Location-based Marketing Tactics for Restaurants

Hong Kong is one of the top 3 cities in the world with the highest rent.  Many restaurants are established in sometimes the most obscure locations to avoid the high rent to survive.  Operating restaurants in different locations requires different marketing tactics to attract the greatest number of customers.  This post focuses on the different promotion tactics for each type of location.

Shopping Malls

It is very common to find many restaurants located on the top floor of many shopping malls around the city.  Having customers go all the way up to the top floor and passing through all the shops increases the likelihood of shopping.  Some new shopping malls have plenty of floors (for example, the Megabox shopping mall has 19 floors of restaurants and shops) and restaurants are established on dedicated floors.  

If a restaurant has decent products and services, it is not difficult to find customers coming into the restaurants by themselves. Usually the shopping malls organize promotion events (perhaps seasonal events such as the Chinese New Year's eve or Christmas) and can draw huge crowds during the holidays.

The marketing tactics for having a restaurant in a shopping mall are:

• joint promotions with the shopping malls.  One example of such promotions is to offer meal discounts for those who spend over a certain amount at the malls.

Streets

A large number of restaurants are established in regular streets. Some restaurants just don't do anything in terms of promotion because on a busy street, someone is bound to walk in.  For this reason alone, the rent for a restaurant in a busy street is often extremely high.  Some restaurants therefore move into hidden streets in which not many people have a reason to go there to eat.  These restaurants therefore must promote a lot to give people a reason to visit.

The marketing tactics for having a restaurant in a street are:

• for those restaurants in busy streets, every once in a while having a huge promotion sign near the restaurant entrance can draw huge crowds.
• for those restaurants in hidden streets:
• tell potentials customers about the uniqueness of the products and services using targeted advertisements such as in food related publications, food websites or celebrity endorsements etc.
• those without a budget can make use of the internet.  Promote in internet food forums, food websites or use social media platforms such as facebook or twitter etc.  Word of mouth or word of mouse works best.
• promote in travel publications.  Tourists don't mind spending time to find good restaurants in foreign countries.

Buildings

Many new restaurants now move into commercial office or residential buildings because the rent is substantially cheaper.  However, the price to pay for cheap rents is that it is much harder to get people to take the elevators to visit these restaurants.  Without any promotion, nobody will know that there are restaurant establishments inside any of these buildings.

A lot of cafes are established inside commercial buildings in a busy shopping district.  Young customers are generally more receptive to patronizing these places.  They don't mind taking the elevators.

Some restaurants such as private kitchens (restaurants which serve only 12-24 customers each night) often do not want too many customers.  Some may only open for business on the weekends.  They rely solely on word of mouth promotions.

The marketing tactics for having a restaurant in a building are:

• promote in youth related magazines.
• use word of mouth heavily.  It may take a while to secure a group of loyal customers.  Having good products and services is essential.
• use social media platforms to spread the word.

Factory Buildings

According to the laws of Hong Kong, restaurants inside factory buildings cannot have any sign that says "this is a restaurant".  Restaurants located in these buildings look just like any manufacturers or factories.  Most of the factories in Hong Kong have moved north into China, so in the last 20 years or so more and more of these factory buildings have become offices.  These restaurants don't even serve customers on weekends and align their working hours to the 9 to 6, Mondays through Fridays schedule.

The marketing tactics for having a restaurant in a factory building are:

• promote by fax, email etc to offices inside or nearby factory buildings.

Agglomeration

In some of the tourist attraction areas, many restaurants are established one next to another.  This is called an agglomeration and is a powerful marketing tool.  One example of an agglomeration for restaurants is Lan Kwai Fong where many restaurants and bars are established in the same area in the Central district in Hong Kong.  If customers cannot find seats in a restaurant, they can just walk to the next until they can find seats.  Usually restaurants in an agglomeration promote together during special events such the New Year's eve celebration.

The marketing tactics for having a restaurant in an agglomeration are:

• joint promotion with other restaurants during special events such as Halloween.

Conclusion

Restaurants in each type of location have different challenges.  Location is only a small piece to the big picture.  Although it has become more and more difficult to operate a restaurant due to rising costs, those who are able to survive are the ones who can come up with creative survival ideas.

Fresh Made Burgers: the End of McDonald's?

Here in Hong Kong, there are many burger joints which offer fresh made burgers: Monster Burger, BLT Burger, MOS Burger etc.  These joints offer a different kind of service than the traditional burger joints such as McDonald's or Burger King.  The moment when you order a burger, the shop will make it from scratch.  Therefore these burgers are fresher and hotter.

One good example of fresh burger joint is the famous MOS Burger from Japan.  It is the second largest fast food franchise in Japan with shops in many Asian countries.  At the time of this blog post, there are 15 MOS Burger joints around Hong Kong.

