Question

Problem 1C: Chapter: CHCC Problem: 1C Say It Ain't So! Is This the Real Thing? INTRODUCTION David Ortega is the lead researcher for an upscale restaurant group hoping to add another chain that would compete directly with the upscale Smith and Wollensky restaurants (http://www.smith-andwollensky.com). The Smith and Wollensky Restaurant Group operates a handful of iconic restaurants around the country. The average check for a customer at Smith and Wollensky is approximately $80 to $90. Whenever a new venture of this type is planned, one has to wonder whether there are enough customers willing to pay premium prices given the large number of lesser priced alternatives. In fact, David learns that Smith and Wollensky' is giving some thought to opening a lesser priced "Grill" that would be positioned so that the average customer check would be about half that of the original. Maybe the best way to position the new restaurant group would be as a premium value offering high quality steaks and service but at a more modest price. What is it that people are willing to pay for and what sacrifices can be made to deliver a high value experience if not a luxurious experience? How can he create a unique experience at a lower price without falling into a mere dinner house category? These are the questions facing David Ortega. RESEARCH APPROACH After considering how to study the issue, David decides a qualitative research approach will be useful. He hopes to develop a deep understanding of how the fine dining experience offers value-and perhaps some insights into what intangibles create value for consumers in general. After considering the different options, he decides on a phenomenological approach. The primary tool of investigation is conversational interviewing. David plans to enter into casual conversations with businesspeople in the lounge of the downtown Ritz Carlton. He begins the conversation by commenting on the wine he is sipping-something like, "It isn't bad, but it's hard to believe they get $15 for just one glass of this stuff." RESULTS Two weeks later, David has completed "conversations" with five consumers. He found them very willing and free to talk about the things they indulge in. He develops a field log of notes from the consumers' comments. The notes are recorded verbatim.2 The following field notes are highlighted:

Answer 1

Answer :- Comment on the research approach. Do you feel it was an appropriate choice?

The type of marketing research David used was descriptive research, since he was trying to “paint a picture” of the fine dining experience and the value consumers view in intangibles such as eating at a restaurant. He decided to use a qualitative research approach that he asked probing questions to businesspeople in the lounge of the downtown Ritz Carlton. The orientation of qualitative research that David used was phenomenology, which relies largely on conversational interview tools. (Zikmund, 2013, p. 103). This orientation is best accomplished by becoming a member of the group to ensure the businesspeople are comfortable talking with him openly about the subject of perceive value of fine dining. I do feel this approach was appropriate choice for David to use in obtaining the information that he was seeking. A fine dining restaurant is not all about how good the food is, but it is more about the environment and how consumers view the value. By David striking up conversations with businesspeople about a $15 glass of wine he found what their expectations are for a fine dining restaurant and that environment is important.

Answer:- David did not inform these respondents that he was doing marketing research during these conversations. Why do you think he withheld this information and was it appropriate to do so?

I think it is important in the situation David was in with conducting the marketing research in secret to ensure the information he was gathering is true. Sometimes people will not be so honest if they knew it was market research. “Marketing ethics is the application of morals to business behavior related to the exchange environment.” (Zikmund, 2013, p. 78). David’s behavior was ethical since his actions were fair, just, and do not cause one to feel shame. (Zikmund, 2013, p. 78). He was having a casual conversation with these businesspeople and did not ask them anything that would cause them shame. David was only probing for information about how they perceive the value of fine dining. Plus he didn’t want the people to withhold their opinion due to him conducting marketing research. As long as he is careful not to expose the people he is interviewing undercover to any unnecessary risks, respects their privacy of their opinion, and values their cooperation then he has demonstrated a concern for their protection of the people he used for his study. In addition, David uses anonymity with only using their first name, age, occupation, male/female, and race when he refers to the people he interviewed.

Answer:- Using the Internet, try to identify at least three restaurants that Smith and Wollensky compete with and three with whom the new S&W Grill may compete.

