Improving Sales Strategies For Spice Sky Restaurant In London

Issues faced by Spice Sky Restaurant

Question:

Write a clearly structured, well- argued and appropriately referenced report. You are expected to deal with complex issues faced by the owner, both systematically and creatively, make sound judgements in the absence of complete data, and communicate their conclusions clearly to specialist and non-specialist audiences.

Entrepreneurship refers to the process of launching, designing and running a business, offering a huge range of products and services to the target customers. The individuals, who create a business, be it small or big, are called the entrepreneurs. The term entrepreneurship deals with the willingness and capacity of developing, organizing and managing a business for making a profit, keeping the risk factors into consideration. The risk factors typically include; lack of funds, economic crisis, market demands, and bad decisions in the business and others. In simpler words, an entrepreneur can be defined as the individual who starts a business, organizes it and manages the enterprise (Hall et al. 2012).

The report throws light on the problems and issues faced by London’s Spice Sky restaurant. Spice Sky restaurant provides its consumers with high-quality Indian food since the year 1988. It has been able to win the hearts of many consumers and mass appreciation. The restaurant recorded an increase in the sales since its opening. However, the company is facing a decline in the sales for the last two months, due to some issues. To start with, the company needs to be more effective in the identification of the strategies, so that it can get effective results in the long run. Furthermore, it needs to identify the demands and desires of its target consumers.

The report highlights the issues of the company and the theories to be incorporated, for the betterment of the organisation. The company needs to deal with the consumers more systematically as well as creatively. Customers love surprises; therefore, it needs to introduce a new range of food in their menu. The report discusses the theories and application of new ideas as well as identifying the specialist and non-specialist audiences. In addition to this, it consists of some recommendations for dealing with the issues more effectively and efficiently.

The Spice Sky restaurant is a popular Indian restaurant located in the heart of London. It has gained immense popularity for its high-quality services and a huge range of products. It has recorded an increase in the sales since its opening. However, the sales dropped since the last twelve months due to some issues. On identifying the problems, it was found that the company had changed their menu a little, which might be a major drawback. In order to reduce their costs’ structure, they removed some items as well as beverages from their menu. Moreover, their promotional activities are also less as compared to their competitors. The company used the same advertisement strategy for many years. Their advertised their company on the local radio and some other media, which is clearly not adequate.

Recommendations for Improving Sales Strategies

Bringing a change on to this, the company can adopt different strategies in their advertisement procedure. Firstly, the company needs to set up a clear budget for their promotions. They can consult a professional marketing manager for this. Instead of giving advertisements to the local radio, they can advertise their restaurants on television, with a creative touch and catchy tune. This will be more impactful and help in grabbing more attention of the consumers (Nambisan and Baron 2013). Secondly, it was found that the company has only one billboard advertisement and that too on the main highway. This needs to be changed immediately. The company needs to set up more billboard advertisements in the city itself. Not only Indians, it will help grab the attention of others too.

Thirdly, the company needs to be digitally active. Creating a page on the social networking sites will be impactful and cost-effective as well. However, the company needs to hire a person for managing the websites and pages, which needs to be updated regularly. Promotional activities, the introduction of discounts and offers must be regulated on all the advertising forums. Social media sites will also help the company gain feedbacks from the consumers. It will further help the company gain an understanding of the consumers’ behavior and expectations from them (De Mooij 2013). Moreover, the company has removed some items from their menu, for reducing the production costs. In that case, the restaurant can introduce a new range of food items and beverages for catering to their target customers. It must be done in an effective manner. The new range of items must compliment the previous ones.

Hiring new professionals may help in such situations. They must be trained on a daily basis, in order to provide their best of services to the customers. In addition to this, the company should keep a track of their competitors, in order to check their marketing strategies. It is found that Spice Sky is lacking behind in this. In one hand the company needs to focus on their marketing strategies and on the other, they need to keep an eye on what their competitors are doing. Furthermore, the company should start hiring some professionals in order to deal with these issues. The employees must be trained on a regular basis, for providing the best of services.

Apart from all these, Spice Sky must know how to handle the competitive environment. Customers love new things; therefore, the company needs to keep a track of their behaviours and changing demands. It can be done by installing feedback machines or tabs in the restaurant itself. The customers can give their feedback as well as recommendations if any. This will help the owner in gaining an understanding of what the consumers actually want and why the sales are declining. If the customers are facing any issues regarding the restaurant’s services, they must be encouraged to report it to the management team. The management team must handle the issues with utmost sincerity and ensure that such a situation does not happen in future. Moreover, it was found that the company does not have any clear vision, which needs to be rectified as soon as possible. In order to gain mass appreciation, the company needs to set up a vision and mission, which will help in achieving its goals.

