Abstract
This paper explores the application of revenue management (RM) strategies in casual dining restaurants, focusing on four key theories: these include the customer behaviour theory, the pricing theory, the prospect theory and the lean management theory. Hence, the study emphasises the importance of the different approaches in pricing and profiting such as fluctuating price, selective discounting, and customer categorisation. It also allows restaurants to set prices dynamically hence they get more profits during the busy hours and attract more clients during the off-peak times. The effects of incorporating loyalty programs as well as the credit analysis of customers provide an additional value to tailored promotions and customer satisfaction. Pricing strategy central focuses on dynamic, value-based and psychological method suited with the market and the costumer’s perception and analysis to create fairness and equal value for money to aid restaurant’s to maximize their revenue while keeping it reasonable. Using prospect theory, this paper established how consumers decide on what to choose namely on the perceived value or loss, which enables a restaurant to design a pricing strategy so as to avoid or reduce the perception of loss, thus increasing consumers’ perceived value.
Lean management theory is concerned with ideas about work processes and organization, the rationalization of work, the elimination of waste and the judicious application of resources. Method like JIT inventory management and map value stream make restaurant to bring down cost while maintaining the service delivery hence making restaurants very profitable. From the findings of the study, it is found that RM practices are critical in enhancing the financial performance of casual dining restaurant businesses especially when adapted to the new normal. This way, restaurants, using data analytics, customer information, and technologies, can change the prices, work on efficiency, and satisfy customers’ expectations. This approach makes it possible for restaurants to develop sustainable business models and sustainable competitive advantage in the fast paced and dynamic business environment of the restaurant business. By doing so, the findings of the paper underscore the significance of future studies to advance understanding of RM’s role in the CDS by consistently examining the relationships between customers, pricing, and operations.
CHAPTER 1: INTRODUCTION
Background
Historically, the concept of revenue management in the hospitality industry specially in casual dining restaurants has changed greatly. Consumers who frequently dine out and spend a moderate amount on meals are the target market for casual dining restaurants which runs a competitive environment in the United Kingdom. This segment is located between quick-serve restaurants and casual restaurants with a quest to offer the best quality at reasonable prices. As may be observed, the casual dining sector within the UK market has been open to change in line with the environment through social factors, Standard of living, Technology, and Competition factors. It is important to fully comprehend these dynamics to enable restaurants to use proper strategies to enhance the right pricing and menus with a view of attaining higher profits.
Aim
The main aim of this study is to understand the revenue management practice in basic UK casual dining restaurants. The study initiates recognition strategies for profitability and price optimization. Developing a framework to improve revenue management that ensure the long-term effectiveness of the mining industry in the competitive condition.
Objectives
1. To investigate the concept of revenue management for casual dining restaurants
2. To assess the strategies for optimising pricing and maximising profit for casual dining restaurants
3. To investigate the impacts of revenue management practices on optimising pricing and profitability for casual dining restaurants
4. To examine the relationship between revenue management and profitability for casual dining restaurants
Rationale
Firstly, it has been determined that the UK casual dining market is very much preconditioned by such economic factors. Learning how to adapt and change the price inclusion strategies according to the fluctuations of the economic cycles allows restaurants to keep their revenues steady during problems. Thus, combining dynamic and value-based pricing techniques, this paper will reveal how casual dining restaurants could more effectively compete the costs and price levels to consumers' ability and willingness to pay (Nguyen, et al. 2021, pp-1908006). Secondly, in the Competitive environment, casual dining restaurants continuously experience increased threats of rivalry from competitors as well as newcomers. The menu is the most vital area that convey standard about a restaurant and it can be a key competitive defense if well-engineered to meet current consumer trends and obtain the highest profit margin. This research will seek to find out how the application of menu engineering processes menus and positions them to make them appealing and profitable to customers whereby they can help retain the customers.
On an operational level, the incorporation of big data analysis into aspects such as pricing and menus is more important than ever. Technology provides tremendous information on consumers' behavior, market conditions, and organizational productivity. This research will explore the ways by which the use of such data can result in improvement in the management of revenues. Thus, further case evaluations show that through positioning supported by a pricing strategy and, concurrently, utilizing the menu engineering concept, casual dining restaurants can obtain higher levels of operational effectiveness and, accordingly, profitability. The expected contribution of this research is to establish an ideal and practical framework for revenue management to improve CMGR and boost the revenue of casual dining restaurants located in the United Kingdom. Thus, with the help of practical solutions for closing the gap between the two and detailed data support for menu engineering described in this paper, it is expected to develop actionable recommendations that would contribute to the improved viability of the CD segment.
CHAPTER 2: LITERATURE REVIEW
Introduction
This chapter discusses the literature review of revenue management in casual dining restaurants in details. The review explores four key theoretical frameworks: customer behavior theory, Pricing theory, prospect theory and lean management theory. All of these viewpoints provide unique insights into the manner in which the operator might approach the task of maximizing revenue and customers’ satisfaction in the casual dining industry. Looking at these theories in the context of the chapter, it explores how these articulate with deeper issues of restaurant management such as pricing techniques, menu optimization, organization productivity, and customer behavior. It is the goal of this literature review to integrate findings from the most recent research to lay a solid ground on how a systematized approach toward the management of revenues is an essential concept in the casual dining industry of the present-day world.
Theoretical framework
Theory 1: The customer behavior theory
This makes the use of such approaches in casual dining restaurants crucial especially in the light of rising competitiveness in the market. This paper explores major theories and contributions of scholars in analysis of customers’ behavior towards aspects of revenue management particularly regarding to satisfaction and behavioral intentions.
To apply RM in a casual dining restaurant knowledge of the customers’ behaviour is very important. The customer behaviour theory contends that customers’ decisions to make purchases are affected by factors such as emotions, socio-cultural factors and perceived value. In similar vein, Mohamed et al. (2022) examines the impact of digital menus on customer behavioral intention based on stimulation of satisfaction levels. Their study gave out the factual relationship between customer satisfaction and the willingness to come back and also recommend restaurants and that therefore strategic changes to menu presentation translate to improved financial performance for restaurants.
Furthermore, Kaewmahaphinyo et al. (2020) extant literature discusses the factors that have an impact on customer satisfaction in FC locations, including service quality and food quality and ambiance. Their conclusion shows that customers use quality and value as the major factors underlying their behavioral intentions and ability to pay high prices. These insights are essential in creating price understanding for the development of the right price strategies and menu planning in accordance to the consumers.
Technology has a crucial function in defining customers’ experiences in casual dining restaurants. With regards to how service technology affects customers’ behavioural intention, Xing (2023) suggested that factors such as online reservations, mobile ordering, digital payment systems also the convenience factor have been identified to help customers have a positive dining experience. Making use of the available technology relieves the consumer demands as well as increasing the efficiency of operations, all in a bid of increasing revenues.
Kim et al. (2020) showed that sustainable changes in revenue management practices could be helpful for queuing restaurants due to the possibility of using technology to fasten service delivery. Their studies emphasize this by showing that institutions must consider the customers’ needs to adjust the services provided to meet those needs. As a consequence, revenue management in restaurants can be presented as the implementation of technologically supported solutions to build competitive advantages and meet the uncertainty of patrons’ demands.
In so doing, customer satisfaction is posited to mediate the relationship between revenue management practices and behavioral intentions. Following from the above, Murimi et al. (2021) provide a theoretical framework that shows how strategic RMP the likes of dynamic pricing and promotions affect financial performance through increased customer satisfaction levels. According to their research, customers’ perceived value has a positive relation with behavioral intentions such as repeat patronage and recommendation to others. This is very important to establish sustainable profitability strategies especially in casual dining environments.
Mohamed et al. (2022) also scarcely point out the relationship between service quality and customer satisfaction. Some of the critics are of the opinion that in order for revenue management strategies to yield good results in casual dining restaurants, the restaurant needs to offer additional services that meet the expectations of the customers at an agreed price. Thus, when customer feedback is gathered, analyzed, and used to evaluate the changes in customers’ preferences, managers are likely to enhance the effectiveness of their revenue management practices and boost revenue, overall.
The lessons learnt from the literature review section are as follows in relation to casual dining restaurants’ revenue management. To begin with, operators should ensure that they adopt and incorporate more technology in their operations, specifically in areas that impact the customer’s behavior and satisfaction levels and this has a direct impact on the business’s revenues streams. Secondly, knowing the potential determinants of customer satisfaction, including customers’ perception of food quality and delivery services assures restaurant managers to exercise efficiency in menu and pricing roll out.
In the same manner, PPE can also impact operations by using other strategies such as dynamic pricing to ensure that profitability is as high as it can get given prevailing demand and perceived worth. By evaluating the customers’ satisfaction levels and their behavioral intentions, the managers of restaurants may be in a position to develop promotional campaigns that will be appealing to their customers.
Literature on revenue management in casual dining restaurants ties the customer behavior and satisfaction as central to the fortunes of operations. Through the use of technology, identification the customers’ needs and developing competitive and appealing pricing strategies, the restaurants can improve their revenue capacity. Future studies should consider the continuous investigation of relationships between customer behaviour/consumer satisfaction and the measures of revenue management in a bid to further develop the understanding of profitability within the international casual dining sector. Appreciation in this area will help restaurant operators to manage the electron of demands while improving the restaurant’s financial returns.
Theory 2: Theory of Pricing
With regard to casual dining restaurant sector, the theory of pricing in the context of revenue management stresses the need to make optimal price decisions so as to achieve maximum profit out of the price without compromising the customers. This paper aims at identifying that through the application of variable pricing techniques as well as perceived fairness, the restaurants’ profitability and satisfaction can be boosted. Psychological aspects of pricing decisions and customers’ perception of prices are among the most significant factors that affect the practice of revenue management.