The Smith and Wollensky is a fine dining restaurant that offers prime grade beef, lamb, veal, and seafood dishes, along with an extensive wine list. (Hoovers, n.d.). The top three restaurants companies that Smith and Wollensky compete with are Morton’s Restaurant Group, Inc., Ruth’s Hospitality Group, Inc., and Palm Management Corp. (Hoovers, n.d.). Morton’s Restaurant Group, Inc. owns Morton’s The Steakhouse. Ruth’s Hospitability Group, Inc. owns Ruth’s Chris Steak House, Mitchell’s Steakhouse, and Cameron’s Steakhouse. (Ruth’s Hospitality Group, n.d.). The Palm Management Corp. owns Palm Restaurant. All three of the competitors are considered high end fine dining restaurants at about the same expensive price range. There is a target market with these types of high end restaurants, since the price range of an average check per customer is approximately $80 to $90. (Zikmund, 2013, p. 432). The S&W Grill serves smaller portioned meals at a lower price. I decided on the competitors by looking at the S&W Grill menu for prices and the food they serve. The top competitors for S&W Gill would be Capital Grille, Fleming’s, and Omaha Steakhouse. These three restaurants menu and price range are similar to S&W Grill. Customers do not need to have a huge pocketbook to be able to afford to dine at one of these restaurants, but the quality is close to the high end restaurants. The price ranges for an entrée at any of these restaurants are between $20 to $60. Smith and Wollensky need to find a way to attract customers in that price range away from their competitors.

Answer:- Try to interpret the discussion above. You may use one of the approaches discussed in the text. What themes should be coded? What themes occur most frequently? Can the different themes be linked together to form a unit of meaning?

The type of approach David used was phenomenology and grounded theory since they work best for conversations that are unstructured dialogue recorded by a researcher. (Zikmund, 2013, p. 107). This helps gain a unique insight into what businesspeople actually think about fine dining. This is a less expensive way of conducting research compared to in-depth interviews or focus groups. This method has disadvantages of easily going off topic and interpretations are dependent on the researcher. David conducted his secret interviews in the evening between 5:45 p.m. to 11:00 p.m. He recorded their first name, occupation, age, male or female, and race for each person he interviewed. He conducted these interviews in a high-end hotel, which was a good place to go since he wanted to discuss high-end fine dining. The people that stay at a place such as the Ritz Carlton would be customers at a fine dining restaurant. To strike up the conversations with these businesspeople he started talking about the $15 glass of wine he was drinking. The theme that occurred most frequently was about the ambiance and culture of the restaurant that it has to fit with the price and quality of the restaurant. All of the people want to know it’s the real thing not a fake. They don’t mind if it is cheap or fake as long as it is not being advertised as being the real thing. For example, one of the people said that he was out with a guy at a restaurant that ordered a bottle of wine and sent it back because the cork did not have the name of the vineyard on it. The person asked him why he sent the wine back and his reply was I didn’t know if it was really from that vineyard since the cork did not have its name on it.

Answer:- What is the result of this research? What should David report back to the restaurant group?

The results of this research for the restaurant group to compete in the high-end fine dining are they need to be the real deal. The restaurant cannot advertise prime grade beef when they are only serving choice grade beef. David should report back to the restaurant group his findings of keeping it real. People that go out to the fine dining restaurants expect high quality products as well as high quality service. Fakes or knock-offs will not be tolerated by people that would eat at a fine dining facility. For example, one of the people David interviewed was not happy that he bought Louisiana hot sauce in Louisiana that wasn’t even made in Louisiana on the label read that it was made in Tennessee. Nobody likes to feel stupid by their decisions and getting a fake when you are expecting the real deal is not a good thing. Going to a fine dining restaurant should be a fantastic experience with the food, drinks, service, ambiance, and the overall environment.

Reference

Hoovers, a D&B Company. (n.d.). The Smith & Wollensky Restaurant Group, Inc. Competition.

New York Magazine Restaurant Guide. (n.d.). Wollensky’s Grill Menu – Midtown East.

Ruth’s Hospitality Group. (n.d.).

Zikmund, W.G., & Babin, B. (2013). Essentials of Marketing Research. Australia: South-Western Cengage Learning