1.0 Introduction and problem Statement
Customer satisfaction has been identified as a measurement of customers’ attitudes with respects to products, offered services and the brands’ performances. In the context of the similar statements Brewer et al. (2017) asserted that the brands operating in the Australian restaurant industry are emphasising more on customers’ preferential food items. With respect to the previous context, Deborah et al. (2016) asserted that customers are no more influenced by the loyalty cards and gift vouchers. It has been identified that the today’s customers’ primary focus is on food and service qualities, based on which the satisfaction index is decided. The present study attempts to explore the relationship between customer satisfaction and customer loyalty, with respect to Manjit’[email protected], Australia.
Information gathered from the corporate website reflects that Manjit’[email protected] had been an Indian restaurant, which had been pioneered in Sydney for catering, events and cuisine purposes 30 years back. The founder of the enterprise is Manjit Gujral. The brand offers various catering services like, Bollywood theme nights, house parties and food deliveries. It is also engaged in the occasions like wedding, corporate and community event catering and hosting.
Manjit’[email protected] is a well-established Indian restaurant in Sydney. The business has started promoting its business on social media sites like Facebook. Additionally, the restaurant has promoted itself on TripAdvisor and Zomato as well. However, the ratings of the consumers are not the same in all the websites or on Facebook. Therefore, such different ratings and reviews of the consumers have become a problem for the business to target satisfied customers for sustainability of the business. The purpose of the project is to evaluate the current promotion policy of the restaurant as well as measure the effect on customer loyalty. The focus matter of this paper is contemporary as many small businesses are engaged in promoting their business through social media. However, different medias are providing different ratings for the same business, which has raised the question on customer satisfaction and success of sales promotion by social media. Additionally, the issue can be resolved by checking the statements of the consumers regarding their feedback on the business.
The aim of this study is to evaluate the effect of sales promotion over the customer loyalty for Manjit’[email protected] The objectives of this study are as follows:
2.1 Customer loyalty and its benefits
According to Abraham and Babu (2017), customer loyalty is defined as an expression of both attitudinal and behavioural tenacity of the customers by favouring one brand or a product over others. Enhancing customer loyalty is tactics for the business for encouraging the customers to become a consistent buyer from a company. There are several factors influencing customer loyalty on individual level – satisfaction of shopping, satisfaction due to service, satisfaction due to product quality and some other satisfaction of the individual customers. As Batra and Keller (2016) have argued, the ultimate reward of customer loyalty is obtained when the suppliers meet the needs of the consumers. The author has stated that branding and acceptance of a brand enhance the customer loyalty for a certain range of products. The brand loyalty also increases the revenue of other products of a supplier due to the belief of the consumers. The direct selling of a product enhances the direct relationship with the customers whereas the companies have to focus on the intermediaries like distributors for creating a brand loyalty to them. In this context, Boschetti et al. (2017) has stated that customer loyalty can be observed of having a direct impact on the financial result of the business. The supplying companies must have a clear target of economic benefit for gaining momentum in customer loyalty. There are several types of customer loyalty present due to different degrees and directions. Cha et al. (2016) has observed that polygamous loyalty is normal among the consumers these days due to the presence of several brands and companies in a similar type of products. According to the author, a customer can buy products from two or three shops, which makes that person loyal to these two or three shops mainly. This customer is not 100% loyal to any shop but the person believes into those selective places for buying household products. However, the author has concluded that this customer is not loyal to other shopkeepers. Others researchers have found that making a customer 100% loyal to any brand is unrealistic instead of as loyal as possible (Chong et al. 2016). Thereby, managements of the brands try to explain the lower sales by shifting of brand taste or the customer behaviour. However, the explanation of switching brand and customer behaviour are exaggerated better by using polygamous loyalty of the customers than that of shifting of brand taste.