Among the most crucial strategies of the pricing theory in revenue management is the variable pricing technique, whereby organisations like restaurants set varying prices in consideration to certain conditions, for instance, demand, time, and customers’ details. Webb et al. (2023) analyse the feasibility of a mixed bundle approach for the application of variable pricing approaches amongst restaurants. This helps the operators to come up with different tariffs that accommodate the customers better and hence, bring in more revenues through selling optimum promotional offers. This shows that when the pricing strategies are made to fit the customer tastes and the dining experiences, the restaurants can appeal to the customers to satisfy them with other attractions such as customer satisfaction in addition to revenue.
Another strategic aspect affecting customer behavior in casual dining sector relates to the notion of perceived fairness of price. Meatchi et al. (2021) examine the role of perceived unfairness in revenue management business pricing and create a short, completely itemized scale specific for hospitality. Their research concludes that if the customer has an unfair perception of the pricing strategies then the result is negative emotional feelings which include feeling dissatisfied and having less desire to visit the place again. This serves to show that restaurants must make enough money to sustain themselves especially during these testing economic periods while at the same time ensuring that they depict a certain level of fairness so as to ensure that people keep coming back to do business with them.
When evaluating price sensitiveness and perceived quality, customers are careful when making their choice on the product that they are going to buy. Guizzardi et al. (2022) adopted temporal construal theory in effort to explain how this relationship is evidenced in context of dynamic pricing via the online environment. They have postulated that customers only expect companies offering their goods at cheaper rates to provide substandard products hence reducing the chances of customers being willing to pay for such offerings. In the context of casual dining this underpins that there exists a relationship between the various pricing variables and the perceived value of the dining experience. One has to understand that consumers are sensitive to the price ranges and restaurants have to make sure that it corresponds to the quality of the food they offer as well as the services.
It is therefore clear that the ability to operationalize revenue management within the context of the hospitality industry is inextricably tied to successful implementation of pricing. In their article Hayes et al. (2021) described the best practices in the field of revenue management in the hospitality industry as well as the principles and approaches required in this process. These insights make them understand that revenue management is not about making changes to the price but it entails market knowledge and customer knowledge. Hence, restaurants that are capable of changing their price strategy depending on the prevailing factors in the market are likely to reap the most profits for their venture while satisfying customers’ demands at the same time.
Other aspects that have an impact with customers include; Psychological variables also play an important role in influencing customers’ perception of price in free style eating places. Studies show that the way in which prices are rendered plays an influential role in the perception and eventual purchasing behaviour of a consumer. Creating the psychological pricing formula, the possibilities of using the technique such as charm pricing (for example, $9. 99 instead of $10) for giving an impression of higher value are available to restaurants. In addition, tiered prices enable the restaurants to cover all customers’ segments and stimulate spending through perceived value addition.
Theory 3: Prospect Theory
Prospect theory is relevant for explaining consumers’ behaviour in casual dining restaurants especially for the examination of the price, menu, and revenue questions. It is therefore not surprising that this literature review focuses on how self-serving assets like loss aversion and diminishing sensitivity will affect customer responses and, in the process, provide restaurant operators with valuable lessons on how managerial decisions concerning prices and customers are critical factors for restaurateurs to consider if they are to achieve high operating margins and profitability.
The Prospect theory which was formulated by Kahneman and Tversky asserts that people make decisions based with respect to gains or loss rather than concentrating on the terminal states. This psychological view emphasises that typically people respond to losses more strongly to similar gains. In regards to casual dining, this theory can be a source of understanding how consumers react to the brands’ pricing tactics and menu lists. For instance, when customers attribute changes in price as a loss they are likely to respond adversely to changes hence their eating habits and satisfaction levels shall be impacted. Therefore, by embracing these psychological factors, restaurant managers can be able to work on improving on their revenue management strategies.
The concept of loss aversion is another postulate that is used within prospect theory and states that people dread losses worse than they like gains. Sharma et al. (2020) consider this dimension in the context of review sentiment, which at a negative sentiment level, indicates perceived losses that result from a customer’s negative experience in the form of a poor service or value, for instance. In casual dining context this means that customers are more likely to complain than to give compliments. Consequently, restaurant operators need to reduce what has been described as perceived loss and this is either through faster service delivery, proper preparation of meals or explaining price adjustment to their customer.
Additionally, Wang and Jiao (2022) also explain how loss aversion can be utilised when it comes to applying choice architecture to change customers’ behaviour, for example, tipping behaviour in eating establishments. These understandings are helpful to restaurants and they can use them in changing customers’ behaviors via pricing that frames prices to reduce the perceived loss. For instance, using “savings” instead of “reductions” for items on the higher side of the base price can help minimize the psychological effects of a high base price and hence, get a better response from the customers.
There’s also another thesis from the same theory mentioning that people are less sensitive to changes in values when they are away from that special number. Pricing heuristic is used as a measure of fairness of a price within the context of casual dining and this tends to influence the spending of the customers. Lin et al. (2024) study this idea in the context of tourism decisions by concluding that there are changes in the perceived value of the restaurant offerings and whether they reflect the reference price.
Restaurants can follow one of the pricing strategies where the strategies can apply the concept of diminishing sensitivity by subdividing the menu to come up with a package that offers perceived value even when you charge slightly above your competitors. For example, a casual dining eatery of some sort could present finer meals or exotic food preparation styles that create customers’ perceptions of value; making patrons accept higher prices without feeling a loss of money. It is therefore advantageous to make this kind of application of diminishing sensitivity strategically when trying to maximise revenues.
Incorporation of management of restaurants enables one to have an understanding of what the consumers are likely to do. Namini and Kapoor (2023) seek to investigate how the goals of the organization mirror the psychological characteristics of the owners especially in loss-sensitive firms in a competitive environment. In casual dining, awareness of such psychological factors can be crucial for managers that wish to achieve their goal of improving on prices and menus. Operators need to realise that there are certain emotions about prices that customers are capable of making instantaneous decisions on their dining experience.
At the same time, based on the theories of prospect theory, using data analysis and considering certain trends in customers’ behavior will allow managers to create more effective strategies of revenue management. For instance, understanding how customers responded to the previous price adjustment helps the operators decide the right price brands and promotions that will be well received by their customers while making them feel a loss is averted.
As a result of using the prospect theory, casual dining restaurants should consider the following strategies in order to increase profitability. First, it would be helpful if they offered customers more and better information about value and costs of dishes and shifts in price. It is also useful in reducing other feelings that customers may have in the process when they are experiencing high prices such as feelings of loss.
Second, menus may be designed to take advantage of the loss aversive preference attribution by framing the items in such a manner that the perceived quality will outweigh the perceived cost. This could include the deployment of words such as ‘new’ or ‘unique’ to describe the menu or foods and drinks being offered.
Moreover, the use of pricing strategies such as the tiered pricing that caters for the various segments of consumers will likely lead to increase in revenue. For instance, pointing a sub-menu of foods which are sold at a higher price compared to other foods in the restaurants can target those customers who are not price-sensitive, as they can easily embrace new expensive products by the restaurant due to the new special dishes available in the market.
It can be concluded that casual dining prospect theory is a particularly solid foundation for analyzing decision-making dynamics. Thus, proceeding from the psychological factors that underlie the phenomena of loss aversion and decreasing sensitivity to price increases, operators can effectively develop the pricing and menu profiles that correspond to the customers’ behavior and preferences. spread awareness not only helps to boost what customers want but also helps to drive better revenues results for casual dining segments to help them remain relevant and sustained value in even the most challenging saturated market conditions. Prospective studies can also investigate the subtleties of consumers’ psychological behavior and corresponding operations in the hospitality environment, expanding the knowledge base of this branch of revenue management.
Theory 4: Lean management theory
Lean management theory provides application and best practices towards the operations of casual dining restaurants through making suggestions in the realms of minimizing waste while also improving operations for greater profitability. Important aspects of lean management could apply to restaurants and actually enhance the flow of operations, improve customer service and ultimately, even enhance profit margins. This present literature review assesses how lean management can be adopted in casual dining restaurants in order to enhance their revenue management as well as the sustainability aspects.
The lean management theory is based on the recognition of the concept of customer value and elimination of waste. Stemming from manufacturing this theory has been influential and has been applied in many fields among them being food service. The main goal here is to generate more value to the customers in aspects of resource deployment in the casual dining environment that can be regarded as competitive. Meintjes, and van Rensburg (2022) investigate BPMS in casual restaurant and discuss how factors related to business processes should be optimized for causal restaurant to deliver efficient services.
The concept of operational efficiency is important in casual dining restaurant business since margins can be thin and customers’ expectations are high. Lean management concept motivates the restaurants to evaluate their flow and find out some obstacles they come across or improve their flow. Other practices that may be adopted include Just-In-Time and Standard Work which makes it easier to avoid wastage of money because of stocking excess inventory. As pointed out effectively and efficiently by Meintjes and van Rensburg (2022), that though this method improves the time taken by a customer to be attended to and thus, the turnaround rate of the tables, is also a method that helps in increasing the revenues by increasing the rate at which the tables turn helping in efficient utilization of manpower.
A major principle of lean management is the constant search for waste elimination. There are a number of wastes that can be observed in casual dining restaurants; these wastes may include food, time and labor. Following Lean principles in restaurant and hospitality operations for Culture of Sustainability is the topic of discussion in Glushchenko, (2023). As a result, such measures as portion control, recycling, and energy-efficient equipment can be applied with powerful results of decreasing the restaurants’ environmental impact, and, at the same time, maintaining high profit levels. This strategy fits the restaurant in both sustainability trends and also economically thus improves its brand image to appeal the environmentally-conscious customers.
