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HOS2110 – Food & Beverage Management
Title
Bianca Mills – 10396561
Arben Arifi – 10444480
Ali Alsofiyan_10421035
Word Count:
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HOS2110 – Food & Beverage Management
Table of Contents
Assignment Cover Sheet..............................................................................................1
Executive Summary 200-250 (Shubhdeep)..........................................................................3
Introduction 150 (Shubhdeep)............................................................................................4
Situation and Background..................................................................................................4
Competitive Environment..................................................................................................6
Selection Criteria................................................................................................................7
Technology Considerations...............................................................................................................7
Marketing Considerations.................................................................................................................7
Organizational considerations...........................................................................................................8
Findings and Recommendations........................................................................................................9
Financial Projections........................................................................................................10
Estimate of financial implementation of idea..................................................................................10
What this idea will yield..................................................................................................................11
Demonstrate its viability..................................................................................................................11
Value and viability...........................................................................................................................12
Projected Timeline 350.....................................................................................................13
Conclusion 150 (Shubhdeep)............................................................................................13
Appendix:.........................................................................................................................14
References:......................................................................................................................14
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HOS2110 – Food & Beverage Management
EXECUTIVE SUMMARY 200-250 (SHUBHDEEP)
This report was commissioned to evaluate the innovative idea within the food and beverage
sector. The innovative idea that is taken into consideration relates with developing the loyalty
mobile program app for the dining restaurants. It is analyzed that the mobile application that
will introduce in the market will help the internal and external stakeholders like customers
and workers. In the next part of the paper, the competitive environment has been explained in
which it is observed that loyalty programs are popular and it has been used by majority of the
hotels and retail outlets. So the innovative idea can be implemented effectively if emphasis is
given on offering loyalty programs.
But there are different selections that are considered in this report such as technology
considerations, marketing considerations, organization considerations. These are the factors
that will be considered by the company so that it could be easy to boost the overall demand of
the innovative idea in the market. In relation to technology considerations, the technology
should be implemented in the applications. The organization consideration as it will provide
an insight in which the change can help to bring improvisation in the process and practices. In
the last phase, it is recommended that to compete in the market, different options of the
services will be offered such as reservation facility. In reference to financial projections, the
emphasis will be given on creating the loyalty program in which staff training will be
provided at the implemented stage for the loyalty program.
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HOS2110 – Food & Beverage Management
INTRODUCTION 150 (SHUBHDEEP)
For this paper, the idea which is selected relates to developing the loyalty mobile program
app for the dining restaurants. It can be said that this is one of the best idea that should be
implemented by the company to boost the sales. To implement this idea there will be various
aspects that will be considered such as technology has assisted the companies to bring
improvisation in their quality of the customer service. Marketing consideration is taken for
this mobile application as it is necessary for the fast food chains to advertise about
themselves, so that it could be easy to boost the demand of the new application. This idea is
selected as it is effective according to the business scenario and it can also offer benefits to
the companies in reference to reducing the traffic congestion ad also assist in examining the
data of the customers (De Mooij, 2018). So, it can be said that this is one of the best idea
selected for the task in reference to the needs and demand of the customers in the present era.
SITUATION AND BACKGROUND
The innovative idea to be implemented within the food and beverage industry will
be to develop a loyalty mobile program app for fine dining restaurants which will co-align
with the restaurants operating systems. Some of the features of the mobile app include giving
customers the ability to simultaneously order food and drinks without waiting for staff to
come to the table, as orders can be processed through the mobile app and received to the food
production and beverage provision systems via an iPad. This feature can allow customers to
either order separately or together as each table can process multiple orders by each scanning
the table barcode via their own mobile app. The app will also co-align with the restaurants
paying systems allowing each customer to keep track of what has been ordered and the total
of their bill. Once customers have finished eating the employee at the front counter will scan
the individual app code on the paying system, as this feature will let customers pay what they
have each ordered. Another feature available on the mobile app includes giving customers the
opportunity to pick where they would like to sit up to 24 hours before their scheduled
booking if tables are available to do so. The loyalty mobile app will also have a special
feature such as menu viewing, which will let customers see what dishes are on the menu,
what are the current specials and what is the most popular dishes ordered through the app.
