Identify how the Liao Yan restaurant should develop the extended marketing mix for services to overcome their current problems ensuring that your recommendations fully take into account the context given in this brief and the characteristics of services.
Introduction
Operating a business is not an easy task for the management as well as to the owners. The management and owners will have to face many challenges and risks involved in managing a business, especially in a fierce marketplace. In the western countries, restaurants are the nation's largest private-sector employer and as a promising industry, the restaurant business has inspired many people to enter the business(NRA, 2008). At Liaoning University, in addition to the main student cafeteria, there are a range of restaurants including coffee shop, Japanese restaurant, pizza restaurant and Liao Yan Steak Restaurant. Liao Yan Steak Restaurant have to struggle to survive in this fierce competition. In order to increase the business performance, Liao Yan Steak Restaurant should consider conducting an analysis in two main components: marketing mix and service characteristics.
Marketing mix takes a systematic approach to an analysis of the market and outputs of which enable Liao Yan Steak Restaurant to overcome the current operating problems, and maximize its market share and customer satisfaction. Each of the marketing mix factors should not only be internally integrated, but also should have a high degree of efficiency and effectiveness. Traditionally, the marketing mix consists of four Ps (Price, Product, Place and Promotion) developed by McCarthy in the 1970s (McCarthy, 1975). However, in response to the tremendous increase of service industry, service market mix have developed (Rafiq and Ahmed, 1995). Bojanic (2008) argues that services have 5 major characteristics that affect the design of marketing mix: intangibility, inseparability, perishability, variability and ownership. These characteristics led to the creation of an expanded marketing mix for all services with 7 Ps (the traditional 4 plus physical evidence, people, and process). The service marketing mix is also known as an extended marketing mix and is an integral part of a service blueprint design. Simply said, the service marketing mix assumes the service as a product itself. However it adds 3 more P’s which are required for optimum service delivery. This paper aims to explore how this service marketing mix is used by Liao Yan Steak Restaurant.
Company Background
Liao Yan Steak Restaurant is a small business located in Liaoning University with 8000 full time students and over 3000 short term students. However, due to the high charges and student consumption preferences compared to other restaurants on campus, the target market of Liao Yan might be only about 15%. It is significant to meet these customers’ expectation and achieve the word-of-mouth effect to expand the market share. Also, since the strong competitors on campus, Liao Yan as the unique steak house is perceived as only expensive steak meal provider, which cannot be afforded by most students. Actually, Liao Yan possesses a range of dishes at lower prices. Although Liao Yan Steak Restaurant is nicely decorated, owns the only projector TV, small stage and Karaoke system and different dish choices, it does not have any promotion activities. It struggles to fill tables on weekday nights and have little trade in the morning or afternoon, especially on university holidays.
Besides these challenges mentioned, there are much more problems and opportunities faced by Liao Yan, for example, the external environment (e.g. relaxing places needed by students, delivery services, wifi preferences, Wei chat and Weibo social media etc.). Market conditions on campus where the restaurant is operating have a significant impact on the profitability of the restaurant. Liao Yan Steak House has to undertake the necessary marketing strategies by considering these problems