Project Management Plan for Restaurant Essay

A factor analytic approach revealed that there were different consumer segments based on identified attitudes in the hospitality industry, developing their hospitality selection on different attributes of hospitality services. This requires specific marketing segment and management strategies. A repeated measure some six years later demonstrated the robustness of the identified consumer attitudes. The impact of the attitudes on consumer behaviour is demonstrated and areas of research are identified in which this hospitality monitor may better inform theory development and best practice. Keywords: Consumer behavior, Marketing, Attribute-value theory, Service quality ** Vera Toepoel is an assistant professor at Leisure Studies, Tilburg University, Netherlands. E-mail : V. Toepoel@uvt. nl 76 Vera Toepoel Introduction Consumer trends come and go, affecting the extent to which individuals appreciate certain aspects of hospitality services, and over time this can have significant implications for businesses in the hospitality industry. It is important for the sector to understand what the current trends in consumer behavior are, which consumer segments exist, and how consumer ehavior will develop in the future. Verma, Plaschka, and Louvriere (2002) argue that it is imperative that businesses take into account consumer preferences when making decisions regarding product and service attributes. Understanding consumer choices is the key to successful management of hospitality services. According to attribute-value theory (Mowen and Minor, 1998), consumers base their choice o n different attributes. Consumers may be attracted by price, by quality, by location etc. Consumers weigh up the overall value in terms of the presence and weight of each attribute. A favorable overall attitude is expected to result in repeat business. Over the last decades, several studies on market segmentation in the hospitality sector have demonstrated that consumers’ requirements of hospitality services differ between market segments. Market segmentation divides a market into distinct groups of buyers who might require different products or services. Understanding what various segments require and developing focused management strategies to fulfill these specific requirements are crucial to penetrating new markets and maintaining repeat business (Yuksel and Yuksel, 2002). The benefits of monitoring consumer attitudes seem evident. Incorporation of these attitudes into market segmentation and management is limited, however. In addition, although many segmentation studies have been performed in the hospitality sector (see John and Pine, 2002), research on stability over time is scarce. This study investigates which consumer segments exist in the hospitality sector in the Netherlands. A segmentation analysis based on consumer attitudes in the hospitality industry is used. This study demonstrates differences in personal characteristics and behavior of the identified consumer segments. The measure is repeated to demonstrate the robustness of results. In addition, the repetition of the measure demonstrates how segmentation studies can serve to monitor consumer trends over time. This research can be used to map consumer attitudes and assist hospitality organizations in designing effective market strategies to attract, satisfy, and retain consumers. Monitoring Consumer Attitudes in Hospitality Services: a Market Segmentation 77 Literature Reviews Since the 1970s a coherent theoretical structure has emerged to underpin consumer research. One of the main theories on consumer behavior believes that consumers base their choices on different attributes. These experiences may best be described by multi-attribute models (Mowen and Minor, 1998). These models identify how consumers combine their beliefs about product attributes to form attitudes. Consumers are considered to assess hotels, restaurants, cafes etc. through sets of attributes (Pizam and Ellis, 1999). Multiattribute models assume that consumers are using the standard hierarchy-ofeffects approach in which beliefs lead to attitude formation, which, in turn, leads to actual behavior. One of the most frequently used multi-attribute models is the attitude-towards-the-object model. Mowen and Minor (1998) describe this model in detail. It identifies three major factors that predict attitudes; the saliency of an attribute, the strength of the belief that a product or service has the attribute in question, and the evaluation of each of the salient attributes. Consumers weigh up the overall value in terms of the degree to which each attribute and its relevant weight is present (attribute-value theory). A favorable overall attitude is expected to result in repeat business. For a review of papers which have analyzed the attributes that are valued in the hospitality industry, see Johns and Pine (2002). The importance of the different attributes may differ per market segment. For example, one market segment may be attracted by a restaurant’s low price, another by its food quality, another by its location, and so on. Consumers assess certain attributes of the products, but the key factor is that this assessment is conditioned by the segment to which they belong. Consumers do not value attributes in the same way but in general terms. If they belong to the same segment they usually have similar attribute weighting coefficients. Hence there is a need to properly identify segments, so that managers can identify which attributes of specific services are valued by consumers in each segment. For this reason it is interesting to connect these attributes with the valuation of the different segments. The Dutch