The past articles have expressed customer loyalty as a behavioural expression of the consumers (Cui et al. 2016). In this context, the researchers used to state loyalty as repeat purchasing of the products as well as a post-purchasing query regarding other products. The loyalty program of the retail companies is based on this theory where more spending on any product would enhance the loyalty program of the consumers. However, this behavioural loyalty cannot explain the second element of the loyalty – attitudinal loyalty. The second element of the loyalty measures the strong psychological commitment or attachment to the customers with the brand (Di Benedetto and Kim, 2016). In this context, the author has stated that attitudinal loyalty of the customers reduces the cost of promotion of a product. The management uses this loyalty as a tool to reduce the cost of advertisement and brand awareness (Chong et al. 2016). Customer loyalty can have multiple benefits for the companies as such benefits come across the business for several times. The main benefit of loyalty is to introduce new products as well as penetrating new markets. The brand loyalty of the existing customers put the confidence among the management for developing new products with a lower level of expenses of the company. Thus, the loyalty of the customers reduces the cost of promotion as well as enhances the profitability of the new products under the same umbrella. In addition to this, the behavioural loyalty helps to retain the market share as well as sustain the business during any recession (Fuller, 2016). Moreover, the consumers often are willing to pay more for this kind of attitudinal loyalty where the brand has created a sustainable relationship with the existing customers. Such brand loyalty helps the management to conduct a high level of research with the new products as a failure of one product does not scare the management of losing the existing customers (Giskes, 2016).
Sales promotion is a tool that is used by the management of a company to enhance the revenue of the firm by increasing the market share or the number of customers. According to Glanz et al. (2016), sales promotion is a metrics of marketing for to aware regarding new offers as well as products by the company. The author has also described sales promotion as a means of creating repeat purchase intentions among the existing consumers. However, the practice of sales promotion has generated the repeat purchase as well as motivating the existing customers for buying the same products repeatedly (Hiselius and Svensson, 2017). With this viewpoint, the promotion is executed at two different levels – trade and consumer promotion. The direction of consumer promotion targets to induce the customers for purchasing the products whereas trade promotion normally motivates the customers. Johnston and Marshall (2016) has argued that trade promotion is a part of pushing the customers towards the new products whereas consumer promotion is a type of pulling the customers for the repeat purchasing. However, the author has expressed his concern over these two different types of promotions as both of these are present in all types of marketing approach of the companies. The difference is the target customers who are targeted by the company in practice. The consumer promotion might not be a monetary promotion as there are several ways to promote the products without monetary incentives to the consumers. The non-monetary promotions are displays, sweepstakes, premiums and contests whereas monetary promotions are discounts, rebates and coupons (Kumar et al. 2016). The author has also observed that consumers respond to the sales promotion due to gaining the positive benefits.
The sales promotion has a positive influence on the customer loyalty as the loyalty program to regular customers encourage these people to shop more from the same brands (Leone et al. 2016). Further, people can also buy the brand repetitively due to the economic benefit provided as a promotional offer of the companies. However, the sales promotion for the consumer is more effective for enhancing customers’ loyalty than that of trade promotion (Liu et al. 2016). The authors have stated that sales promotion has induced the loyalty program not only for the existing customers but also it has pushed the new customers for becoming loyal to the brands. In this context, the companies have incorporated to provide a special discount to the high-valued customers for making them loyal from initial period.
As opined by Mahawrah et al. (2016), social media has become an important aspect and tool for promoting small businesses to reach many customers at a time. The author has observed that social media can reach many numbers of consumers within a minute despite the barriers of country or border of the continent and also it creates the brand awareness of small businesses. However, there are several social media marketing options present which has different ways to control the operation of sales promotion as well. Mathe-Soulek et al. (2016) have argued that social media marketing has some selective advantages over the traditional media for reaching the consumers. In this argument, the author has stated that interaction with the target market is one of the most important features for social media. Social media can identify and reach the target market for a business easily by finding the target customers over a pool of database. The database regarding personal information of the customers provides the opportunity to the social media to segregate the users as a type of customers in online media service and the promotion reaches to the exact target (Palisidis et al. 2016). Moreover, Smedescu et al. (2016) have observed that social media improve the responsiveness of the customers, which can measure the customer loyalty in practice. The author has also observed that feedback of the customers create the ratings of the brands as well as provide important insights regarding the performance of the companies. The small business units can obtain important feedbacks of the customers through social media discussion of the consumers for improving the service quality. However, social media provides an edge for competing with the peers due to the presence in digital marketing. According to Srivastava (2017), digital marketing has the penetrating power of reaching new customers for a wide range of area. Further, such activities also can boost the revenue of the firm due to the spread of news to many people.