The mobile app will generate benefits for both the internal and external
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HOS2110 – Food & Beverage Management
stakeholders such as the customers, employees, the organisation and the food and beverage
industry. The first benefit of the mobile app is that it will increase the meal experience of
customers by reducing the waiting time on food and drink orders. This will also benefit the
organisation as it reduces internal constraints such as unskilled staffing, human error as well
as food and beverage wastage. These benefits can be generated without losing the human
interaction with employees as they will still bring the food and drinks to the tables and
operate the paying systems at the counter. The mobile app can also reduce the controlled
negative moments of truth as it helps clarify customers’ expectations by informing what
bookings have already been made and letting customers choose where they would like to sit.
Most importantly the mobile app can benefit the organisation and the hospitality industry by
giving restaurants the ability to continuously monitor the customer’s transaction data as this
valuable data can help organisations within their menu analysis and customer relations by
knowing what their customers prefer and dislike.
According to (“Why your restaurant needs a loyalty program now,” 2017), by
implementing loyalty programs it will create big opportunities for the food and beverage
industry as restaurants can gain a better understanding of customer behaviours and customer
relations which can overall increase customers loyalty. Therefore, by selecting a loyalty
mobile app it can ensure that the food and beverage industry can keep up to date with
technology trends which are becoming exceedingly popular within the hotel and retail
industries. As well as create a competitive advantage by giving fine dining restaurants the
option of split billing which is something that is lacking within non-fast food restaurants
(Chung, 2017).
COMPETITIVE ENVIRONMENT
Loyalty programs are becoming exceedingly popular and have been adopted within
multiple existing marketplaces such as fast food restaurants, retail outlets, hotels, and cafes.
According to (“How Restaurants are Using Loyalty Programs to Boost Business,” 2018),
30% of restaurants offer some type of loyalty programs with rewards or special offering to try
and get customers to continuously come back. However, this loyalty program app for fine
dining restaurants will differ as it offers features such as faster service, menu viewing, split
payment and booking options which are not offered by existing restaurants. The target market
for this loyalty program will be new and existing customers who eat at fine dining restaurants
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HOS2110 – Food & Beverage Management
within Perth’s CBD as these customers include couples, families, international tourists and
domestic visitors. There are a lot of different restaurant competitors within Perth as there are
many cafés, fast-food and family restaurants who use loyalty programs as a strategy of
product promotions and incentives to gain customer loyalty these include Crown Perth,
McDonald’s and Southern Star Perth. Whilst, there is no fine dining restaurant within Perth
that use loyalty programs to provide customers with special features such as split billing to
increase customer satisfaction and experience.
The loyalty program will be distributed to customers by a mobile app which will co-
align with the restaurants operating systems. The restaurant will use an iPad to receive orders
to the kitchen and bar as well as the service counter where customers will pay. (“How
Restaurants are Using Loyalty Programs to Boost Business,” 2018), suggests that 57% of
adult consumers will be more likely to dine in restaurants that offer loyalty programs over
places who do not use one. This shows that customers will want to use the loyalty program as
it will provide higher satisfaction due to restaurants being able to build better relationships
with their customers. As customers want to be informed of expectations, knowing menu
opinions, dish preferences from other guests and receive services like split payment and self-
ordering.
SELECTION CRITERIA
TECHNOLOGY CONSIDERATIONS
Getting technology implemented in the app and making it as easy as possible is
important. The reason for this is because it can aid the restaurants and food deliveries alike.
Information Technology has not only helped the restaurant business owners in order that they
can improve the quality of customer services, as well as enable them to go beyond their
limitations in reshaping businesses. Tiwari, (2019) discusses ways of the usage of mobile
apps using technology in a restaurant business and benefits as to how technology being
implemented in Mobile Apps helps the restaurant business thrive. These include: Online Slot
Reservation, which enables users to book their slots in order to determine whether the table
that they want is free or not. This can reduce Traffic Congestion in front of Restaurants. Also,
they manage data from customers and updates the information with relevant information,
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HOS2110 – Food & Beverage Management
such as discounts, special offers and attractive deals, Digital Menu Card, which provides
users with a convenient experience. It allows them customers with the option of choosing
food items with the click of a button as well as choosing a restaurant according to your
budget and preferences in terms of food items and Location Based Deals, which is a
relatively new feature which can help you to increase your restaurant sales. Apple's iBeacon
uses this technology. It is basically a small device which sends a Push Notification to a
customer who is near your restaurant. By using this you can tempt and lure your customers
by offering deals that they can’t refuse.