Research Institute for Recreation and Tourism (NRIT) claims in their report on trends in tourism, recreation, and leisure (2009) that due to the focus on the economic crisis focused marketing segmentation is an absolute must. Most studies on market segmentation focus on a three-step process of segmentation (who will come), targeting (what do they want), and positioning 78 Vera Toepoel (what can we offer). There are many studies dealing with consumer segmentation in the hospitality industry. For an exhaustive overview of different segmentation approaches and their pros and cons, see e. g. Bowen (1998) and Johns and Pine (2002). Traditionally, segmentation was based on demographic characteristics, later on other variables were used, e. g. geographic, psychographic, and behavioristic variables (Bowen, 1998). For example, Legoherel (1998) focuses on expenditure-levels in terms of consumers’ estimation of travel expenditures; Grazin and Olsen (1997) identify groups depending on their frequency of use with regard to fast food restaurants; Nayga and Capps (1994) relate demand for different types of restaurants to different socio-economic segments; and Binckley (1998) shows that population density has a powerful effect on demand. Victorino, Karniouchina, and Verma (2009) use segmentation based on consumers’ comfort with technology to tailor communication service to guests’ computing and connectivity needs. Oh and Jeong (1996) base their segmentation on characteristics of the organization: product, service, amenity, appearance, and convenience. Lewis (1981) finds that segments in restaurants differ in their opinions about the importance of several service attributes, while Bahn and Granzin (1985) find that nutritional concerns affected restaurant selection. As hospitality organizations provide a number of services, it seems appropriate to consider the benefits in terms of the attributes of the total service product provided (Bahn and Granzin, 1985). Much hospitality research reflects the broad theoretical structure of attribute-value theory. Thus a number of authors have studied hospitality attributes, but the authors disagree about the relative importance of the attributes (Johns and Pine, 2002). Clark and Wood (1996) attribute the differences in importance of attributes to different styles of hospitality services, e. g. types of restaurants. Differences could also come from different trends or cultures and even different types of survey questions, however. It is difficult to develop standardized questions to measure generalized attributes that are considered relevant to all hospitality services. Parasuraman, Zeithaml, and Berry (1988) made a major contribution to the service industry by developing the SERVQUAL instrument. They demonstrated that service quality depends on five dimensions: reliability, responsiveness, assurance, empathy, and tangibles. The applicability of SERVQUAL in the hospitality industry is demonstrated by several studies (e. g. Bojanic and Rosen, 1994; Lee and Hing, 1995; Stevens, Knutson, and Patton, 1995). Although SERVQUAL summarizes service attributes in a theoretically satisfying way, it takes little account of differences in consumer’s wishes regarding service quality over time. In Monitoring Consumer Attitudes in Hospitality Services: a Market Segmentation 79 addition, each study on market segmentation in the hospitality industry reveals distinct consumer groups, but it is often unknown, however, whether the segmentation holds over time or in different settings. Research on stability in market segments over time is scarce (Dolnicar, 2006). Stability is essential as every segmentation solution is different. Only if a segmentation solution can repeatedly be found, does it give a secure basis to postulate existence of segments. In her study on market-segmentation in tourism over the recent decades, including papers in academic journals from 1981 until 2005, Dolnicar reports less than 14% of all studies reporting on any form of stability in market segmentation. Stability over time is claimed to be one of the most important potential developments in hospitality segmentation. The hospitality sector is always moving and all kinds of trends and developments influence the sector locally, nationally, and internationally. Therefore, it is important to monitor what hospitality consumers want. The Dutch Tourism Knowledge Centre, the Dutch umbrella organization for the hospitality sector, acknowledges in its report on consumer behavior (2000) that consumers found that hospitality businesses did not know what their consumers wanted. In 2002, the Dutch Tourism Knowledge Centre adapted the SERVQUAL instrument of Parasuraman et al. (1988) to five consumer attitudes in the hospitality sector , in order to better keep up with consumers’ wishes. The Moment Consumer (SERVQUAL: tangibles) chooses what is convenient at a certain place and time. Physical facilities, equipment, and appearance are found to be important attributes of hospitality services. This consumer is unpredictable and consumer loyalty is low. This consumer feels more and more the need for efficiency. Price is not an object of concern. Moment Consumers are sensitive for trends and tire of concepts relatively quickly. The Conscious Consumer (SERVQUAL: reliability) appreciates the ability to perform the promised service dependably and accurately. The Conscious Consumer emphasizes nutrition, origins of products and security. Conscious consumers are concerned about the negative consequences of their behavior for the environment and their health. For the Assured Consumer (SERVQUAL: assurance), health and a good and safe environment are important. Under the influence of food scandals