The second of the lean management pillars is “kaizen”, or continuous improvement Kaizen creates an environment where the employees at all levels of the organization are encouraged to look for areas of improvement and find ways of addressing them. Casual dining restaurants should incorporate a climate that encourages the encouragement of feedbacks and contributions from the personnel since it helps the business to notice shifts in the market disposition or alterations in consumers’ preferences. By performing CI on daily operations, one may be able to adjust the quality and variety of foods offered on the menu, make changes to service delivery styles, and make value additions and/or reductions on the price list hence, profitability. According to the literature, these measures make employees motivated as the staff becomes engaged to the restaurant’s success.
Adopting lean management principles in revenue management is more advantageous for casual dining outlets in their effort to enhance the pricing and menu engineering. Applying review systems on menu items to evaluate their performance by using sales data helps the restaurants in adapting the menu proactively. With the existing trend of recognizing gross-margin items to eliminate options that are popular but not very profitable, restaurants can increase their profits besides reducing on inventory control complication. Lean management covers various best practices in the correction of menus with an iterative approach that makes food menu to be constantly appealing to customers and at the same time profitable in the long run.
Although the lean management has many benefits in casual dining, it is not without some impediments. According to Meintjes and van Rensburg (2022) some of the impediments include strategic resistance among the staff, inadequate orientation and training, and poor leadership of staff. In order for lean initiatives to actually work it means that constant education and training needs to be provided so that people understand this new ‘way of thinking’ which is also lean. Also, for these improvements to be more effective, tackle and implemented, there is the need for the management to support and even advocate for these changes to embrace the lean principles.
Technology is recognised as a key enabler of lean management practices when applied to casual dining restaurants. There are various techniques, like automated tools, point of sale systems, and data analytics that would help understanding the actions of customers, the effectiveness of service delivery and also stock control. The use of technology means that restaurants can avoid redundancies, collect data for decision-making and also improve on customer satisfaction. Technology integration closely fits with Lean principles, while also preparing restaurants for operation in a continually digitizing market.
Summary and key issue to be taken forward
The literature that has been reviewed offers richer understanding of divergent theories that applies to the enhancement of revenue management in restaurants that offer casual dining. The following theories and perspective analysis the consumer habits, restaurant efficiency, and the use of SRMs to maximize the restaurant’s profitability: Prospect Theory, Lean Management Theory, and the systematic literature reviews (SLRs).
Referring to Sharma et al. (2020) and Wang and Jiao (2022), the approach to improve the restaurant pricing strategy is to focus on adding discounts instead of increasing the prices to enhance guests’ dining experience. Through appreciating the two theories of loss avention and diminishing sensitivity, the restaurant managers can be able to come up with good menus and promos that will create perceived value to the consumers hence increasing profitability.
The key idea in lean management is, therefore, the elimination of Waste and, consequently, an emphasis on adding Value. Meintjes and van Rensburg (2022) further points out that such restaurants can easily enhance their sales by enhancing structured business process management. Other practices that have consequences for waste reduction are just-in-time inventory management and efficient service processes in regard to staff.
By following all the steps of the process of SLR, as described in the articles, practitioners can guarantee that the applied concepts are evidence-based. Establishment of a well-articulated SLR process with specific steps allows stakeholders to evaluate the impacts of several managerial strategies making managerial decisions evidence based and result oriented. Such methodological rigour not only helps in responding to the ongoing issues in the casual dining sector but also helps in filling the gaps in the discuss on operations and revenues management strategies.
Literature matrix
Author & Year | Focus | Methodology | Key Findings | Relevance to Study |
Mohamed et al. (2022) | Impact of digital menus on customer behavior and satisfaction | Quantitative analysis of customer feedback | Customer satisfaction positively affects return visits and recommendations; menu presentation improvements increase financial performance. | Highlights the importance of satisfaction in improving customer loyalty and financial outcomes in casual dining. |
Kaewmahaphinyo et al. (2020) | Factors influencing customer satisfaction in food courts (FC) | Literature review | Service quality, food quality, and ambiance are critical for customer satisfaction and willingness to pay premium prices. | Identifies major factors affecting customer satisfaction, vital for pricing and menu planning strategies in casual dining. |
Xing (2023) | Effect of service technology on customer behavior | Case study | Online reservations, mobile ordering, and digital payments enhance customer dining experience and operational efficiency, driving revenue growth. | Emphasizes the role of technology in improving operational efficiency and customer satisfaction in casual dining. |
Kim et al. (2020) | Sustainable revenue management practices for queuing restaurants | Field research | Using technology to speed up service delivery meets customer needs and enhances revenue management strategies. | Demonstrates the importance of service delivery efficiency in aligning with customer expectations for revenue growth. |
Murimi et al. (2021) | Strategic revenue management practices (RMP) and customer satisfaction in casual dining restaurants | Theoretical framework | Dynamic pricing and promotions positively impact financial performance through increased customer satisfaction and perceived value. | Connects pricing strategies with customer satisfaction, critical for sustainable profitability in casual dining. |
Webb et al. (2023) | Variable pricing strategies and customer perception of pricing in casual dining | Mixed bundle approach analysis | Variable pricing increases revenues by offering promotional offers tailored to customer preferences. | Demonstrates how strategic pricing can boost revenue and customer satisfaction in casual dining. |
Meatchi et al. (2021) | Perceived fairness in pricing and its impact on customer behavior | Survey and itemized scale analysis | Unfair pricing perceptions lead to negative customer emotions, dissatisfaction, and reduced return intentions. | Highlights the importance of fair pricing in maintaining customer loyalty and avoiding revenue loss in casual dining. |
Guizzardi et al. (2022) | Dynamic pricing and perceived quality of online offers | Temporal construal theory analysis | Customers associate lower prices with substandard products, affecting their willingness to pay for casual dining experiences. | Stresses the importance of aligning pricing with perceived value in maintaining customer satisfaction in casual dining. |
Sharma et al. (2020) | Loss aversion in customer behavior and its effect on service reviews | Sentiment analysis of customer reviews | Negative customer experiences are more likely to result in complaints, emphasizing the need to reduce perceived loss through service improvements. | Demonstrates how reducing perceived loss can help improve customer reviews and loyalty in casual dining. |
Wang and Jiao (2022) | Choice architecture and loss aversion in casual dining pricing | Behavioral study | Framing prices to minimize perceived loss can positively influence customer behavior and improve tipping practices. | Suggests how pricing strategies can reduce customer resistance to high prices, boosting revenue in casual dining. |
Lin et al. (2024) | Diminishing sensitivity to price changes in casual dining | Tourism decision study | Subdividing menus into value-added packages can increase acceptance of higher prices without customer dissatisfaction. | Provides insights into menu design strategies that maximize revenue by leveraging psychological pricing techniques. |
Namini & Kapoor (2023) | Psychological factors influencing pricing strategies in competitive casual dining environments | Empirical investigation | Understanding customer emotions about pricing helps casual dining operators create better pricing and menu strategies. | Highlights the psychological impact of pricing on customer decision-making, essential for optimizing revenue management. |
Meintjes & van Rensburg (2022) | Lean management practices in casual dining restaurants | Business Process Management System (BPMS) study | Lean management enhances operational efficiency and customer service, improving table turnover and profitability. | Shows the application of lean management to streamline operations and improve profitability in casual dining. |
Conclusion
One of the important considerations that one should take forward is the focus on the need to merge all these frameworks into one that aims at creating a profitability as well as enhancing the customer experience and organizational performance. The shift in consumers’ behaviors also implies that casual dining restaurant must frequently change their product portfolio based on the theories espoused by these theoretical frameworks.
CHAPTER 3: METHODOLOGY
Introduction
The aim of this chapter is to present the research methodology that has been applied for exploring the potential of UK casual dining restaurants’ revenue management maximization scenario. This section provides information about why the study employed the kind of research design that was used as well as data collection procedures. The key points regarding the approach include:
The result shows that secondary research is the most commonly used method.
Data from academic databases of academic papers, governmental databases and papers.
Applying of thematic analysis with Braun and Clarke guidelines
This chapter focuses on the showcasing the appropriate way through which the research objectives will be met and to show the preciseness of the conducted study.
Choice of Research Design
As a result, secondary research was selected as the most appropriate research approach in accomplishing the aim and objectives of this study. This decision was based on several factors that make it the most appropriate approach for investigating revenue management in UK casual dining restaurants:
Comprehensive existing literature: The subject of restaurant business revenue management especially in the United Kingdom has attracted a lot of research. That is why the abundance of similar studies gives prospective researchers sufficient grounds for inquiry without the necessity to gather fresh empirical evidence.
Time and resource efficiency: Secondary research is helpful in reviewing a huge amount of information within the time scope of this study. It reduces on the need to undertake rigorous primary data collection techniques such as questionnaires or interviews.
Broad perspective: Using this approach of secondary research, it is possible to present a broad perspective of the case of different casual dining restaurants in the UK and their revenue management strategies as opposed to the case of primary research where a sample size is usually limited.
Access to high-quality data: Top-tier academic databases and official government Web sites offer full-text peer-reviewed articles and reports for the research methodology to be employed in the analysis of the data set.
Alignment with research objectives: This research will thus seek to draw together literature available and establish the best practices required in the revenue management of casual dining restaurants in the United Kingdom. This type of exploratory and synthesizing study makes use of secondary research very effective since it does not require any primary data to be collected.
Even though secondary research exhibits these advantages, there are several disadvantages taxing its use foremost of which include outdated information that might not necessarily tap the most current data of a certain niche and the efficiency in data collection not being precise as it can be when creating research questions to answer. Nevertheless, by entrusting recent and pertinent sources and attentively analyzing them, the limitations may be controlled in order to encourage the credibility of the conclusions.
