Analyzing the Impact of Location and Online Reviews on Cafes

This report delves into the critical impacts of geographical location and online reviews on the success of a cafe. It explores how these elements provide a competitive edge, influencing customer behavior and business sales. The literature review analyzes the effects of online reviews, emphasizing their role in brand recognition, customer loyalty, and profitability. It also examines the significance of location, discussing how strategic placement can attract customers and improve sales. The report further investigates strategies to manage the influence of location and online reviews, including enhancing customer satisfaction through product and service quality, and leveraging online feedback to boost brand reputation. The report also highlights the importance of adapting to customer preferences and the competitive market to ensure sustained success for cafes.

Impacts of location and online
reviews on cafe

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Literature Review.............................................................................................................................3
Impact of online reviews on cafe business.............................................................................3
Impacts of locations on Cafe business..................................................................................5
Strategies to deal with the influence of location and online reviews to get benefits for cafe 7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

Topic: Impacts of location and online reviews on cafe and how to deal with these
factors to get benefits for cafe.
INTRODUCTION
Geographical location and online reviews are the key components to the success of a
restaurant. These are also considered main elements which provides competitive advantage to
organization among customers in market It can be justified that sales are increased of business
and customers are benefited as they utilise money in accordance to reviews and decide to avail
services or not. Reviews of customers towards organization determines whether products and
service offered by Cafe meet the requirement of customers or not. In this report, literature review
is conducted to analyse impact of locations and feedbacks of cafe. Critical analysis of different
concepts, theories will be done to determine the methods to deal with influence of location and
online reviews to attain benefits for cafe.
Literature Review
Impact of e-reviews on cafe business.
According to Blal and Sturman (2014), “In past years, Online feedbacks that becomes a
part of success of and the owners are knows that good feedbacks from visitors can increase the
brand recognition, loyalty, sales and profitability”. So its important for restaurant to check the
feedback on social sites like Yelp, Top table, company's own websites are confidential for
analysing its performance.
As per analysis, there are various important issues that needs to be faced by manager to attain
customers regarding purchase of products and services. “Approximately 68 % customer are
going through the feedbacks before visiting the restaurant”. Another essential fact that 68 %
between age group of 30 to 39 years old that their visiting in restaurant is very much depends on
e-reviews. (Who uses online customer reviews?. 2018).
In addition to this Browning and et.al (2013), also suggested that visitors depends on the
reviews which are available easily. High level of faith is being analysed by customers as they
rely on online reviews and cafe is benefited.
In contrast to this, customers also make comment on social websites when they are
unhappy about business enterprise. Sometimes business entity also conducts customers reviews
cannot be considered as by customers while purchasing products. They only buy products by

emphasizing upon price comparison between competitors. People sometimes also provide
negative reviews intentionally to decrease the sales for the favour of other competitors which
created negative influence on recognition and sales of customers.
As per the view of Sparks, Beverley and Browning, Victoria (2011), In accordance with
high rating and e-reviews are considered as important factor in making heuristic approach of
customers in gaining reviews about firm on online basis. The customers using internet faces wide
valence feedback of purchases made by other customers.
According to prospect theory, customers with high values to the loss that to that of profit
which is associated with earning an amount. In other words, while choosing between two
alternatives losses will be considered first rather than gains. Increase in consumers perception
tends to provide positive influence on customers to buy products and service. Positive reviews
tends to create brand loyalty of organization among consumers and it will also bring sales to the
company in the best possible manner. Furthermore, it will have maximum profits to firm and can
effectively outreach competitors' strategies.
In contrast to this statement, Melián-González, Bulchand-Gidumal and González López-
Valcárcel (2013) viewed that “ the Argument is consistent with the notion of the negativity bias
which clearly refers to the tendency for a unit of activation to bring about a greater changes in
output by negative motivational system as compared with the positive motivational systems.
However, negative input also has major influence on attitudinal and behaviour expressions that a
positive input. From the information process perspective, it can also be argued that negative
information has a stronger influence on individual's judgement and choice than positive
information (Shu-li-Cheng, Wen-hsien Lin, Frederick Kin Hing Phoa, Jing-shiang Hwang, Wei-
chung Liu. 2015). It can be justified that negative reviews have adverse impact on organisation
as customer's perception tend to change.
Haghighi and et.al (2012) identified that negative online reviews bias largely occurs at
the stage of information and choice evaluation. Thus, negative online reviews could be more
attention grabbing in general and receive greater scrutiny, thus being more effective and
specifically have major effect on evaluations than positive messages.
Prayag, Landré and Ryan (2012) have also concluded that understanding consumer
requirements needs and wants has been a major source of success for hotel business.
Investigation provides clear understanding that positive reviews of customers also tends to