After you order a burger, and if you decide to eat inside the shop, you pick a seat and wait for your order.  After your burger meal is made, it will be delivered to you by a waiter or waitress.  The following picture shows a fish burger at MOS Burger:

The burger was really hot and it is the way I like it.  Of course, the service offered by MOS Burger comes with a price.  A fish burger meal is about HK$37 whereas a fillet-o-fish meal at McDonald's is about HK$24.  So customers are paying more than 50% premium for MOS Burger's service.

There are way more variety of burgers at MOS Burger than McDonald's.  At the same time, the number of seats is a lot smaller.  What customers get is a comfortable (that is, not crowded) place to enjoy an expensive burger meal with relatively good customer service.  The question is: are customers willing to pay this price?

The answer is an astounding yes.  Life is short.  Take your time and enjoy your food.

What Does it Take to be Shown in the Michelin Restaurant Guide?

Hong Kong is the food capital of the world.  You can find virtually anything to eat here.  Every year Michelin publishes their restaurant guide.  There has been some controversies with the guide because many say that the restaurant list doesn't represent the true restaurant scene in Hong Kong.  The list has been seen as bias towards Western restaurants serving non-Chinese cuisines.

At one point Michelin started to include more local Chinese restaurants in its list, but these restaurants refused to be named, claiming that they don't need any foreign authority to say that they are good or bad.  Regardless, the controversies do help to get these restaurants exposed in the media and people would take notice of these restaurants.  Promotion is free so take advantage of it.

A few weeks ago I visited a Michelin 2010 listed 2-star Chinese restaurant in the Langham Hotel:

We ordered a few dishes and it turned out that one of the dishes was incorrectly put into the order system by the waiter.  We said it's okay and would be glad to pay for it (we are a loyal customer and have been to Ming Court many times before).  The waiter immediately said in order to make up for his mistake, he would like to offer an expensive desert to us  free of charge.

In service marketing, this is called enpowering the frontline employees.  These employees have the authority to do whatever necessary under the circumstances to resolve issues with the customers.  This is almost unheard of in the local Chinese restaurants, since most owners tell their frontline staff that if you make mistakes, they come out from your paychecks.

Ming Court dishes are not that outstanding among all the available Chinese restaurants in the city.  However, not many restaurants will be able to match its service.  Keep in mind that the service is part of the marketing strategy a restaurant should have, since it affects the perception of the restaurant's brand.

Promoting Restaurants with Celebrity Endorsements?

There are two types of food critics here in Hong Kong: one is called Food Critic (食評家) and the other type is called Eating God (食神).  The term Eating God has become very popular after the release of Stephen Chow's 1996 movie called The God of Cookery:

The other day I walked by a restaurant and saw a picture of a well-known Eating God (he's known as the Young Eating God) with the restaurant owner posted on the front doors of the restaurant.  I cannot help but wonder if a celebrity says he/she patronizes this restaurant, will I be tempted to patronize the restaurant myself as well?

Celebrity endorsements used as a marketing tool for products and services are quite common.  Personally I never understand the appeal or effectiveness.  In the context of a restaurant business, would I intentionally go to a restaurant just because a certain celebrity endorses or visits it frequently?

Restaurants or food are different from other products or services in the sense that people have great differences on why they like to eat certain kinds of food.  The likeness factor is very personal.  Some people love spicy food but I cannot eat it.  So if my favorite movie star says he often goes to a particular curry restaurant, that's not going to affect me because I don't eat or like spicy food.  Nothing he says is going to change that fact.

What makes us like to eat a certain kind of food?  Is there any criteria for likeness?  It is very difficult to come up with a laundry list of reasons because everyone can have very different preferences.

A better promotion strategy for restaurants is to use social media.  When 10 friends say that this particular is restaurant is good, I will at least try it once and see what happens.  On the contrary, one person (celebrity) says I should try it doesn't make it persuasive enough for me to take action.

Ordering the Same Dishes Every Time

Have you noticed that when you go to your favorite restaurant (or one of the many restaurants you visited before), you look at the menu and order the same dishes you ordered last time you were there?  If you do this, you are not alone.  I went to a Japanese restaurant last weekend and I ordered the same salmon sashimi during my previous visit:

Why do we do this?  Isn't it boring to eat the same dishes every time in the same restaurant?  Don't we want to explore the wild?  Here are a couple of reasons:

1. Reading the menu is a waste of time.  We go to restaurants because we want to eat.  We hate spending all the time only deciding what to eat and not eating.
2. People are afraid of change.  It is a safer investment to order the dishes we know we like, rather than take the risks to order something new and it turns out to be bad.

Any restaurants practicing any sort of customer relationship management strategies can exploit this behavior .

1. Instead of giving the customers a menu, ask the customers if they want to order the same dishes based on their past ordering history.  Now that is customer service.
2. Reduce the operation costs by getting rid of dishes that aren't popular.
3. Focus on improving existing dishes instead of designing new dishes.
4. Cross-sell new dishes that may be of interest to the customers given what they usually order.

Remember that only the food in a restaurant is not enough to keep customers from coming back.  The atmosphere, the service (very important), the hygiene etc are all important factors in creating royal customers.