Construction of the Method
To ensure a systematic and rigorous approach to the secondary research, an assessment schema has been developed to guide the data collection and analysis process. The following table outlines the key components of the methodology:
Component | Description | Criteria |
Data Sources | Academic databases, government reports, industry publications | Relevance, credibility, recency (within last 5 years) |
Search Strategy | Keywords, Boolean operators, citation tracking | Comprehensiveness, precision |
Inclusion Criteria | Type of publication, relevance to UK market, focus on casual dining | Alignment with research objectives |
Exclusion Criteria | Non-English publications, studies older than 5 years, non-UK focused | Ensure relevance and currency |
Data Extraction | Key findings, methodologies, recommendations | Systematic recording of relevant information |
Quality Assessment | Evaluation of research design, sample size, analytical rigor | Use of established quality assessment tools |
Thematic Analysis | Application of Braun and Clarke framework | Systematic coding and theme development |
Synthesis | Integration of findings across studies | Identification of patterns and contradictions |
Explanation of the assessment schema:
Data Sources: Google scholar, EBSCO, Science direct, etc. are the foremost source for research papers and journals to achieve the proposed work. Besides, other official UK government sources as well as other reliable sources of the industry will also be used to find more reports and statistics.
Search Strategy: The key is that a detailed search strategy will be proposed with references to the terms connected with revenue management, casual dining restaurants, as well as the UK market. The use of. Bool terms will enable the enhancement of the search results, and citation analysis allow for an identification of other sources that might be relevant to the study.
Inclusion Criteria: Articles will be selected with the emphasis on their contribution to the understanding of revenue management in UK casual dining restaurants, their credibility of the sources they originate from, and their ability to provide answers to the research questions posed.
Exclusion Criteria: To make the results as recent as possible, works published earlier than five years ago, works that are not oriented primarily on the UK market, and the works published in languages except English will be rejected.
Data Extraction: A standard form will be employing to ensure the consistency of extracting data from all sources such as the findings, methodological approaches, and recommendations for revenue management practices.
Quality Assessment: The quality of each included study’s methodological quality will be assessed using pre-developed suitable assess tools for the type of the research.
Thematic Analysis: The chosen method of data analysis is the Braun and Clarke’s framework for thematic analysis where patterns in data will be identified, analysed and reported. This process involves six stages: implementation involves introduction to the data, code generation, theme searching, theme review, theme defining and naming as well as report writing.
Synthesis: The last step shall incorporate the findings from the various sources to help in a synthesis of the conceptual framework on best practices of revenue management for casual dining restaurants in the United Kingdom.
Data Collection Process
Secondary data collection process will mainly emphasise on collecting accurate and up-to-date information relating to revenue management in UK casual dining restaurant sector. The process will involve the following steps:The process will involve the following steps:
· First scouting based on the defined search terms within the chosen academic databases and official web-sites.
· Titles and abstracts review and comparison with the inclusion and exclusion criteria applied.
· Detailed analysis of sources which meet the criterion of the first stage.
· Pertaining to the systematic data extraction using the form which is standardized.
· Possibly, quality assessment of any resource which makes its inclusion to the present study
· Arrangement of the data collected from a source in order to ease comprehension and subsequent analysis.
The actual record of search activities as well as the decisions made on inclusion and exclusion as well as quality will be carefully documented and protocoled for purposes of review and assessment at later dates.
Data Analysis Method
The identified secondary data will be analyzed with the help of the thematic analysis adopting the approach. This method is suitable in this study since it helps to synthesize information gathered from different sources in order to come up with broader themes regarding the revenue management strategies. The six stages of the thematic analysis process are:The six stages of the thematic analysis process are:
· Familiarization with the data
· Searching for themes
· Reviewing themes
· Defining and naming themes
· Producing the report
These rigorous steps in the thematic analysis will make it easier to identify emerging strategies, trends and best practice in revenue management for UK casual dining restaurant and possible gaps or contradictions in the current research.
Conclusion
This has provided a road map for examining the proposition that the UK casual dining restaurant, can increase revenue through revenue management using secondary research. Thus, the study seeks to contribute to a better understanding of the strategic approaches toward the management of revenues in this sector by using a systematic and comprehensive technique of data collecting and samples’ quality assessment and thematic analysis. As much as the technique adopted in this study lacks a certain depth, this approach presents a broad and efficient way of attending to the objectives of the research within the available constraints.
CHAPTER 4: FINDINGS AND ANALYSIS
Introduction
Like any other area of casual dining, restaurant providers are always looking for ways to increase profitability and at the same time progress their business processes. Some of the significant factors in achieving these objectives have therefore become revenue management practices especially through lean management. This paper aims at exploring the usefulness of lean management principles in casual dining and the ability of an organisation to employ lean management to improve its approaches to pricing and consequently increase the amount of profit. Therefore, based on the research and analysis of the relationship between lean practices and revenues, this paper will present recommendations that will benefit the managers of restaurants aiming at the attainment of efficiency and competition in the market.
Findings and analysis Theory 1
The following are some of the core strategies which can be employed by casual dining restaurants in order to achieve the right balance in the process of pricing and maximization of profits. Some of them are dynamic pricing, strategic discounting and customer segmentation. Dynamic pricing basically involves striking price changes in accordance with the trends of the demand and the particular hours of dining. For instance, a restaurant may use high prices during weekends or during holidays when many people are likely to be going out for the meals hence optimizing its revenues during the busy times of the day (Tyagi, and Bolia, 2021, pp-16). On the same note, low prices when sales are low can lead to customer attraction thus guaranteeing constant flow of shoppers which is of paramount importance in covering operational costs. Another useful technique which can be employed in the casual dining restaurants is the use of strategic discounting. Time sensitive promotions, dinner specials, and specials that allow people to buy a meal to get a lower price on another meal, may attract customers, get more business during slow times and bring back customers who have left.
However, customer segmentations are a central determinant of how pricing strategies are done. In light of this, restaurants are able to define different types of customers they have and then be able to try and cater for them depending on whichever segment they belong to. For example, a family may prefer an offer that is pegged on calls like ‘2 pieces of chicken and fries go for x amount’, while the young clients may be more inclined to fancy new dishes or novelty with their meals that comes with a certain price tag (Paguirigan, 2022). Another successful approach that can help in incorporation of the strategy of optimized pricing is the integration of loyalty programs. These programs not only explain specific patronage behaviors, but also gather useful information that can be used in more targeted promotions as well as special offers which in turn increases the customer experience and organizational profitability.
It was concluded that appropriate execution of revenue management practices has widespread influence over casual dining restaurant pricing models and resulting operating profits. Effective planning on demand and capacity can help in reducing the distortion in price by helping in setting the best price that will suite the market. For instance, establishments that properly coordinate between reservations and those that take ‘walk-ins’ have the ability to control and adapt products in the current system to make the best out of available assets than improving customer experience. Another easily identifiable consequence of revenue management practices relates to pricing flexibility (Webb, et al. 2023, pp-22). Fluctuation of the prices of the products on offer in accordance with the ability of the restaurant to regulate demand or customer behavior enables restaurants to achieve and sustain high occupancy levels while at the same time increasing the per capita consumption rate among the customers. For instance, when changing the prices depending on the customer demographic can make the restaurant attractive to other clientele that may assume the charges are considerably high.
Furthermore, it is a fact that the application of RM practices leads to the improvement of financial performance indicators. This study concluded that restaurants in the business that involve themselves in complex RM activities will have high profit margins than restaurants that practice such tactics. Consequently, recognizing and responding to changes in the value perception of consumers, restaurants can aim for improved satisfaction and loyalty of the consumers, which in a way leads to higher profitability (Yost, et al. 2021, pp-408). With the current occurrence of post pandemic Scolding, it is possible to say that the use of effective technologies such as data analytics and AI will be crucial. With these tools, the restaurants are able to capture loads of customer information in a bid to understand their preferences, times of high business and efficiency of price policies. It is really helpful in fine tuning of the pricing models and in the process, getting the maximum possible revenues.
In casual dining restaurants, it is not possible to overstate the nature and extent of the connection that can exist between revenue and profit. Strategies in revenue management do not only impact the pricing mechanisms but also play a role in improving the general operation of an enterprise and this correlates to its profitability. According to the findings made in the course of the study, restaurants that implement better RR practices have a higher RevPASH compared to restaurants that implement ineffective RM practices. This increase might have been as a result of being able to predict the customer demand profiles and come up with the right pricing strategies to complement them. Furthermore, the place of consumer behavior theory cannot be over-looked especially as it helps to explain this relationship (ARYA, and KOLAPKAR, 2024). Understanding consumers’ buying patterns helps restaurant businesses refine their menu to realize societal value that translates into increased revenues as well as develop more effective marketing communication approaches. For example, knowing when customers tend to eat out, or, which promotions would influence a particular segment of customers can drive better and rational pricing decisions.
Besides, the issue of perceived fairness plays a critical role and greatly influence the level of customer loyalty and retention. RM policies should fairly price products in order to maximise returns while at the same time the pricing mechanism should not be too exploitative to the consumer. Customers feel easier to come back if they believe the price they have to pay is reasonable and thus increase steady-state profits (Herrera, and Young, 2023, pp-426). It is concluded that RM necessarily needs to be an integrated process which involves the customer feedback into the processes of the firm, as well as the constant assessment of conditions in the market. This kind of evolution in casual dining restaurants targets the ones that follow new strategies in revenue management besides being customer focused and should result to improved profitability.