the emphasis is on natural and biological products. Consumers are driven to find alternatives if there are indications of potential risks. Information on the whereabouts of a product, the methods used for preparation, and â€Å"pure† products, are important attributes for this consumer. Violence and aggression have to be tackled by the hospitality business openly. The Healthy Consumer (SERVQUAL: responsiveness) values 80 Vera Toepoel â€Å"healthy† food. Colour, taste, form, structure, odor, and appearance are important attributes for a healthy lifestyle. The origins printed on products are also criteria for purchase. The Healthy Consumer buys at responsive businesses. The Experience Consumer (SERVQUAL: empathy) wants more than food or accommodation. Eating, drinking, and sleeping have to be experiences, where the consumer is able to participate in the business process and above all is surprised by the experience. The Experience Consumer wants individual attention and empathy from hospitality businesses. All of the identified groups value different attributes in the hospitality sector. Attitudes towards different attributes are found be related to demographics. Lea and Worsley (2005) find a significant effect of sex on hospitality beliefs. Bittencourt, Teratanavat, and Chern (2007) discuss household income, family size and composition, residential location, and age as important influencing factors on food and hospitality consumption. For example, age effects are associated with changes in nutritional requirements, tastes, and preferences due to aging and life cycle (Mori et al. , 2000). Cook (1994) discusses that spending on dairy products generally decreases with age, while spending on vegetables and fruits are higher in older age groups. Nayga and Capps (1993) give an overview of studies on food away from home and the socio-demographic factors considered. They find gender, urbanization, household composition, age, education, and income as most important factors influencing consumer behavior. Demographic factors can be used to predict differences in attitudes because the structure of demographic characteristics follows a specific pattern (Bittencourt et al. , 2007). It is important to take into account demographic characteristics to see how they influence consumers’ attitudes towards certain attributes. National policies can also influence consumer behavior and attitudes. At the time of this research, smoking policies were a hot topic in the hospitality sector. Although many businesses feared for their turnovers and some faced major losses due to the introduction of a smoking ban (Frumkin, 2004), other businesses did not notice any differences in consumer behavior before and after the introduction of the prohibition (Kramer, 1995), or even saw a business opportunity in it (Pratten, 2003). It is interesting to see how policy measures such as a smoking ban can have different effects on consumer segments. When hospitality businesses monitor which consumer segments they attract, it becomes more feasible to understand and react to national policies. In the remainder of this paper the five consumer attitudes are presented in a research instrument based on consumer segmentation, the Hospitality Monitor, together Monitoring Consumer Attitudes in Hospitality Services: a Market Segmentation 81 ith information attesting the reliability and validity of the scale and evidence that the construct is meaningful in analyzing consumer behavior. Methodology Design and implementation A research instrument was developed to distinguish different consumer segments in the hospitality industry based on the five consumer attitudes identified by the Dutch Tourism Knowledge Centre (2002). Since the boundaries between different attitudes are often blurred, the consumer attitudes were classified i nto the five main consumer service attributes of the SERVQUAL instrument (Parasuraman et al. 1988). These attitudes are clear and can be manipulated. The attitudes are useful for all sectors in the hospitality industry, from drinking, eating, to accommodation. About ten items per attitude were constructed to differentiate between attitudes. The research instrument consisted of 50 items measured on a five-point Likert scale. Items are presented in Appendix A. The score on each attitude indicates the respondent’s attitude towards the topic. Questions on gender, urbanization, household composition, age, education, income, and the smoking ban were also taken into account. Longitudinal measurements reveal the augmentation or weakening of certain attitudes. To demonstrate, the exact same measure was repeated some six years later. The questionnaires were fielded in the CentERpanel, an online household panel consisting of more than 2,000 households administered by CentERdata. The panel aims to be representative of the Dutch-speaking population in the Netherlands, including those without Internet access. The CentERpanel is based on a household probability sample selected by Statistics Netherlands, the national statistical agency. Households with no Internet access when recruited were provided with a so-called Net. Box, enabling a connection via a telephone line and a television set. If the household did not have a television, CentERdata provided that, too (see Appendix B for details about the panel). Data collection for Wave 1 took place in August 2003; 1644 panel members were selected and 1410 responded (response percentage 85. 7%). Data collection for Wave 2 took place in March 2009; 2446 panel members were selected and 1677 responded (response percentage 68. 6%). The demographics in both samples are roughly the same, as can be seen in Appendix C. Data was analyzed using SPSS version 17. 82