PESTLE Analysis of Spice Sky Restaurant

In the present scenario, it can surely be said that the owner of the restaurant is dealing with various issues in his organisation and in most cases those issues are advertisement related and the management related issues. It is seen that being one of the most reputed restaurant in the city centre of London, SpiceSky is losing business day by day. There has been a gradual decline in the sales for last 12 months and the owner of the organisation initially thought that the problem is in the strategy of advertising (Domenech, Rizov and Vecchi 2015). Later Ali, the owner of the organisation realized that the problem is in the external operating environment and that is blocking the growth opportunities of the organisation. Thus it can be said that a thorough external market analysis must be done to locate the problems behind the decline in the profitability of the organisation. Thus a PESTLE analysis, analysis of Porter’s five forces and a thorough competitive analysis is done.

In this section to identify the basic external influences a PESTLE analysis is done.

Political:

As the restaurant owner was running the business in the heart of London for quite a long time and delivers excellent quality Indian food, it contributes a lot to the tourism of London, thus politically the organisation is in a quite favorable position. The owner Ali does not have to face any types of political issues and it can be said that no threat can be seen politically for the organisation (Martínez and del Bosque 2013).

Environmental:

As a responsible citizen Ali makes sure that all the waste product of his restaurant should be kept a side and would be dumped in a safe place to ensure that the environment does not get affected due to his business operations. Apart from that, the organisation does get engaged in various sorts of CSR activities and that is why the organisation has earned a reputation in today’s market (Martínez and del Bosque 2013).

Social:

The management of the restaurant gets engaged in various sorts of social activities every weekend they feed homeless people and they actively participate in various social activities like food festivals for the unprivileged people of the society, distributing food to the homeless people in numerous occasion and many more (Chen and Lin 2015). The management of SpiceSky also started providing a discount to the aged people and for these activities the organisation gained quite good reputation in the market of London.

Competitive Factors

Technological:

The restaurant SpiceSky did not generate the desired revenue for the last twelve months and that is mostly due to the management’s inability to adapt to the market changes. The organisation did not invest much in digital promotion and social media campaign so that the young generation could find them (Domenech, Rizov and Vecchi 2015). They only have a set customer base and other than them they are failing to expand the customer base only due to lack of technological adaptation in their business operation.  

Legal:

The management of restaurant SpiceSky did not ever violate any of the trading standards set by the government of United Kingdom and thus they do not have any threat from the legal aspects.

Economical:

The organisation has a good reputation in the market of London, but it is a matter of fact that for quite a few months the restaurant is failing to generate profit and that is a huge matter of concern. The astonishing part is that the restaurant has a glorious past record of generating huge revenue each financial year (Martínez and del Bosque 2013). The mist astonishing part is that the decline in profitability was gradual and not at all sudden. In the market of UK where most of the citizens are well off and they can eat out in a posh restaurant like SpiceSky, the restaurant had initially faced no issues or problems, but just as they started to get lagged behind technologically the profitability got lower day by day.

Competitive factors	SpiceSky	Aquavit	Rowley’s Restaurant
Products and service	Good quality Indian food, Fine dining	Multi-cuisine themed restaurant	Finger food, Pub
Market share	18%	27%	19%
Basis of competition	·         Good quality food ·         Fine dining ·         Great ambience ·         Location	·         Good quality food ·         Beautiful ambience ·         Competent management	·         Pricing ·         Favourite place for the college goers and young adults
Pricing	High to moderate	Moderate	Low
Strength	·         Quality food ·         Ambience ·         Reputation	·         Quality food ·         Ambience ·         Competent management ·         Crowd of young adults due to extensive social media campaigning	·         Pricing ·         Crowd of young adults due to extensive social media campaigning
Weaknesses	·         Lack of digital marketing ·         Lack of innovative approach ·         High pricing	·         High pricing	·         Quality of food ·         Management could be better

Table: Competitive analysis

(Martínez and del Bosque 2013)

Conclusion of Competitive analysis

From the table provided above, it can surely be said that there are some competitive advantages of SpiceSky and some major weaknesses of the restaurant (Chen and Lin 2015). The owner of the restaurant needs to understand one fact that they need to adapt to the market changes or they will get replaced by the rival organisations in a market that is full of competition. The owner Ali has not invested much time in digital marketing and social media campaigning (Wade, Holmes and Gibbs 2017).