Customer behavior theory provides a useful framework in understanding the fundamentals of revenue management the casual dining restaurants. Service consumers in restaurants make their dining decisions on different factors such as the price sensitivity, perceived value and other speakers. For instance, families and groups dining out may consider the value related promotions and deals than individual customers who may be willing to pay for luxurious quality related brands and products (Lee, et al. 2020, pp-230). The COVID-19 crisis greatly shifted the customer preferences and consumption patterns by favoring the delivery and outdoor dining formats. There was an observed improvement of the performance metrics of restaurants that were able to promptly adjust their RM strategies to the shifts. Consumer interaction, feedback, and digital marketing insights can be collected that give restaurants the knowledge of how to match their service offering to the consumers’ needs during instability.
Another behavioural factor that impacts on the activity of revenue management is customer perceptions of fairness of pricing strategies. It was found out that customers are willing to pay more for their products if they felt they are getting their money’s worth, or where they agreed to the changes in price. Therefore, the active communication on the pricing policies will have a positive impact on customer satisfaction and at the same time protect profitability (Bonfanti, et al. 2023, pp- 2023). Leveraging such values gives marketing efforts that are embedded through advertisements, customer promotions, and reward programs a massive boost in the behavior change of customers. Casual dining restaurants can then therefore count on the volume of sales volumes to build loyalty through appealing to customers’ emotional and social appeal or need to create memorable occasions through dining experiences which is the means to sustained profitability.
The study also justifies that casual dining restaurants require proper and efficient revenue management in order to sustain and grow in a cut throat business environment. Using the tools of price analytics and knowledge of consumers’ behavior, restaurants increase their profit by improving the efficiency of price management and customers’ satisfaction (González-Serrano, and Talón-Ballestero, 2022, pp-1275). Cautious changes in passenger preferences are characteristic of today’s world, which, as a result of the COVID-19 pandemic, obliges restaurants and cafes to adapt in order to provide the demanded services and improve the effectiveness of the activities. In conclusion, it will be noted that having a strong appreciation of customer behavior theory coupled with sound tactical revenue management techniques will be central to the success of casual dining operators. Further research should aim at investigating the multi-folded taxonomy of the relationship between consumer behavior and pricing along with their effect on other financial aspects of the restaurant business in the future.
Findings and analysis Theory 2
In casual dining restaurants, revenue management entails the identification of the optimal price to charge its customers, control of stocks and the determination of customer demand. This idea is crucial to keep the profitability in an industry which presents itself as having very small profit margin and volatile customers. Contemporary competitive forces that have emerged have seen establishments incorporate mastery in revenue management techniques that incorporate data in establishing demand and pricing. The concept of revenue management enables casual dining restaurants to very flexibly charge customer different prices depending on certain factors such as supply and demand, time of the year, and other factors. In terms of capacity and resource utilization, these restaurants can thus obtain the highest possible returns for their given services. For example, restaurants may charge higher prices during the busy hours while offering promos during off peak seasons to entice many people to dine at their establishment, while at the same time they have surplus of the products (DiPietro, et al. 2020, pp-155). Thus, the main objective of revenue management can be defined simplistically as identifying which product should be sold to which customer at what time at what price. This is due to the fact that market trends, customer preferences, and behavior pattern need to be comprehensively understood; they are therefore, a strategic component of casual dining venues.
In this case, it can be seen that several measures can be taken into consideration in order to obtain the optimal target for the price and in order to get the maximum amount of profit in case of casual dining restaurants. These are dynamic pricing, value-based pricing and psychological pricing. Dynamic pricing means that the price is changed from time to time depending with the current demand and the market trends. For instance, with regard to pricing strategies, eating places may decide to charge more prices during specific time constraints including the weekend and holidays. Besides enhancing the eateries’ revenues, the strategy also benefits table turnover rates which can increase the number of customers served during his/her shift which means more earnings in total for the business (Weiner, 2020, pp-220). Value-based pricing is another strategic process of pricing which involves the determination of the price by the calculation of the customers’ perceived value. Those restaurants that create value propositions that appeal to the guest successfully can afford charging higher price premiums and therefore casual dining has the potential of achieving value premiums to guests who are willing and able to pay for restaurants with higher value propositions. The above work indicates the perceived value from a customer’s view, which can also be used by restaurants to compare their pricing strategies more to the preferences of the customers.
Other related strategies that are vital in influencing the creation of customer perception of value include the psychological pricing strategies. This strategy refers to the act of pricing slightly below whole amounts such as $9.99 instead of $10, thus creating an impression of a better deal. The use of psychological pricing strategies helps to boost the volume of sales and therefore result into higher levels of profit. Further, timing on a promotional. combine with such tactics as limited time offers or special meals that can also affect the notion of an optimum price. These strategies encourage the use of the restaurant’s services during off peak hours and in the process increase the restaurant’s cash inflow (Martin-Fuentes, et al. 2021, pp-34). The benefits of proper revenue management practice especially on pricing and increasing the profitability of casual dining establishments can be considered significant. The implementation of these best practices has a positive impact since it results to accurate demand forecasting within restaurants, and thus, the market trends can be foreseen. This anticipation enables firms to act proactively in modifying its price and this leads to optimization of its prices. Studious show that, through technology-based revenue management strategies, the restaurants industry’s performance can be improved. The effectiveness of these systems is that customers’ behavior can be studied in detail to achieve profitability while setting the appropriate prices based on the analytics results. Moreover, the use of surveys, or other sorts of feedback, can also help to define consumer’s preferences and perceived value, and adjust the pricing tactics, correspondingly.
In addition, it supports other key aspects of running operations with an aim of making good revenues. Since restaurant operations include reservation and table management, client turnover can be optimized in order to maximize on available tables for sales. This is because strategic pricing leads to high table turnover while at the same time not incurring a high cost in the process. COVID has given meaning to a rather recent business buzzword, namely, adaptability in the context of revenue management (Measure, 2020). Those who could adapt new practices with high levels of creativity including establishment of dining outdoors and providing take-away services performed much better financially. This flexibility underscores the ability made out of the management of revenue to turn threats into opportunities in the face of business risks in changed environment.
Revenue management and the measure of profitability in casual dining restaurants are interrelated. Efficient revenue management practices impact positively on the organizational financial outcomes through the ability to generate higher amount of revenue per seat and satisfying the customer needs. The concept refers to the analysis of customers’ behavior, the market, and the business environment to achieve marked revenues improvement. One of the elements of this relationship is the use of customer satisfaction as the means of encouraging the customers to return. Restaurants with fair and transparent price models, good customer relations, passive listening to customers’ experiences are likely to retain their clients. Customer loyalty comprises a large portion of long-term revenues making the control of customer relations an essential component of revenue management.
Additionally, quality pricing strategies link up the revenue management and the profitability aspects. Those outlets that have appropriately priced their products based on customer willingness to pay formula have been proved to earn improved margins. Applying such analysis in fixing prices indicates that, in competitive societies, it is possible for different business entities to be relevant and profitable (Nampushi, and Nankaya, 2020, 09). Furthermore, there are other key factors like fluctuating food prices and cost of operations—which can only be managed well through a proper consideration of revenue. The flexibility in pricing can reduce or totally eliminate the effects of increased cost hence the profitability level is well maintained despite the condition of the market.
Pricing theory makes a lot of stress on pricing decisions and how the price is to be determined and why it has to be determined in accordance with the market demand and customer behavior and competitors also. In this theory it was pointed out that that the right price has an enormous impact on the outcome of operations in casual dining restaurants. This way the establishments will be able to determine what price range makes most of the consumers demand it while at the same time making decent profits (Meatchi, et al. 2021, pp-3165). New research shows that the flexible pricing strategies are being adopted by casual dining restaurant chains because they provide much needed savings during high demand periods. This makes prices more flexible in the sense that a price can be hiked during the peak traffic period while during other periods, low traffic is charge a comparatively lower price in order to lure customers.
Besides, according to the Theory of Pricing, psychological factors significantly influence the consumer’s purchase behaviour. Components of the price such as the price elasticity of demand which defines the extent to which consumers’ demand is affected by a change in price are important in determining when and how to change the price of a good. The management of a restaurant that is in a position to adjust to the price changes of its identified customer base has the ability to make business decisions that will complement the improvement in the generality of the restaurant’s profitability. The use of advanced technologies as a part of the pricing analytics intensifies the efficiency of this theory. Establishments that employ analytics platforms can extract information from the data and achieve accuracy in the setting of price structures and other aspects that affect the financial position of the business positively. This cause-oriented efficiency allows the establishments to monitor the prevailing market trends and subsequently adapt prices to mimic the ever-changing consumers’ market demands, thus promoting a more effective pricing model.
The revenue management practices and its relationship with pricing strategies in CDRs is constitutive to improve the profitability of businesses. Knowing the impact of customers’ behavior and adopting strategies of dynamic pricing are important for revenue optimization in a highly competitive environment. In the light of these changes, the adoption of these emerging technologies and strategies which align themselves with the Theory of Pricing will become critical to the growth and profitability of this segment of the casual dining industry (Vicente, et al. 2022, pp-32). This conclusion substantiates the need for further years of study on the effective application of technology experience and understanding the consumers in order to explore future business growth and efficiency.
Findings and analysis Theory 3
Revenue management is a tactical method adopted by different businesses with special emphasis on the hospitality industry to manage revenue through an effective control of price and availability. For casual dining restaurants, the role of revenue management is profound since it directly impacts the restaurants’ revenue and as a result, the overall profitability. This last determinant is the major most complex mixture of demand forecasting and supplies in casual dining. With the help of data analysis, based on historical records, customers’ traffic and external factors, including events or seasons, restaurants can manage their pricing strategy in a correct way that supposes maximal occupancy and sales (DiPietro, et al. 2020, pp-158). According to the strategic planning, the ultimate goal is to have the right product for that right customer at the right time and for the right price. This demand-oriented perception would make the restaurants avoid making losses through either not serving demanding a lot of food during busy hours or became over-booked when few customers are likely to be served during slow business periods.