The social media application is important as it can reach new customers. Thereby, Ukaj (2016) has observed that social media application helps the businesses to find new customers for expanding the market share. Further, social networking sites interact with the users in a social manner where the informal channel of sales is observed due to the positive feedback from the customers. According to Glanz et al. (2016), social media advertisement is one of the cheapest options to advertise the business for the small companies to reach as much as consumers. The author has found that there is no cost of maintaining the database or create a different online database management system. The small firms can rely on the online social networking systems for maintaining and securing their web pages for continuous interaction with the consumers. The channel of promotion through social media provides the opportunity for social communication (an informal channel for formal communication), which is the basis of building a brand. Boschetti et al. (2017) have argued that several small businesses have witnessed to gain momentum in revenue and have attained sustainable growth by applying the social media promotion strategy.
Customer retention is a strategic part of the operation for the service industry as the companies have to create a clear working mission for retaining the loyal customers for long-term (Fuller, 2016). The author has also stated that there are several strategies can be taken to retain the existing customers in the business end. Such strategies must watch the objectives of the company for sustaining the brand image of the service. As opined by Glanz et al. (2016), customer loyalty of the company or brand can become an important aspect of retaining the existing customers. The viewpoint has expressed that customer loyalty is a merit of order to retain the loyal customers. In order to retain these loyal customers, the hotel industry has adopted several strategies such as providing loyalty points to a member of a loyalty program, special discounts to existing customers, providing special discounts to the corporate members, referral bonus for the existing loyal customers and others. The following section has discussed the types of tactics for retaining the loyalty of the customers. The loyalty cards are issued to the customers so that the customers repeat purchasing can be tracked by the management. Further, the repeat purchasing of the customers must be rewarded with a proper value such as offering free foods of new items. Moreover, the loyalty cards have integrated the point of sales of a company with the integrated ERP system (Fuller, 2016). The customers can be provided with loyalty point in their cards so that these people can receive special discounts according to the points. Boschetti et al. (2017) have argued that loyalty points are measured by considering the frequency of visiting the stores, buying propensity, marginal value spent in buying commodities, returns, discounts and other activities. The strategy of providing special rewards to some of first few customers like a top ten or twenty customers is also tactics to retain the loyalty of the existing customers (Giskes, 2016). The author has observed this strategy as tactics of creating marketing buzz among the new customers as well as the existing customers to exercise the loyalty benefit of business. Gift card system for the existing customers is a popular method to retain the loyal customers in the business. Additionally, simple point system also motivates the customers to buy a product from a store repetitively (Fuller, 2016). However, the researcher has observed that fun games have become one of the most popular loyalty retention programs for the hotel industry. Glanz et al. (2016) has witnessed that such fun games have increased the frequency of visit of the customers in the hotels and restaurants. However, several researchers have terminated such loyalty programs as effective for the hotel business to retain the loyalty (Giskes, 2016). These studies have argued for customisation and personalization in service for satisfying the customers mainly for impressing these people with personalised service. Moreover, this studies have found that providing restaurant attached with a hotel has the privilege of retaining the loyalty of the customers. The reason of this privilege comes through the satisfaction of the customers for having delicate cuisine in the restaurants.
The research method provides the brief information on the steps applied to conduct the study as well as the studying method applied by the researcher. The definition of research method is necessary to be discussed before carrying out the study so that a researcher can define the justification of applied method. According to Sekaran and Bougie (2013), research method is important for every study as a researcher has to justify the reason for selecting such methods and instruments at the first stage. The author has also stated that unjustified research method cannot yield the desired outcome of the project. Further, an unjustified methods of the project cannot validate the result as a success of obtaining the objectives of a research. Therefore, a researcher has to justify the research method with utmost importance so that validation of the outcome can be observed throughout the study (Grbich, 2012).