increase promotion of cafe in various countries. For example: Restaurant like Cafe portrait also
provide focus on customers reviews to improve their products and service. Analysis of customers
review will provide support in analysing current trends and expectation which are to be offered
by the business to ensure its sustainability. Results of study indicate that it attributes involving
the quality of products, internet provision and night board games as the highest impact on hotel
performance in an positive way. Positive comments have the highest impact on customer
demand. This study contributes to theory of valence on the performance of hotel and presents
salient implication for important practitioners to enhance performance.
More attention has been paid to the relationship online reviews and online buying as well
as satisfaction and online management. Study provides a clear understanding that online reviews
on social media websites and company's websites directly encourage large number of customers.
Online reviews are significant for large number of reasons and have major implications through
their ability to affect ranking in local search engines.
Impacts of locations on Cafe business.
According to Li and Liu, (2012), “location plays a key role in success of a cafe,thus the
locality of cafe is considered in making decisions on location.”. As per study, company will
attain large number of customers when their business or outlets are located at appropriate places
or geographic location. For example, if cafe is located at crowded place and where go for walk, it
will be pleasant for business as customer's will be easily attracted to. One of the marketing
principle states that the old customers are more profitable that the new customers. In restaurant
sector, revisit intention of customers plays an important role in protibility and growth of
restaurant.. the revisiting of customer indicates the satisfaction of consumers with the services of
the business. Meanwhile, author also mentions that the locality of restaurant is important to be
shown as a landmark on maps. It is a tough task for restaurant owner to be unique in choice of
location as it helps in attracting customer. Thus location for business is an important for
restaurant to gain profits.
Wrigley and Lowe (2014), The theory of minimum differentiation is considered as one of
the most important theories in retail location analysis. It determines retailers providing similar
products and service tends to cluster in the business centre. All restaurant can not be open a store
in market location. According to s central place theory, the demand of customers in market is
depend on its location. Companies situated in appropriate location such as tourist destinations,

malls, old city and near supermarkets etc. have major competitive advantage. They also get wide
opportunities to influence large number of local and other people to avail their services.
Products and services of brand also differ in different geographic location because of changes in
tastes and preferences of customers. Therefore, it is that performance patterns of companies
may varies with different regions.
The study of Park and Nicolau (2015), “Theory of stability in competition” suggest that
“In retail context, same operating stores in market will obtain high profitability and superior
performance if they are combined together”. In addition, “theory of cumulative attraction” given
by Nelson (1958), argued that restaurant or retail venture of varied categories also get benefits
from being located near to each other. Strong bundle of utilities effects exists between those
retail stores which attract customer's due their convenient location.
Bilogrevic and et.al (2015) argued that” the expenses of promotional activities has
positive impact on the location of store sales. Sometimes business at appropriate location, also
face issue or decline in sales and performance due to low quality or less preference of products
among consumers. Quality, price and other elements also provide major influence on sales and
performance of business at marketplace.
New model is created by scholar to explore the impact of small location selection of two
enterprise based on their performance. Huff model mainly concerned on the impact of the
customer selection of location at particular destination. Difference between performance and
sales of organisation can be determine by their selection of store location.
As per study of Kim and et.al (2013), Hotel's location plays major role in performance
and distribution system. Findings determined that, Accessibility to popular locations,
transportation facility, safety and high ratings are important for growth of restaurant business. By
analysing the optimal indicators with different scenarios of Agglomeration and competition,
Author has clearly stated that performances are more sensitive towards the effects of location as
compared to the effect of competition.
Study of Dubé, Brunelle and Legros (2016) also determines the impact of customer
choices on the store location. It also provides understanding that location plays a significant role
in influencing requirement in outlets. With continuous fluctuation in customer preferences, it
has become important for retailers to find new ways for business in order to enhance the
revenue. High competition in market results in making the restaurant business to change their