Also, from the case of Cadbury, it is evident that sound revenue management has benefits for improving customer experiences. The fact is that the unique price segments also influence consumer behavior, and therefore restaurants should better adapt their offers. For instance, in the provision of promotions and free gifts at spare time not only helps in attracting more customers, but also assists in controlling the flow of consumers in the restaurant and thus helping to ensure a more systematic consumption, recognizing the customer’s preference and purchasing behavior conclusively underlines (Gonzalez, et al. 2022, pp-1429). There are several measures that can be adopted on aspects of consumer behaviour and perceived value that can be implemented for improving the pricing in casual dining restaurants. These strategies should rely on the Perspective Theory which postulates that consumers make decisions based on perceived gains and/ or losses than the actual outcomes. Dynamic pricing is one of the most common approaches which involve changes in prices in reaction to demand. For example, in restaurants, they can decide to charge a little more during the rush hours in order to reflect the high demand for their food and provide_discounts during the off-peak hours to make customers demand more food. In addition to high profit, this technique affects the turnover by the number of seats and notably increases the revenues per available seat.
Another strategy is to implement the value-based pricing which is a strategy that deals with customers perceived worth of the products, not the cost of production. This approach needs the evaluation of customer segments and how much they are willing to spend and this could vary from one segment to another. Thus, setting a price that factors the perception of the place’s value can mean capturing consumer’s surplus and increasing the sales volume. In addition, restaurants may use other psychological pricing strategies including Ppub seeming to make offers more appealing (charm pricing for example $9.99 instead of $10). This tactic is actually takes advantage of consumer behavior since it involves perception of value. Pricing strategies that are consistent with the behaviour of consumers can encourage more use of services and products by the same consumers hence improving revenues (Oduor, 2020, pp-110133). Pricing strategy enhancement and general improvement of the casual dining restaurants’ main sources of income are as follows: In other ways, restaurants can use data analytics and modeling of the customer demand to set prices that will fit the available market and customers’ tendencies. Analysis of the results shows that according to the received knowledge, the companies using the most advanced systems in the field of revenue management have higher financial scores and better adapt to shifts in the markets. These systems provide information on the previous sales data, real time market data and competitor’s price data, to make real time price decisions. Therefore, the restaurants can be able to maximise its revenue prospects by making the right price changes based on the demand factor.
In addition, revenue management practice has a significant link with the consumer satisfaction and consumers’ notion of pricing. Whenever consumers have the impression that they are getting good value for their money because of properly defined revenue management systems there will likely be repeated business. Also, when the pricing policies adopted are clear and accord the customers with perceived value, customer loyalty is promoted which also adds to long term profitability (Shin, et al. 2024, pp-710). One can only emphasize the role that flexibility plays in pricing models, particularly during periods characterised by adverse macroeconomic conditions, including the COVID-19 outbreak, which significantly impacted people’s dining habits. Establishments that adopted strategic pricing models early enough and developed new outlets of service provision including take away and outdoor dining continued to generate revenues even where the normal dining services were nearly impossible.
The interconnection between the concepts of correctly implemented and followed revenue management and the performance as measured by profitability in fast casual restaurants is complex and rather nuanced. As companies apply complex mechanisms for controlling products’ supply and prices, they often encounter regular enhancements of their net profit figures. The integration of the revenue management goals with the company’s profitability objectives is crucial since the competitive advantages can be sustained in the restaurant industry. In this way, revenue management affects revenue generation and operating costs by improving the decision-making process on the issues of price, stock and customer categorization (Meatchi, and ERICKSON, 2022). Logically, it becomes possible for restaurants that apply the analytical tools to segment its customers, where it establishes a notion of the high-value customer as well as the price-sensitive, to employ the differentiated pricing strategy, which optimally creates the best revenue-generating model for matching customer demand with restaurant type.
Further, the culture that is practiced in an organization with regards to revenue management has a bearing on financial performance. When the casual dining restaurant employees are enlightened on the aspects of revenue management, then the staff members can align their duties in a manner that will lead to the delivery of service to the clients and at the same time make the most out of profit making opportunities. The front-line staff that understands the concept of price and customer value will also be in a better position to relate and communicate with the customers to ensure a better dining experience thereby increasing the tips and repeat clientele. Other opportunities for improving profit levels lies in the deployment of technology facilitated tools in the revenue management procedures. For instance, POS systems that are integrated with analytic tools can capture consumers’ habits of products or services and provide information to deploy marketing plans or modify the product portfolio in a way that may be suitable for restaurants to offer promotions or new products in accordance with the existing consumption patterns of customers.
The theory proposed by Kahneman and Tversky known as Prospect Theory shows that how people refer to losses and gains differs with a strong impact on the decision making process. In casual dining context, this theory may help explain how price communications make sense to the consumers. A major consequence of Prospect Theory is the variability of risk assessment between gains and losses. Losses are estimated to be psychologically more painful than equivalent gains, which gives people a tendency to avoid such losses than in chase of gains. As such, this insight will help casual dining restaurants when it comes to the arrangement of their price models. For instance, a restaurant can increase appeal of gain working with discounts or limited-time offers, to reduce the loss aversion the restaurant can frame the prices of the menu items which will highlight the perceived value. All these could be through the sales promotion stories that revolve around the possibility of saving, say when purchasing certain foods or through other times of the day, which in fact appeal to the psychological predispositions of the decision.
Also, knowledge of the baseline expectation of the customer, or what he or she sees as normal in terms of prices has a great impact on the prices that companies set. Burger joint are able to alter their prices to reflect the change in its value through perceived image change, promotions, changes in the level of service provided. Through the changes in prices concerning the expectations of the customers, the restaurants are in a position to maneuver the perceptions in order to meet the demand (Dingil, et al. 2023, pp-461). Studies also show that the adaptation of price strategies that are based on the principles of Prospect Theory will have impact on the customers and eventually boost sales. For example, free gift coupons presented for repeated sales lead to a sense of consumers’ loss (in terms of missing out on rebates) if they don’t come back; this helps in customer retention.
Based on implications for increased and improved revenue management practices casual dining restaurant to enhance sustained growth and profitability, casual dining restaurants should undertake the following recommendations. First of all, acquiring information technology that supports data processing in real time will help in making proper pricing decisions. These can be enshrined within POS systems in order to create richer insights into the consumers and transactional activity versus a reliance on historical data trends amongst other things. Secondly, revenue awareness culture in the staff can enhance and advance customer relations and effectiveness of price tactics. When the customer service providers are knowledgeable on the effects of service quality both to the customer and the company, they are in a better position to sell related products and services.
Findings and analysis Theory 4
Lean management is one of the management systems focused on the rationale that comes with the main goal of minimizing or eliminating the wastage of resources in organizational processes. To casual dining restaurants, this viewpoint helps to manage resources so that they are utilised efficiently, hence helping increase productivity amongst customers. The core philosophy of lean management focuses on value creation and non-value added cost, and any expense that does not bring value to the customer is considered as waste. Here in the casual dining lean management practices the various factors associated with the same include the process mapping, elimination of some process and making them lean (Baek, and Choe, 2020, pp- 5408). Examining different details of the restaurant functioning, including and especially the points that are most crucial to the kitchen work and interaction with clients, the management can eventually find out the opportunities for optimization that will enhance the service quality and performance. For instance, procedure of standardized work for preparing food and handling food can eliminate variation and maintain quality of the food and consistency in service delivery.
Every day, lean practices also assume staff engagement when it comes to the improvement of working processes. Enabling them to discover and report any areas of slack or proposal for progression contributes to the company culture. Where team members focus their input to increasing efficiency, the restaurants that they work in can improve productivity; the working environments can become more satisfying, and consequently, turnover can be reduced and service quality can become improved. Lean management thus has many ways through which casual dining restaurants can implement the right pricing strategies when managing its factors. One of them is the performance of value stream mapping in order to map the flow of materials and information to deliver products and services in restaurants. This analysis provides a means of analyzing cost and value hence helping in achieving cost efficiency and improving customer value. For instance, by improving on the time that customers spend waiting and the frequency of the services delivered, the restaurants can use the positive changes to readjust the prices to correspond with the improved quality of service (Tyagi, and Bolia, 2021, pp-8). Applying the lean principle of correcting inventory which actually means ‘just-in-time’ (JIT) inventory management can also result in improved strategies of pricing. This case shows that it is possible to match inventory storages in restaurants with the actual customer demand and thus avoid losses in perishable products. Purchasing materials in large quantities also saves on cost while making it possible to change prices in response to the market forces. When resources are properly deployed in restaurants, they are able to set right price strategies that will enable them to break even and even post profits.
This pricing strategy under the lean framework entails offer of prices based on real time data. By applying analytical techniques, the restaurants are able to track the customers and the overall market trends, it becomes easy for them to change their prices depending on the trends of the market. You better use promotional techniques popular during ‘low sales,’ like the discounted menu, special offers or anything sometime during a day only to make sure that those moves were most effective during low periods. From the above observations it is quite obvious that the adoption of lean management practices affects the profitability of casual dining restaurant significantly (Paguirigan, 2022). By minimizing the levels of waste and increasing operation productivity, the restaurants can be able to achieve high levels of profitability. Lean principles first and foremost embrace reduction of inventories, other than the absolute necessary, non-value-added movement, and waits, as these activities consume resources and erode profits. For example, by optimizing the kitchen layout and the workflow within the space, restaurants can make hundreds of thousands of dollars in savings just because employees, who are the main cost-driver, won’t spend time engaged in pointless movements. Besides, the application of lean methodologies to increase the precision of demand forecasting helps the restaurants to monitor and control the inventory level, thus reducing food wastage and losses due to uneaten stocks. It can result in the offering of lower prices for the meals to the customers without a compromise of the intended profits in the restaurant.