MARKETING CONSIDERATIONS
Marketing a product is important for consumers to get to know and understand
the product before they use it. For this mobile app, it’s important for fast food chains to
advertise this wherever they can, like Billboards, Buses, TV and Radio as this can get
consumers aware of the new mobile app coming soon and to be aware of how to use it. But
how else can you market this product? S, (2019) discusses some ways that a fast food app can
be marketed, including the following: Defining the Target Audience, which defines the
Information about the target audience including Demographics, Location, their interests and
lifestyles, Create a Unique Selling Proposition, where you need to think of your target
audience needs and pain points as well as how the app will differ from others currently in the
market, Use Content Marketing, where it involves Building the trust with customers and
building brand awareness and Social Media, where the organisation needs to choose the right
platforms, Leverage Influencers, Keeping a Balance, Aligning competition with audience,
Using social media to spread the word about the business and advertising the mobile app. As
well as this, De, (2019) talks about ways that business can build on revenue based on how the
food app can be marketed, including the following: Sensible Location Based On Customer
Location, where it involves building an app with a GPS feature that can control the position
of the customer, which can then allow the delivery app sending push or text notifications to
the user, Easy Ordering and In App Payment, Offering Mouth Watering Images for products
on the app, Be Innovative with the menu so you can fill seats and Push notifications can be
beneficial and can produce a return on investment.
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HOS2110 – Food & Beverage Management
ORGANIZATIONAL CONSIDERATIONS:
The restaurant implementing the proposed loyalty app will need to make some
changes in its processes and practices. Firstly, the staff will need to be trained in the
functional areas that will co-align with the mobile app that customers will be using to place
orders. Employees will have to be trained in receiving and accepting orders online to
ensuring that the correct orders are delivered to the right tables. This will include training for
kitchen staff and drink servers as this will differ from the industry norms within the area. The
organization may either decide to add the responsibility of receiving online orders to their
present servers and waiters, or it may decide to appoint an additional worker to coordinate
between the apps and with the kitchen and serving staff. The staffs that will be involved in
the process of hiring any additional staff need to know what they want for any employees that
are applying, like previous experience, to know whether they fit into the organisation, based
on their social media exposure. The way that you can attract employees online is by creating
an interactive website, writing smart blogs and having a presence on your social media
avenues, as well as being able to communicate on mobile devices (Dodd, 2019).
The payment systems of the restaurant will need to be upgraded to accommodate the
new practice of each diner at the table paying for their food separately through the app.
Hence, the revenue per table would be calculated from multiple sources instead of a single
source. This would affect how the organization calculates its costs and revenues whether its
per table, or per diner. However, this would give the organization greater clarity into which
food items are popular with which particular diner, so that they can offer incentives to
reinforce buying habits (Hardy, 2018). The menu planning and designing would also be
impacted because the app would provide the management with a micro-level analysis of how
many times and at what times of the day or week a particular dish is ordered.
No changes or disruptions would arise in the way the organization handles reservations since
many restaurants already offer online reservation facilities for diners.
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HOS2110 – Food & Beverage Management
FINDINGS AND RECOMMENDATIONS:
The proposed mobile app will have widespread applicability in different types of
restaurant establishments because of its general features. It will be targeted primarily in non-
fast food restaurants in the Perth main city area which offers some challenges for this app
because of low resource availability (Hastie, 2018). The app needs to be as competitive as
possible comparing to other apps out there on the market because you want to be able to
create an app that is different to other apps in the sense where it could be developed by
someone different to other apps as well as being able to offer different deals and different
designs of the app compared to others. The proposed app includes additional utility such as
making reservations, browsing the menu, making individual orders and split bills payments.
The app is expected to be successful upon introduction because it offers both customers and
restaurants the opportunity to enrich the service experience. Customers get more efficient,
user-friendly and personalized service, while restaurant management get access to data about
customer behaviour and preferences. While Coelho and Henseler (2012), explain that
customization improves customer satisfaction and loyalty, Meola (2016), has also recognised
that Starbucks has achieved significant marketing success with its loyalty program by
allowing customers to make more online purchases.
Similar loyalty apps are already being used in the industry, so there is likely to be a
very short learning curve for customers. However, restaurants are expected to experience
some disruptions as they acquire staff training to learn how to receive orders from mobile app
on the IPads. They will also need to educate their service counter staff on how to receive
individual payments via the app and record them on the payment system. They also need to
be able to advertise the app to their customers so then customers can be drawn to the
organisation and want to install the app on their mobile devices. The financial costs of
developing the app are expected to be low because of the easy availability of consultancy
firms that offer digital loyalty program software.