The research method is encompassed with defining the research philosophy for the paper as it indicates the type of guidance has been followed by the researcher for carrying out the work (Fallman, 2008). In this context, the researcher has considered the positivist way to carry out the project work where the existing theories are considered as the truth for the customer loyalty. Further, this study has selected to conduct the study applying the deductive approach for deducing the theoretical constructs for finding the research gaps (Shannon-Baker, 2015). In this case, the researcher has investigated the gap in the effect of sales promotion on customer loyalty by testing the several previous studies. The hypothesis of this study is as follows:
Further, the study is designed to describe the fact as well as exploring the facts on influencing factors of customer loyalty in hotel business. Therefore, the design has applied two methods descriptive and exploratory designing method where the researcher can explore new ideas for testing the hypothesis as well as descriptive allows the study to describe the practicing methods (Wheeldon, 2010). The research strategy is another part to segregate a study such as survey, case study, grounded theory, ethnography and action research. The strategy helps the researcher to select the appropriate type of data for conducting the analysis (Fallman, 2008). In this context, the researcher has selected to conduct the study by case study method where secondary information is used to analyse the customer loyalty due to sales promotion of Manjit’[email protected]
Data collection method is one of the most important steps in a research to validate the justification of attaining the purpose of the study (Fallman, 2008). The author has argued that every study must define and rationalize the data collection method for validating the studied outcome. In data collection process, the researchers have several options to carry out the purpose. However, the collection method of information is based on the type of data required for the study. In this context, the researcher requires secondary data as the strategy is case study method. Thereby, this study has selected the to collect data from various secondary sources such as social media account of Manjit’[email protected] and news articles on the restaurant business in Sydney. The data collection method has shown that sources of secondary information are primarily based on the social media account of the restaurant for evaluating the process of sales promotion. Further, this study has selected several contemporary news article dedicated to the restaurant business in Sydney. The method of data collection process indicates that the researcher has tendency to collect information from reliable open source database for conducting this study. Thereby, this study does not need any validation test of gathered information separately as the study is based on the authentic database (Bowman, 2014).
The variables must be defined for any study as these variables have to define the relationship with the objectives of the research (Brians et al. 2010). The author has also found that the variables are deduced from the discussion in literature review for justification of application of these variables in this study. Additionally, the study has to relate those variables with the main purpose of the study, according to Sekaran and Bougie (2013), a researcher has to consider some of the proxy variables for carrying out the study. Thereby, the researcher ha to relate these proxy variables with the research objectives so that proxy variables can attain these objectives finally. In this context, the studying objectives are stated in the chapter one. The first objective has the target to evaluate the relationship between sales promotion with customer loyalty. The second objective is to evaluate the application of social media in sales promotion of Manjit’[email protected] Thereby, the proxy variables of this paper are social media review rating, reviews of the restaurant in the social media about the customer satisfaction due to many factors and communication channel of marketing of the restaurant. The measurement of these variables are possible in qualitative manner as these variables are not in quantitative form. Thereby, these variables are not measured in this paper by using quantitative instruments. These proxy variables are analysed by using the selected themes for this study.
Sampling strategy is crucial as the sample provides the glimpse of a population in short form. According to Sekaran and Bougie (2013), sample size can represent a large population to a researcher for conducting the statistical study. Further, the sample size is applicable in a study for reducing the time of the researcher. Thereby, a researcher has to investigate the entire study by defining a justified sampling strategy where the sample size and the frame can explain the reliability of the outcome. In this context, the researcher has selected to conduct the study by using three different themes as sampling frame. The first theme is sales promotion as a part of communication mix of a restaurant (Manjit’[email protected]) whereas the second theme of the study is sales promotion as a tool to retain the existing customers loyalty. The last theme of this paper is to evaluate the sales promotion through social media. However, the sampling strategy of this paper has targeted to apply all the reviews available on the social media websites.