Also, lean management practices encourage the company to evaluate its ongoing operational processes, products, and services offering constantly, often typical to restaurants. This cyclical process enables restaurants to remain relevant with the desired consumer tastes thus improving on the satisfaction and loyalty status of customers. Similarly, when customers are satisfied, there are high chances that they would return to the restaurant or refer it to other people, thus boosting its sales, and profitability. Studies show that restaurants that have implemented lean management have recorded a change in operating efficiency coupled with greater satisfaction among the customers thereby culminating into increased profits. To fast food restaurants, it is vital for efficiency to be coupled with customer-oriented strategies as that is setting the trends for the future of casual dining eateries. Lean management practices and the strategies toward revenue maximisation in casual dining restaurants are two facets of same coin (Herrera, and Young, 2023, pp-437). Working according to principles of lean management leads to giving power to restaurants and enhancing their controls which in turn has a direct bearing on the capacity to choose the most proactive revenue centric strategies. Through integrating the concepts of waste elimination, efficiency enhancement and the improvement of the encounters between the restaurants and their customers, lean management places the restaurants to take advantage of the revenues in the right manner. This paper will argue that one lean management principle that affects revenue optimisation is the focus on customer value. When customers are fully profiled it becomes easier for restaurants to understand how to meet their expectations concerning certain factors like quality and speed of delivery, amongst others. This association is not only the driver for the increased satisfaction of the customers but also may help the restaurants to set the premium prices for the value-added products or services.
Also, by using lean management tools to conduct root cause analysis restaurants can identify the impacts to the revenues. For example, regarding a certain dish on the menu, if a restaurant is not creating the expected revenues of sales, it investigates the method of food preparation, where it procures its ingredients, and how it markets the dish to patrons (Webb, et al. 2023). From there, changes can be made in order to improve the contributing factor to its sale and in turn revenue. This is a proactive and analytical method of solving issues as practiced in lean management and can be a game changer in revenue performance.
Some of the casual dining restaurants have incorporated lean management principles and the change has been seen to have positive impacts on the operations and profitability of the restaurant. One such case is a large format food chain that had decided to implement lean in its kitchens to cut out waste. The chain was able to standardize food preparation techniques which enabled it to overcome some of the problems it had with delay in food preparation and also food that was prepared in one restaurant not being similar to that prepared in another restaurant. This on the same note helped satisfy the customers while on the other hand reducing costs to meet the employees’ wages thus increasing profitability (Yost, et al. 2021, pp-410). Another typical example is the family run restaurant that decided to lean the inventory. Through use of the just in time inventory system, the restaurant was able to avoid wastage of food materials as it only ordered what was required for preparation of the meals. The better quality of the offered products positively affected customers’ attitude, which resulted in more visits and the introduction of a nominal increase in prices due to increased product values.
Summary of findings and analysis
The following is the brief of customer behaviour theory where consumer preferences, price sensitivity and perceived value hold importance for evaluating the industry of casual dining restaurants. Thus, the key factors that define the success of the operational RM include obtaining and interpreting the data on the customers’ behavior, which enables restaurants to adjust their prices. One of the major strategies includes the use of dynamic pricing, whereby prices change depending on the demand. For instance, a restaurant to make optimum sales may choose to develop a strategy of raising the prices of their meals on a particular day such as weekends and holidays. On the other hand, low prices during low period increase the number of customers benefiting an entity by and by providing revenues that offsets the fixed cost of operation.
Another profitable method is called strategic discounting, thus, attractive offers, for instance, a ‘buy one, get the second for half price’, or a set of meals at a certain period of time can help sell a great number of copies, besides, people will come back to hear about more such offers. Also, this paper argues that there is a role of customer segmentation in relation to defining price strategies. Families might have a better response to valuative appeals and young customers, the high-priced novelty dishes in the menu. Keeping with the above points, the third component of the marketing mix is RM, which is augmented by loyalty programs in an attempt to lure the client back for more while at the same time helping to build a database of information on the client’s preferences. Such as with RM practices, integrating these activities makes financial bottom lines better with well done demand forecasts and capacity control. RM helps to optimize prices for restaurants depending on clients’ demand: that means higher incomes for restaurants and happier customers. During the pandemic, the use of data analytics and artificial intelligence was or is becoming relevant. Measures such as examining the performance of customers and changing the price which is used or charged by the restaurants can lead to the exploitation of the revenue opportunities fully. The study brings out evidence that RM practices enhance business performance through enhancing operation efficiency, customer satisfaction and lastly the profitability. The issue of customers’ loyalty remains at the core of RM later on, the balance between price and value is a critical factor to maintain customers’ loyalty and ensure a constant stream of a steady revenue.
Another major aspect of the casual dining restaurants is the price theories whereby restaurants digests on the most appropriate price to charge consumers to meet the demands and at the same time achieving its main objective of making profits. Today’s RM strategies utilize data analysis for predicting the demand and making appropriate price decisions. It is further classified into, dynamic pricing, value-based pricing and psychological pricing (Kambli, et al. 2020, pp-62). Dynamic pricing demands more frequent changes in the price of products, for instance, during the weekend or holidays, something that acts as a way of boosting the revenues of the business and customer turnover. Information-based pricing also adapts to the information dispensed to consumers and permits higher value to lead to higher prices especially for premium value dealers such as restaurants.
Psychological pricing including use of low round numbers (e. g. $9.99 instead of $10) gives the impression of better deal thus having higher tendency in the sales. Other strategies which are used in RM and contribute to the constant cash generation comprise the offering of special meals during the off-peak times as well as the prospects for time-bound promotions.
The implications of the results suggest that effective RM systems, especially those based on technology, enable the restaurants to learn about customers and their price sensitivity. Pricing strategies when correlated with accurate demand forecasting maximizes its price without compromising on the customer satisfaction level prevalent in restaurant business. The studies reveal that the persistence with the flexible pricing strategies and opening the delivery or takeaway services improved the financial performance of restaurants during the post-pandemic period.
Also, customer satisfaction and customer loyalty are again important determinants of pricing policies in a business. Being clear and offering a fair price has the loyal customers, which in turn affects the company’s revenue in the long run. RM, when integrated with data analytics and real time market updates it makes restaurants to be more competitive and profitable given the fact that they will be able to alter their menus to meet the market trend as well as customer preferences.
Kahneman and Tversky’s prospect theory emphasises perceived value of quantity, which is an important aspect of pricing strategies of casual dining restaurants. The theory argues that consumers respond less positively to potential losses than to gains of an equivalent magnitude; the implication is that unless consumers see value of an equivalent sum, they shall avoid price increases. Thus, restaurants can utilize this by wrapping up sales promotions as well as discounts as something that is beneficial for the customer to embrace.
Pricing strategy that is applied here relates to prospect theory which enables the restaurants to set a high price during the busiest hours as well as lower price level during the less busy times of the day. Another model that is relevant in this sense is the value-based pricing which determines the ability of a certain customer segment to pay for a certain price. It means that when restaurants set up promotions and discounts which entail special value for them, customers will not feel a loss but rather a gain.
Another pricing strategy that relates to prospect theory is that of charm pricing, such as $9. 99 that increases the perceived value of the deal. The establishment of such perceptions as saving or receiving special privileges such as member discounts increases satisfaction and hence customer loyalty among restaurants.
The result indicates that prospect theory assists in the understanding of customer responses towards pricing tactics which would assist restaurants in improving their RM strategies. Making special offers and discounts (but at the same time, being careful with perceived value) is useful for restaurants because it helps to build and control customers’ perception what will be better for them, and what will bring more of profits. A business that implements price changes according to the prospect theory increase its sales and profitability since customers feel that they are benefiting from the restaurant than losing to it.
The lean management theory is centered in the idea of waste minimization, an essential technique for boosting profitability in casual dining restaurants. Lean management revolves around the creation of value; the definitions of wasteful activities for implementation and operation. This enables restaurants to cut on the expenses on services like inventory handling, food preparation and service delivery while at the same time offering the best services.
Another part of lean management is the value-stream mapping which is used in restaurants to map the flow of materials and information with the aim of finding the improvement opportunities. For instance, cutting the time customers have to spend waiting and improve service can improve satisfaction and make higher price possible. Another lean practice is the just-in-time (JIT) inventory where inventory is kept low to match need with customer demand, eliminating the wastage that is sometimes occasioned by expiry of stocked food.
The research work establishes the fact that lean management has an effect on profitability in casual dining restaurants through increase in efficiency and decrease in expense. In this case, restaurant business is hard to close or fail because lean concepts such as waste elimination and increasing efficiency makes businesses amazingly profitable. Therefore applying lean management to restaurants enables the restaurants to best adopt strategies to price their foods and to plan how to spend their money in the best way possible to capture more of the market and thus increase their revenues and thus increase the overall performance of the restaurants.
The four theories like customer behavior theory, pricing theory, prospect theory and lean management theory all work together in improving the profitability through RM practices. RM enhances accuracy in setting of price and other operations, and customer satisfaction which are the core determinants of increased revenues in casual dining restaurants.
On its part, the theory of customer behaviour assists the restaurants in the determination of the most appropriate pricing policies for the different segments of the market needs. Pricing theory helps restaurants in the determination of correct price that is charged in the market while at the same time, aiming to gain the highest profit possible. From the theory of prospect theory, one is able to understand how customers think about pricing strategies so as to make promotions and discounts cheaper to restaurants. Last is lean management theory that considers aspects of working process, production costs, and service delivery to achieve the company’s financial goals.