Based on the above feasibility study of the proposed loyalty app, it is recommended that
the app should be developed because it has a reasonable cost of investment while offering
high value and utility for users and restaurants. The following factors strengthen the case for
recommending the project:
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HOS2110 – Food & Beverage Management
 The app can be developed without heavy initial investment by acquiring the services
of a third party vendor or consultancy agency.
 The market chosen for launching this product has a high presence of restaurants and is
a busy metropolitan area of the country, frequented by tourists and locals alike.
 The app offers added value to the customers since none of the apps currently being
used in the non-fast food sector in the Perth metropolitan area are offering similar
features.
 Restaurants are expected to invest in this app because it would provide them
information to improve their business strategies and marketing activities.
 The app offers a highly personalized service to clients which are something that they
appreciate and value while also being familiar with their use.
FINANCIAL PROJECTIONS
Implementing loyalty programs can be costly if you start from scratch, however
There are digital loyalty programs software’s available which can be done though hiring
consult agencies. Conarch Loyalty program management mobile application dedicated
software without the need for 3rd party hardware support.
ESTIMATE OF FINANCIAL IMPLEMENTATION OF IDEA
Restaurants would also have to implement iPads and new software within the
restaurant to allow orders to be received to the kitchen, bar and service desk. Restaurants
would start making money after they implement the right software and I need for
advertisement to inform potential customers of these new types of services.
· Free updates/downloads
· Costs $50 - $500 per POS device/month (unless already have one)
· new IPAD POS System – approx. $800-1000K investment
· Modern user interface
· Cloud based
· Manage security rich integration – social media and eCommerce providers
· FREE gateway payments
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WHAT THIS IDEA WILL YIELD
Its estimates that increase sales volume by 25%
1. Whilst on the app customers can see pictures of the foods and that could tempt
them to order additional items from the menu
2. They could probably see feedback from other customers about a particular dish –
there and then and entice them to order that item – even out of curiosity
3. They may be close to achieving greater awards, so likely to order extra for that
reason – even it is for a ‘doggy bag’
4. Yield insight into customer behaviour
5. Enhance the value of the brand, increase product availability and/or neutralize a
competitor’s program
6. Some LP when integrated with ecommerce can capitalize on cross-brand
recognition –
DEMONSTRATE ITS VIABILITY
1. Need to design separate programs for different segments - Inventory management
2. Analytic reports – to know how loyalty programs are working
3. Customer marketing
4. Receipt emailed to customer
5. Loyalty programs directly influence company value – it can help build a customer base that
will continue business with you
6. Finance teams benefit from concrete data and methods – make better decisions
7. Loyalty program is a great way to increase sales, strengthen customer relations and offer
incentivize your customers to return.
8. It can be great way to facilitate business communications with customers –
9. To enable a business to provide special differentiated services to best customers – according
to their value to the business -
10. These Loyalty programs are structured marketing strategies too – how customers can be
influenced into making additional future purchases
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HOS2110 – Food & Beverage Management
11. A group of businesses as a collective can advertise cost effectively through the loyalty
program
VALUE AND VIABILITY
Developing a loyalty program can be a big project and everything needs to run
smoothly as possible when it is launched. Staff training will be a big part of the
implementation stage for the Loyalty Program. They need to be aware of the benefits of the
Loyalty Program and be positive and confidence enough to be able to promote it to the
customers
1. Provides wealth of insights into company’s cashflow
2. Provides member specific transactional data –
3. Analyse behaviour of customer trends – so organisation make decisions on items that limit
profitability
4. Keep customers from defecting – by providing incentives Loyalty Program’s encourage
consumers to direct more of their purchases towards a business and less at competitors
5. Economic value of RME needs to be positive, but negative RME beneficial – signals for
early intervention and redirecting company efforts
6. The existence of a reward program can be what makes the differences between buying from
one place or another
To demonstrate further the loyalty programs viability, we need to understand the
capacity management from the company’s point of view - That is the 4 challenges - volume,
variability, variety and variation; Volume: These challenges will be managed by the loyalty
program as this will be a reason why sales will increase by 25%. As the app can give us data
and information about the number of customers coming through the door so we could manage
demand and perishability to not over produce.