Thus the restaurant is failing to attract the young generation and the inability to expand the customer base is becoming concerning. The organisation has set high pricing as they are trying to provide the best quality foo to their customers and to maintain cost they are stopping to prepare those delicacies. This is something that is not at all a[appropriate in this market and by this the organisation is losing its uniqueness, as those dishes were the signature dishes of the restaurant that have been attracting a huge crowd.  On the other hand the restaurant Aquavit has excelled in every aspects of the competitive analysis framework and they only need to work on their pricing structure. Rowley’s restaurant’s target customers are college goers and young adults only and thus they have set their pricing very low and stressed on ther digital promotion of their restaurant, but they need to work on their quality and the structure of management (Chen and Lin 2015). Thus, in short it can be said that there is a huge potential in SpiceSky to again taste the height of success only if they are able to work on a few aspects.

Figure: Porter’s five forces framework

(Wade, Holmes and Gibbs 2017)

Porter’s five forces is a framework that is used in this section of this report to analyse the competition of the business of SpiceSky in the market of London. In this section a detailed analysis regarding operating the business in a competitive market is provided.

In the present scenario the restaurant is somewhat got replaced by Aquavit as the management of that restaurant successfully eradicated most of their weaknesses and their ability to adapt to the changes of market has led them to take over the leading position from SpiceSky (Saeidi et al. 2015). Thus, the management of SpiceSky will have to vigorously work on their weaknesses and use their strengths to reduce the threats of the competitive market immediately in order to regain the past status.

A restaurant business is immensely dependent on the supply chain and the management of the restaurant must make it sure that there is no gap in the supply chain, else the organisation would have to suffer badly. Especially in today’s market the competition is fierce and thus the management of the restaurant will have to ensure that the organisational supply chain is continuous (Wood and McCarthy 2014).

For a restaurant to run successfully attracting more customers is the key. Nowadays a the market competition is getting more steep day by day, the organisation SpiceSky will have to ensure that their customers are satisfied with their food and the ambience provided by them. If the organisation starts losing the customer base, they would not ever be able to regain their past profitability and if the customers show discontent with their experience, the organisation would surely lose their hard earned reputation. Thus the owner of SpiceSky will have to monitor these aspects very carefully (Wade, Holmes and Gibbs 2017).

Nowadays in the market of London, there is a steep competition and many people are joining the business seeing the prospects of this business. In the food business the profit percentage are a bit higher and that is attracting many individuals to invest in such a business. Thus the threat of new entrants will always be on the higher side. Nowadays as the restaurant SpiceSky is lagging behind a bit in a few aspects, they will have to focus on the fact that no new organisations can substitute them. The management of SpiceSky would have to understand the fact that to sustain in this competitive market they will have to work on these factors (Wade, Holmes and Gibbs 2017).

Thus to conclude, it can be said that though currently the position of SpiceSky has become a bit lower than their main rival organisation Aquavit, but being one of the oldest restaurants in town with a huge reputation, the restaurant SpiceSky has the potential to regain its past stature and if the management religiously work on their shortcomings they will surely be able to regain the throne of one of the best restaurants of London.

In order to maintain proper communication with the customers, an organisation needs to understand the needs and demands of the customers. Most organisations are of the opinion that customer satisfaction is important for maintaining profit and increasing the reputation of the company (Aijing, Terui and Kannan2016). Hence, organisations need to understand the types of customers or audiences that are most likely to respond to the products and services. In this regard, it is important for the organisations to ensure that customer satisfaction is maintained and that customers are treated with utmost importance. However, before communicating with the customers, it is necessary for organisations to maintain target customers. This can help them to understand the type of people that exist in the society and the manner in which they can communicate with them. The identification of specialist as well as non-specialist audiences is required in order to reach the customers.

According to Angus et al. (2016), specialist and non-specialist audiences consist of people that have different knowledge about a particular company and its products. Specialist audiences are those that have a significant knowledge about the type of company and the products that they manufacture. These audiences are usually loyal to the companies and any glitch in the services can affect the perception of the people. Hence, reaching out to these people can be easy as an organisation can maintain regular contact with these people via phone or social media. As stated by Saeidiet al. (2105) organisations need to publish articles that define the purpose, products and the types of services they perform. This information needs to be vivid so that customers can get a clear idea about the company. Hence, in this regard, it can be said that writing an article based on the company is depended upon the type of customers that are dealt with.

For example, the non-specialist audiences consist of the type of people that are not aware of the company or the products that are sold by them. Hence, these people require extensive knowledge about the company. Jahanshani et al. (2014) stated that in order to understand the target market it is important that the organisations sort out the specialist from the non-specialist audiences. It can be considered as a competitive advantage if a company can focus on the communication with the non-specialist audience. This can help in improving the reputation of the company. Hence, articles published for addressing the non-specialist audiences need to be precise about the type of services that are provided with an organisation. Based on the analysis of the case study relating to Spice Sky, it can be said that the restaurant needs to maintain proper communication with both types of audience. This needs to be keeping in mind the recent changes that have been to the restaurant.

