532 $110,261 $118,502 Gross Margin $124,907 $257,275 $276,505 Gross Margin % 70.00% 70.00% 70.00% Expenses Payroll $132,120 $158,400 $162,400 Sales and Marketing and Other Expenses $1,800 $1,600 $1,500 Depreciation $6,504 $6,504 $6,504 Leased Equipment $0 $0 $0 Utilities $600 $600 $600 Insurance/ licenses $1,800 $1,800 $1,800 Rent $8,400 $8,400 $8,400 Payroll Taxes $19,818 $23,760 $24,360 Other $0 $0 $0 Total Operating Expenses $171,042 $201,064 $205,564 Profit Before Interest and Taxes ($46,135) $56,211 $70,941 EBITDA ($39,631) $62,715 $77,445 Interest Expense $0 $0 $0 Taxes Incurred $0 $16,863 $21,282 Net Profit ($46,135) $39,348 $49,659 Net Profit/Sales -25.85% 10.71% 12.57% 7.5 Projected Balance Sheet The following table will indicate the projected balance sheet. Table: Balance Sheet Pro Forma Balance Sheet Year 1 Year 2 Year 3 Assets Current Assets Cash $7,821 $56,342 $113,586 Other Current Assets $0 $0 $0 Total Current Assets $7,821 $56,342 $113,586 Long-term Assets Long-term Assets $32,500 $32,500 $32,500 Accumulated Depreciation $6,504 $13,008 $19,512 Total Long-term Assets $25,996 $19,492 $12,988 Total Assets $33,817 $75,834 $126,574 Liabilities and Capital Year 1 Year 2 Year 3 Current Liabilities Accounts Payable $10,752 $13,421 $14,502 Current Borrowing $0 $0 $0 Other Current Liabilities $0 $0 $0 Subtotal Current Liabilities $10,752 $13,421 $14,502 Long-term Liabilities $0 $0 $0 Total Liabilities $10,752 $13,421 $14,502 Paid-in Capital $70,000 $70,000 $70,000 Retained Earnings ($800) ($46,935) ($7,587) Earnings ($46,135) $39,348 $49,659 Total Capital $23,065 $62,413 $112,072 Total Liabilities and Capital $33,817 $75,834 $126,574 Net Worth $23,065 $62,413 $112,072 Read More