Th e qualitative analysis is conducted for the variables, which cannot generate any quantitative information for the study (Fallman, 2008). The variables of the study must be in order to cope with the qualitative environment of analysis. Therefore, a qualitative analysis is suitable where the researchers used to obtain information in quality or attribute format instead of quantitative format. According to Sekaran and Bougie (2013), attributable information cannot be quantified by the researchers as this information is present in other forms such as keywords, expression of the customers, reviews, quality rating and interviews. However, the qualitative research can use the quantitative data such as rating provided by social media analytics, visiting of the customers, numbers of registered members and followers of a restaurant on its social media page. Further, traffic of the web page is also a good proxy for measuring the popularity of the restaurant to its existing customers. However, Fallman (2008) has argued that such proxies cannot express the customer loyalty in exact form. Thereby, a researcher must apply qualitative study for obtaining the exact information regarding customer loyalty as well as reviews of the service on its social media page. In this context, the researcher has evaluated the social media page of Manjit’[email protected] in different websites such as Facebook, Tripadvisor and in others. This study has assessed the ratings of the different social media regarding the satisfaction of the customers on qualitative basis for evaluating the chance of creating the loyal customers. further, this research has conducted this study along with the reviews of some of the individual customers in the social media for investigating the specific parameters liked by the customers for Manjit’[email protected]
Every study has to maintain the ethical consideration for conducting the research. According to Fallman (2008), an academic research must comply with the ethical issues for gathering the information. Moreover, a researcher must carefully consider the process of sourcing data as there are several sources unavailable publicly. In addition to this, the researcher must consider to maintain data integrity of the study so that the outcome of this study can be used in future by other academicians. In this context, the researcher has considered to source all data regarding sales promotion of Manjit’[email protected] from publicly available database. Additionally, this study has maintained the data integrity of the paper by sourcing and using all the authenticate information regarding the restaurant.
The limitation of a study must be assigned along with the analysis as a researcher must acknowledge the limitation to the readers. Such practice is also considered as conscious behavior of the researcher by knowing the practical applications of the study (Brians et al. 2010). In this context, the researcher has used the secondary information for conducting this project. Therefore, the study has evaluated the past performance of Manjit’[email protected] instead of current customer loyalty as well as sales promotion of the restaurant. Additionally, this study has accomplished to investigate on the customer loyalty due to service of Manjit’[email protected], which does not reveal any strategic improvement of the business in future. Thereby, the main limitation of this study is related to type of data applied in this paper. Further, this study has the limitation of fake reviews regarding Manjit’[email protected] as anyone can write review regarding their experience in the restaurant.
Sales Promotion as a Part of Marketing Communication Mix
Sales promotion is a part of marketing communication in marketing mix as the business can construct a constant communication channel with the existing customers. Brewer et al. (2017) have argued that sales promotion of a restaurant business must consider creating a standard communication path with the existing customers so that brand awareness of the restaurant can be maintained from time to time. In addition to this, the author has stated that a management must foray all types of updates in this communication channel so that customers can obtain all types of changes from time to time. The current practice of sales promotion of Manjit”[email protected] has shown its dedication towards communicating with its customers through three different channels – social media, direct and telephonic and e-media. the company has the option to send the newsletters via e-mail to its subscribed guests. in such way, the restaurant communicates all types of updates regarding menu, prices and special discounts to the subscribers. such practices help the business to acquire a new customer as well as to retain existing customers. Further, the management of restaurant has provided online and telephonic booking service to its customers where a customer can reserve a table before the rush hour (Manjits.com.au. 2017). Further, the business has established its communication with the customers through its social media page on Facebook. the restaurant has contained all the reviews of the customers regarding the service as well as food quality on its Facebook page. such communication channel helps the new customers to make a decision about visiting the restaurant in future. further, the management has updated its post on the Facebook page from time to time on a special occasion such as ‘Mother’s Day, valentine’s day’ and others. The management has provided the posts for new menus and discounts for the customers in this feed too.
Sales Promotion Tools In customer retention
The restaurant business has used three sales promotion tools mainly – social media feed (posts), reviews of the existing customers and traditional newsletters to the subscribed members of the restaurants. Further, sales promotion tools of this restaurant have been used to retain the existing customers by promoting the changes in menus and offers during several times of the year. The traditional newsletters provide the change in menus at Manjit’[email protected] as well as the notifications related to special occasions in the restaurants. Further, the similar information is provided on the Facebook page of the restaurant by the management for creating awareness of the changes to the followers. The management has considered answering the poor reviews of the customers through the social feed of Facebook so that the management can apologise about any unprecedented incident in the restaurants. In this way, the restaurant business can retain the existing customers in future.