From the case study, it is seen that Spice Sky is one of the most popular restaurants in London. However, with the change in menu and the monotonous use of advertisements the company had a decline in sales in the past year. In order to remain competitive in the market, Spice Sky needs to analyze the market for competitors that serve similar type of cuisines. In doing so, the restaurant can get a proper understanding of the market and the type of message that needs to be communicated to the audiences. In this case, both the specialists and the non-specialist audiences need to know the reason behind the change in menu. This is because the restaurant was famous for serving Indian food, which was frequented by customers from all origins. The article also can be a mode of change in the advertisement method of the restaurant. Martínez and del Bosque (2013) observed that publishing an article providing details about the reasons behind the change in a menu can be of immense importance for the company. This can provide a competitive advantage, as most people would understand the different approach taken by Spice Sky.

Hence, it can be said that communication about the problems and change in the organisational system can help an organisation to be strategically ahead of the competitors. This is because customers may pose feedbacks that can be of importance for the company. Applying these solutions can be a huge advantage for an organisation as it can help in bringing organisational change and improve the quality of the products. Based on this and the analysis of the external factors certain recommendations can be proposed to Spice Sky in order to help the restaurant to gain back its reputation. 

The most important recommendation needs to be the improvement of advertising. It has been seen that since its inception, Spice Sky have been using the same mode for the advertisement of products. This is one of the reasons for the falling standards of the company in terms of reputation. The advertisement used by the company need to be based on the use of banner and billboards that are considered to be more advanced in the modern world. The best method of promoting can be the use of moving billboards that can attract the audience. However, budgetary expenses need to be kept in mind that can be done by the application of a proper marketing analysis about the appropriate placement of the banners and billboards. This can help in grabbing the attention of the audience and ensure that the promotion of the company is done in an effective manner. Apart from this, the restaurant also needs to be more flexible in terms of putting a price on the products. From the case analysis, it is seen that the restaurant focuses on the price rather than the quality and quantity of the products.

Such a strategy results in a huge loss for the restaurant. This is because a change in the menu along with competition in the market may force customers to choose from the different restaurant. Hence, profitability can decrease that may hamper the marketing management of the restaurant. Spice Sky needs to be flexible depending upon the demand in the market. The financial stability in the economy may fall due to various external reasons such as the boom in the economy or recession. Hence, Spice Sky needs to adjust its price and ensure that the quality remains moderate so the people can afford to visit the restaurant. In order to gain profit from such situations, the restaurant can provide discounts on meals in order to attract more customers. Another recommendation that can be suggested is the change in a target market. Spice Sky targets Indian people as the restaurant deals with the services of Indian food. However, this needs to change, as the local residents of UK also need to understand the food that is served in the restaurant.

Despite being famous in the place of business, Spice Sky lacks the ability to attract customers of non-Indian origin. This may be due to the non-flexibility of the menu that attracts the Indian audience more. This needs to change by hiring chefs that are capable enough to prepare food for the non-Indian people. Targeting these people can help in gaining the competitive edge over the rivals. The restaurant can also focus on creating organic food that is suitable for any type of people. This includes people with specific diseases that remain timid in the consumption of various foods. Another recommendation tactics that can be applied is the use of social media. This can be another promotional strategy in order to attract the audiences. The use of social media is one of the most trends among people in the modern world. Creating a page on Facebook does not cost as much as setting up digital advertisement. Hence, for a cost-effective purpose, the use of social media is an important aspect of Spice Sky. It can help in reaching customers particularly the younger generation in an effective and easy manner. This strategy can also help in the promotion of the restaurant using word of mouth promotional strategy. The recommendations suggested can be useful for Spice Sky to regain the lost reputation and attract more audience by increasing its financial stability.

Conclusion

Hence, it can be concluded that in order to survive in the business market, Spice Sky need to remain updated about the services that are being used for promotion. Keeping the budget in mind, the restaurant needs to select the best promotional practice that can help in addressing the people of the country and gain back the reputation. The use of article writing in order to identify specialist audience from the non-specialist ones can act as a huge advantage for the restaurant. The analysis of the external environment suggests major flaws in the restaurant that can be mitigated using good strategic and marketing management. Maintaining the price and quantity of the food is a major requirement for any restaurant. Hence, Spice Sky needs to maintain this feature in order to remain competitive in the hospitality industry of UK. Social media can help the restaurant to remain famous in the market.

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