Variety & Variation is managed through monitoring the customer data and can tailor menu to
what is desired and increase customer satisfaction
Variability; since we will have customer data and historical sales to look at we can see which
days are the busiest and tailor that to increase our sales.
PROJECTED TIMELINE 350
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HOS2110 – Food & Beverage Management
Action By week;
Analyse company’s historical data (ask questions about each customer) 2
Set Goals and Budgets 4
Prepare/create/or buy CLP 6
Add features – analytics – software – social media integration 8
Release on preferred platform 12
CONCLUSION 150 (SHUBHDEEP)
It is concluded that this is the viable innovative idea as in the present era; the customer
requires the services that are affordable in nature. This application will help to offer the
customers to book their seats by sitting at home. The company will also focus on targeting
the non-fast food restaurants in the Perth main city area which will help in maintaining the
large customer base. It is important for the companies to use these types of services as it will
help in creating the demand of the services offered in the market. In relation to financial
projections the emphasis will be given on viability of the loyalty programs by emphasizing on
the volume, variability, variety and variation. By considering these factors it could be easy to
accomplish the set targets in the competitive market. So, it can be said that this idea should
be implemented by the company for the overall growth and success in the market.
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HOS2110 – Food & Beverage Management
APPENDIX:
REFERENCES:
Chung, F. (2017). Split Bill? That’s un-Australian. Retrieved from News.com.au website:
https://www.news.com.au/finance/money/costs/split-bill-thats-unaustralian/news-story/
a84911dd963f5a867486be5b2fff4040
De Mooij, M. (2018). Global marketing and advertising: Understanding cultural paradoxes.
SAGE Publications Limited.
How Restaurants are Using Loyalty Programs to Boost Business. (2018). Retrieved from
Upserve Restaurant Insider website: https://upserve.com/restaurant-insider/best-
restaurant-loyalty-programs-common/
Why your restaurant needs a loyalty program now. (2017). Retrieved from QSR Media
website: https://qsrmedia.com.au/vendor-and-suppliers/news/why-your-restaurant-
needs-loyalty-program-now
Bandoim, L. (2019). Artificial intelligence takes over restaurant reservations. Forbes.
[Online] Available at:
https://www.forbes.com/sites/lanabandoim/2019/04/27/artificial-intelligence-takes-
over-restaurant-reservations/#6a5d05d37aea [Accessed 5 May 2019]
Coelho, P. S., & Henseler, J. (2012). Creating customer loyalty through service
customization. European Journal of Marketing, 46(3/4), pp. 331-356.
Dodd, P. (2019). Navigating workforce shortages in the restaurant industry. Restaurant Dive.
[Online] Available at: https://www.restaurantdive.com/news/navigating-workforce-
shortages-in-the-restaurant-industry/552265/ [Accessed 5 May 2019]
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Hardy, K. (2018). Inside the digital future of restaurant loyalty. QSR Magazine. [Online]
Available at: https://www.qsrmagazine.com/exclusives/inside-digital-future-
restaurant-loyalty [Accessed 5 May 2019]
Hastie, H. (2018). 'I look to the light': Plenty of positives in WA restaurant scene. WA Today.
[Online] Available at: https://www.watoday.com.au/national/western-australia/i-look-
to-the-light-plenty-of-positives-in-wa-restaurant-scene-20180713-p4zrcz.html
[Accessed 5 May 2019]
Meola, A. (2016). Starbucks plans to spend even more to improve its mobile app. Business
Insider. [Online] Available at: https://www.businessinsider.com/starbucks-mobile-
app-proves-successful-marketing-strategy-2016-4 [Accessed 5 May 2019]
De, S. (2019). 6 Ways A Mobile App Can Boost Your Fast Food Business Revenue. [online]
Medium. Available at: https://medium.com/@swarnendude/6-ways-a-mobile-app-
can-boost-your-fast-food-business-revenue-e302a8cd6aee [Accessed 15 May 2019].
S, V. (2019). 4 Useful Tips on Marketing a Food Delivery App. [online] Rubygarage.org.
Available at:
https://rubygarage.org/blog/how-to-market-food-delivery-app [Accessed 15 May
2019].
Tiwari, U. (2019). 10 Benefits of using mobile app technology in a restaurant business –
Peerbits. [online]
Peerbits. Available at: https://www.peerbits.com/blog/restaurant-mobile-app-
technology-benefits.html [Accessed 18 May 2019].
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