The Facebook profile of Manjit’[email protected] shows that the company has maintained the social media page updated always. the page is being visited by 4824 Facebook members among which 3199 people have liked the page or the posts of the restaurants. the page has 4.6 ratings from total 210 reviews regarding the quality of food and services rendered by the restaurant. However, it is observed that majority of the visitors of the restaurants have liked the food mainly in Manjit’[email protected] instead of service quality. The significance of the review is that several non-Indian people have liked the cuisines of the restaurants. Such reviews indicate that Manjit’[email protected] has strongly placed its business for the loyalty of non-Indian customers in Sydney.
Trip Advisor has provided 140 reviews in English for Manjit’[email protected] in its website. The website does not provide any analytical conclusion on reviews of the restaurant. However, the researcher has gone through some of the reviews, which have indicated that majority of the visitors have liked the ambience of Manjit’[email protected] Moreover, the majority of the Indian people have rated the non-vegetable food as underperforming for Manjit’[email protected] whereas the Australian people have rated the food five star.
In this website, the Manjit’[email protected] has received 41 reviews from the existing customers or frequent visitors. Among these reviews, there are four blog writings where the average rating can be observed as 4.25 since last February to July 2016. However, it is significant that the review rating in the blog of Manjit’[email protected] has improved since February of last year. Further, the personal feed in this website has shown some terrible experiences of the customers due to dining in Manjit’[email protected] Further, the average rating of this restaurant in 3.7 out of 5 in Zomato due to lengthy service-time of ordered food to the table.
In this website, the review on Manjit’[email protected] has scored 8.6 out of 10 from 292 reviews. The restaurant has performed well for ist service, food and ambience of the location. However, the performance of the business has scored low for value for money. Therefore, such rating has indicated that price of the foods in Manjit’[email protected] is somehow higher than that of peers in Darling Harbour, Sydney.
The evaluation of sales promotion of Manjit’[email protected] shows that the restaurant has applied the social media appropriately for promoting its service as well as food quality. The experience of the visited customers of the restaurant has provided details information by sharing their experience with Manjit’[email protected] for food and service rendered by the business. Further, the customers have rated the restaurant as value for money, service quality, atmosphere and food quality. This Indian restaurant in Darling Harbour has consistently provided food for below AUD55 per person for dinner. Further, the strategy of the business shows that the management has updated its Facebook page for the existing customers regarding offers and a special menu in the restaurant. Thereby, such sales promotion has influenced the existing customers’ loyalty towards retaining them in future. In this context, the management of the company has shown their transparency towards providing all the reviews of the customers. However, in Zomato, there are some poor reviews (as low as 1) are provided regarding service or behaviour related issues. Thereby, such reviews can be considered as a negative rating for Manjit’[email protected] to retain customer loyalty.
The study has provided with the details regarding the sales promotion of [email protected] in Darling Harbour of Sydney. The research on this restaurant has provided important aspects regarding the ambience, service quality and food quality rating through its social media promotion. Further, the qualitative study has provided with the analysis on customer loyalty due to ratings provided by the existing customers in the various social media feeds. In addition to this, the research report has met the objectives of the study by investigating the impact of sales promotion of [email protected] through social media. The customer’s reviews about the restaurant in various aspects have been discussed in this report by analysing the overall reviews of the customers. The evaluation of customer loyalty has shown that the management of the restaurant has updated the special offers and menus on its Facebook page. Thereby, such promotion of the special offers has provided an advantage to create promotional awareness to the existing customers.
The sales promotion of [email protected] shows that the restaurant has not reviewed the customers’ review. The management has not responded to any poor review of the customers in any of the social media page. There are several poor reviews regarding the behaviour of the hostess, food price and others. Such non-activities of the management about the poor reviews show a lack of confrontation as well as the lack of intention to improve the service in future. Additionally, the service quality of the restaurant can be improved by adding more chefs in the operation, which can reduce the cooking time in rush hour. Moreover, the majority of the customers have reviewed the price as high compared to peers in this area. Therefore, the management is recommended to reduce the price of food or the minimum ordering amount of food for per person. The current minimum order of food is AUD55 per person, which is high comparatively as well as reduces the flexibility to the customers for their eateries.
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