marketing strategy. Location of restaurant plays a major role in success of restaurant. It is an
important strategy which results in getting success. Location is essential element helping cafe to
earn more profits. For example, location at crowded place will be more beneficial rather than
location in narrow street. This also provide influence on Marketing mix and layout of stores.
In contrast Radojevic, Stanisic and Stanic (2015) stated that, Store location has strong
influence in long run planning. In that situation, choice of location affects the overall strategy of
organisation. However, in short term planning, company provides focus on its mission, goals and
target market. It also tries to influence the specific elements of retail mix strategy rather than
changing location.
However, above review of literature provide understanding that selection of appropriate business
location is essential for restaurant because it provides influence on performance, sales,
profitability and brand recognition.
Strategies to deal with the influence of location and online reviews to get benefits for cafe
As per the view of Fang and et.al (2016), “customer satisfaction is the key phenomenon
which drives business towards growth and success in market.” It is the results of perception of
values in getting transaction or relationships thereby values are equal to perceived service
quality related to customer's cost. It will be helpful in carrying out sales in effective manner and
as such, business will attain sales quite easily. Customer satisfaction is key element in driving
towards prosperity of organisation. Increasing in high quality services and satisfying customer is
an important factor which can increase profitability and performance of companies. Findings
determine that organisation can influence customer to provide positive online reviews by
increase its quality of products and service. Customer's getting better experience from products
will always desire to recommend others.
Variables which are associated with satisfaction of customers are distant from location or
size of restaurant and the rates of hotel level in the city location and most importantly perception
of people. Online reviews on company's and other websites is one of the most prevalent method
for customer to give reviews their help with the service provided by hotel. These evaluations are
commonly complied to create high ratting which is considered as important metrics for satisfying
customer. Thus, improvement in service quality tends to improve the online reviews of
consumers and business profitability. Study concludes that in a highly competitive hospitality

sector which offers homogeneous services, employers of restaurant must be able to better satisfy
customers than their counterparts.
According to Jaravaza and Chitando (2013), prioritizing customers is also analysed as
important for customers to attain high performance initiative and experience. It implies the
business owners needs to prioritize their time to respond to reviews of their customers. The
longer and more detailed the review, the more efforts employers should give it. An appropriate
and effective response to an over the top review can highly increase the scales of business and
creates positive perception in the mind of customers. Moreover, employers must personalize
their response by including name of reviewer and mention its specific characteristics of the
experience in restaurant.
Internet based services has an advantage as it is used by huge and active community which
continuously give reviews information. Internet service is for betterment of business as it can
reverse back to customer's who have posted reviews and queries can be resolved instantly. This
will be helpful in maintaining long-term relationship with them.
In contrast to this, Korfiatis, GarcíA-Bariocanal and SáNchez-Alonso (2012) stated
providing response to negative reviews of customer can sometime create negative influence on
image of brand. It can be dealt effectively by apologising customer for inconvenience and then
fixing the issues right over there and hence, brand image will not be affected. In society, people
mainly focus on analysing views of other towards products while making purchase decisions.
Company response on negative reviews can affects the perception of other customers towards
their products and service. This can also create opportunity for competitors to capture the market
share. It can be justified that people before making purchase rely on reviews and negative ones
drives them away to rivals. Study provide information that “Positive online reviews and response
make potential customers almost 70% more likely to trust a local business enterprise.
According to Lee and Ro, (2016), rewarding customers by formulating customer's loyalty
schemes can helps the organisation to comply with the influence of e-reviews of business
operations. Customers always get satisfaction from the benefits which are provided by
organisation other than services. Customers loyalty and rewards strategy is highly adopted by
large or international firms such as Starbucks, Burger king, McDonald and Cafe Portraits etc.
These loyalty programmes will create positive influence of customers and enable them to
provide positive reviews on websites.

As per the view of Lee and Ro, (2016), selection of appropriate business location is
considered as important for restaurant in long run planning because it influences the overall
business strategies of organisation. For setting up business, employers first needs to consider
convenience of target customers and analysing capabilities to attract customers. Author stated
that “the closer company is to their suppliers, the quicker their product can be on the market.
Other benefits can be the ease of customer service and ability to speak to someone face to face
at point of time. Business at specific locations should always need to analyse the culture and
other demographics of people to enable their requirements and perception towards products to
meet the requirements and preferences for attaining satisfaction.
In contrast to this, Korfiatis GarcíA-Bariocanal and SáNchez-Alonso (2012) also viewed
that retention of existing customers is more beneficial for organisation as compared to new
clients. At highly competitive business location, it is more beneficial for organisation to retain
existing customers rather than attracting new clients for selling products. Company needs to
identify issues of customers and take appropriate measures to resolve those issues. There are
various important measures like expansion of distribution channel, online purchasing systems,
free delivery systems will help in resolving issues and providing more convenience to customers.
CONCLUSION
From the above literature review, it is summarized the online reviews and location
provide both positive and influence on Cafe or hospitality business. Positive reviews of customer
tends to embrace the performance and profitability whereas negative reviews decrease the brand
image as well as sales of organisation in market. It is a tough task for cafes owners to deal with
location as it helps in increasing revenue by attracting more customers. Hence, location for
business is important to make revenue for restaurant. Retention of previous existing customers is
more beneficial for organisation as compared to new clients.

REFERENCES
Books and Journals
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<https://www.business.qld.gov.au/running-business/consumer-laws/customer-service/managing-
customer-reviews/who-uses>

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<https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0137842>