The study indicates that these RM practices can enhance financial performance of CDRs when supported by data analytics, customers’ feedbacks and new technologies. Using data on customers’ choices, changes in price policies and utilization of possibilities, restaurants are capable to maximize their sales and receive constant profit within fiercely competitive environment.
From details like the customer behavior theory, pricing theory, prospect theory, and lean management theory, this work has discovered that these practices improve RM in casual dining restaurant businesses. RM improves an organisation’s ability to optimise the price of its goods or services, its operational efficiency and overall levels of customer satisfaction, hence leading to increased levels of profitability. Other casual dining restaurants that have adopted these theories and implemented them in their RM strategies stand in a better place to overcome the effects of the post-Pandemic dining market environment and realize sustainable growth.
CHAPTER 5: CONCLUSION AND RECOMMENDATION
Introduction
Revenue management (RM) is the most important factor for casual dining restaurants to use the optimum rate to enhance the prices and profitability. Hence, using customer-orientated methods, RM facilitates the services or products price setting depending on the degree of demand necessary for consumers to purchase businesses’ product offerings. Since casual dining is a dynamic business segment, which depends on customer demand, further economic conditions, and competition, it is difficult to achieve RM goals. Thus, this paper examines affiliations of four significant theories, namely, customer behavior theory, pricing theory, prospect theory, and lean management theory with casual dining. They offer a great deal of information as to how restaurants may adjust their prices, work on ways to cut costs and enhance the customer experience all of which may well lead to increased profit (ARYA, and KOLAPKAR, 2024). It is crucial now more than ever for restaurants which faced significant changes in consumers’ preferences after the pandemic to rely even on RM even more than before. These theories and subsequent concepts, therefore, need to be inform the RM practices for sustainability with improved competitiveness and long-term profitability to enhance the casual dining firms.
Conclusion 1
The importance of best price level and optimum yield, customer behavior theory is a very significant theory for the management of revenue for the restaurant that offers casual dining services to the clients. Customer behavior depends on factors such as price elasticity, customer values and reference group and such issues affect the customer choice on restaurants. For instance, consumers with young families found that value and the ability to get a good deal were key decision influential attributes while young individuals may be willing to pay a premium to achieve a distinctive dining experience. Target customer preferences include but are not limited to the following list Casual dining restaurants can obtain and analyze data regarding these preferences to market specific holidays or even provide different offers, promotions or discounts for certain groups for customers (Sawert, 2020). This approach is effective in improving customers’ satisfaction while improving organizational profitability as customers continue to seek the organization’s products and services. This is due to the fact that understanding customers’ behavior and appealing to it open new ways to remain competitive in the constantly shifting market environment by changing the prices and services being offered. Therefore, knowledge of the customers assists in the achievement of long-term goals and enhances a customer’s experience in the casual dining facilities with the aim of generating higher revenues.
Conclusion 2
These concepts underline the theory of pricing as being a critical factor when formulating proper revenue management tactics in casual dining restaurants. It implies that price escalation can be realized by actuality of various factors such as elasticity of demand, other market forces and perception among customers. There is dynamic pricing which enables restaurants to adjust the prices of their commodities depending on the time of the day that people dine and increase the prices especially during the times of high traffic. Another strategic pricing with significant importance is value-based pricing, pricing determination based on the perceived worth of a product. It is possible for casual dining restaurants to charge more than fast foods for higher quality ingredients, better waiter services or new theme (González-Serrano, and Talón-Ballestero, 2022, pp-1277). This flexibility of pricing ensures that the restaurants are able to meet the market tests and the consumers expectations while at the same time being able to record profits. Here, if restaurants are in a position to analyze the demand pattern as well as competitors’ price strategy data, they can avoid high prices which consumers are not willing to pay while making optimal prices in order to generate maximum revenues in a fair manner.
Conclusion 3
The theory of prospect refers to gains and losses in consumer buying behavior where one decides between consuming food and saving money through engagement of casual dining restaurants which is very helpful in the pricing strategies. The theory also points out that people feel the pain of losses much more than the pleasure of gains of equal proportion, which implies that ‘price rises can scare customers as long as it is packaged in the right way. The implications of this understanding thus in casual dining establishments is to apply development of price and promotion themes that focus on possible gains than loss; for instance, through coupons, free membership points, lucky draw, and other bonuses or incentives (Murimi, et al. 2021, pp-5). For instance, letting a menu item as a part of a limited-time offer predisposes a customer into perceiving this item as a gain. Likewise, the loyalty programs can also be designed in the way to focus on the positive aspects to come from multiple visits like discounts or preferential specials which will also minimize the effect of loss aversion. When using prospect theory, casual dining restaurants will be able to work on how their customers perceive their dining services to increase satisfaction therefore converting these customers into repeat customers.
Conclusion 4
Lean management theory deals with efficiency and waste within the organization and its application can be deemed perfect for casual dining restaurants seeking to improve operations’ effectiveness in order to increase profits. They also assist restaurants in cutting out costs which are seen as unnecessary as they enhance the performance of various processes including inventory, food preparation as well as service delivery. Lean management expects that its processes are to be constantly improved; employees are expected to be able to detect and point out the deficiencies in the processes. For instance, an organization may adopt the just-in-time inventory system to minimize food wastage, get fresh stocks, save costs and eventually increase customer satisfaction (Meatchi, et al. 2021). Besides, lean management advocate for the reduction of Non-Value Activities and hence enables the restaurants to provide their customers with excellent services. Besides, saving such costs brings not only tangible benefits but also contributes to improving the adaptability of the restaurant to the requirements and fluctuations within consumers’ consumption and further market trends. Applying lean management techniques can help casual dining restaurants sustain its competitive advantage, increase operating margins and fulfill its customers’ expectations.
Recommendation 1
To increase the number of guests and their frequency of visits, cafes should use pricing concepts based on customer behaviour theory. Categorization of clientele is possible depending on the consumer’s characteristics such as preferences, frequency of consumption, and willingness to spend. Promotion of such models as family rates or paid junior memberships will improve customers’ satisfaction and boost revenues at the same time. For example, having non-ethnic food offer a family platter for will entice customers who are price-sensitive while exotic or patented food items at a higher price could appeal to the young and the adventurous (Koh, et al. 2020, pp- 1122). Restaurants can also employ reward programs or offer specific offers to the clients which would guarantee their repeated patronage. This data is then used to fine-tune these strategies because the last thing you want is pricing approaches that do not fit the customer taste. Finally, customer-oriented price strategy contributes to the growth of customer activity as well as stabilizes flows of customers therefore ultimately generating bigger profits with differentiation of value propositions for various buyers.
Recommendation 2
Everyday eating places should adopt dynamic pricing to help improve on the revenue generated. Kuwait has used dynamic pricing model where the prices are adjusted as per the demand known to restaurants; thus, high during certain hours and low at other times. For example, the organisation can choose to charge high rates during weekend evenings when restaurants are busty and charge low rates during afternoon when restaurants are less busy. Premium data analysis can help managers determine the maximizing of food consumption times, customers’ preferences, and the outside environment to better make pricing decisions (Sun, et al. 2022, pp-4611). Besides, restaurants can incorporate other mobile or online booking applications or web services for automatically controlling the prices with time of day based on supply and demand rates that can provide certain rewards with fewer prices as in order to attract customers during the period of low restaurants’ popularity. Not only does this approach increase revenue during periods with high customer traffic but it also ensures customer acquisition during the slow hours so that the tables turn over constantly. When well applied, dynamic pricing increases revenue and profitability and at the same time retains customer satisfaction.
Recommendation 3
When it comes to organisations such as casual dining restaurants, this paper argues that, based on prospect theory, communication of value assumption should be adopted in pricing in order to reduce the impact of loss aversion. When pricing offers are ranged from customer-siveness perspectives, for example, special discount, reward and everyone’s offer, the perceived value tends to increase. For instance, using call to action phrase like ‘buy one and get another one for free’ or using carry over discounts such as ‘second visit is free’ takes advantage of customers’ love for gains rather than losses (Lee, et al. 2020, pp-228). A loyalty program that provides its constant customers with points or discounts also increase the perceived value of products and services as well as help the business to retain customers. It is also important that restaurants should stress on the value differentiation and thus the need to charge high prices for their services. Some restaurants promote their food service promotions with little emphasis on price, yet customers are likely to make decisions based on price and savings hence; by explaining the direct benefits and savings that the promotion offers, restaurants are in a position to create increased food expenditures and higher customer satisfaction even if the price of food is increased.
Recommendation 4
They want casual dining restaurants to adopt lean management practices since adoption will enhance efficiency and decrease wastage, which has a bearing on the levels of profitability. Lean management prohibits wasteful activities and their application becomes apparent in areas like inventory, catering and delivery of meals. New inventory programs such as just in time inventory systems eliminate pre-stockpiling which means that food is not wasted, and the quality of the food that is offered is better because the ingredients are fresher and the company saves a lot of money. In the same regard, allowing the employees to notice and report inefficiencies contributes to the culture that brings change from within through staff’s contributions. Through workflow standardization on the kitchen and dining sections, service overcrowding may be eliminated as well as increase the speed of service delivery hence enhancing the quality-of-service delivery (Li, et al. 2021, pp-16). Through proper management of resources and elimination or minimization of wastage, restaurant owners can be able to minimize their expenses while delivering services with excellence. Lean management also helps restaurants align their processes to market dynamics for instance demand changes hence enabling them to generate consistent returns and customers’ satisfaction in the long run.
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