The Impact of Supplier Development on Financial Performance in the Restaurant Industry

ABSTRACT

Many firms have come to recognize the crucial role that cooperative relationships with suppliers play in determining high financial performance. Of main concern in many firms are supplier development activities and behaviors (SDABs) of buying firms, which are an attempt to meet current and future business needs such as high financial performance by improving supplier performance. The purpose of this study is to evaluate how buying firms' SDABs affect supplier performance (in delivery as well as product and service quality) and its impact on financial performance of the buying firms. The authors critically revisit extant knowledge on the subject, develop a conceptual framework integrating buyer and supplier relationship marketing/management practices, and test the framework in the independent restaurant industry context. Using structural equation modeling and data collected from 236 restaurant owners and/or presidents in the United States, the results of this research support the usefulness of the framework, showing that buying firms' SDABs directly affect supplier performance, which leads to high financial performance of the buying firms.     

The research design used to develop a high performance management system construct for US restaurant managers

Studies suggest that when organizations place a higher value on their employees, through the implementation of high performance management systems (HPMSs), their business performance improves. Those that have conceptualized the HPMS construct in the service sector have limited validity for the restaurant industry. To fill this gap this paper presents the research methods used to develop a construct for a HPMS within the casual restaurant sector of the US hospitality industry. The exploratory qualitative methodology that combines a variety of data collection techniques including interviews for the pilot study, the Delphi method and secondary data collection to establish the most salient dimensions of a HPMS in the casual restaurant industry, are discussed. Thirteen key HPMS dimensions are identified; training and skill development, employer of choice, information sharing, selectivity in recruiting, measurement of HR practices, promotion from within, quality of work/life, diversity, incentive pay based on performance appraisal, participation and empowerment, employee ownership, self-managed teams and high wages. In addition, an overarching HPMS construct is developed as a first step in identifying the link between HR practices and restaurant performance.     

The sway of influencer marketing: Evidence from a restaurant group

Influencer marketing has become a powerful channel for brand promotion and market expansion in the hospitality industry. However, those responsible for implementing influencer marketing campaigns are susceptible to the “myth of viewability” and rely on the Cost Per View (CPV) evaluation metric, rather than the more appropriate Cost Per Action (CPA). The current research explores the aforementioned myth from a hospitality management perspective by identifying the types of image (or photo) which attract more audience commentary or liking. A qualitative research approach is adopted involving two experiments with influencer pairs across the restaurant context in Taipei, Taiwan. We selected influencers Q and S as our manipulated group. In sharing images on their social media platform, it was found that they make greater use of personal than of food related images. The opposite was the case for the controlled group - influencers X and A – who shared more food than personal images. The researchers tracked viewer responses and then actions towards influencer postings to determine (a) which influencer approach draws more views and (b) the costs that are attributable to views and/or actions. They drew upon the findings to formulate an Owner-Influencer Matrix, a strategic planning tool and framework that helps owners and influencers to optimize influencer marketing. It is concluded that interactions between influencers and business owners should be beneficial to both parties. This empirical study may provide business owners and social media influencers with insights about communicating the respective brand values of their counterparts and designing sponsorship collaborations with a capacity to generate the desired consumer responses.     

American theme restaurants: A study of consumer's perceptions of the important attributes in restaurant selection

In recent years, a number of American theme restaurants have established in Hong Kong. Keen competition exists for this type of restaurants. Customers who visit this type of restaurant seem not only to enjoy their food but also to enjoy their environment. However, little is known about what customers expect and how they select this type of restaurant. In order to have an understanding of customers’ behaviour in relation to the customers’ perceptions of important restaurant attributes in selecting an American theme restaurant in Hong Kong, a study was conducted. The results indicated that ‘Food quality’, ‘Servers’ attitude’, ‘Value for money’, ‘Atmosphere’ and ‘Word‐of‐mouth’ were the five important restaurant dimensions as considered by consumers in selecting an American theme restaurant. Customers for this type of restaurant are likely to be professionals, highly educated and belong to the middle‐income group in the society. Customers usually go to the American theme restaurants for meetings, fun and enjoyment. Marketing implications and directions for future studies are discussed.     

Analysis of the financial practices of high and low performing firms over periods of peaks and troughs of the restaurant industry cycle

This study examined the financial practices of high and low performing firms in the restaurant business over the industry cycles. The purpose is to determine whether differences exist in the financial practices of high performers versus low performers during different stages of the cycle. In this manner, this study is able to reveal the nature of financial practices of successful firms in the restaurant business. Results show that the patterns of exercising their financial strategy over the industry cycles are significantly different. The findings of this study can be used for improving corporate investment performance through understanding the cyclical behavior of the economy and the restaurant industry. This should then presumably result in competitive investment decisions of various firms, thereby improving the effectiveness of resource allocation.     

Effects of message framing on food allergy communication: A cross-sectional study of restaurant customers with food allergies

The prevention of allergy reactions to food requires communication between individuals with food allergies and restaurant employees. This study investigated the effectiveness of framed messages (gain-framed versus loss-framed) in encouraging food allergy communication and explored factors that influenced customers’ intentions to communicate with restaurant staff about their food allergies. A total of 291 valid survey responses were collected. Approximately 70% of the participants had experienced food allergy reactions in restaurants, but less than 15% of them could always communicate with restaurant employees before placing food orders. Overall, participants perceived dining out as somehow risky. Gain-framed messages were more persuasive than loss-framed messages in encouraging food allergy communication. Fear, attitudes toward the messages, the perceived effectiveness of the messages, and the severity of one’s food allergies were significant predictors of customers’ intentions to communicate. Customers’ attitudes toward the messages mediated the relationship between message format and the behavioral intention to communicate.     

Paradox of authenticity versus standardization: Expansion strategies of restaurant groups in China

Restaurant customers demand both personalized innovative, yet, affordable service delivery. Accordingly, restaurant groups that seek expansion must consider how to respond effectively to the standardization–authenticity paradox. This paper addresses two questions: what is the relationship between standardization and authenticity? How can restaurant managers use these concepts for the strategic positioning of their restaurant group? Typically, researchers present the two dimensions as a binary. In contrast, this paper first presents a theoretical model and analyzes the variations in the standardization–authenticity relationship. Subsequently, it classifies restaurant group expansion strategies into four categories: standardization of authenticity, authentic alliance, standardized chains and heterogeneity, and examines their respective level of competence required to increase performance. It concludes by presenting suggestions to position restaurants in terms of the extent of standardization and the extent of flexibility.     

BYOB as a risk-reduction strategy (RRS) for wine consumers in the Australian on-premise foodservice sector: Exploratory insights

This baseline exploratory study investigated the main drivers of perceived risk of wine consumers in the Australian restaurant environment and the effectiveness of bring-your-own-bottle (BYOB) of wine as a risk-reduction strategy (RRS). The BYOB ‘culture’ is well-established with 22% of respondents reporting they engaged in BYOB the last time they dined out. The main drivers of risk were: ordering a wine that complements the meal (functional); ordering a wine that suits the occasion (functional); choosing wines that will please the dining group (social); fear of being caught driving while intoxicated (physical); and the reputation of the restaurant (functional). Functional risk was by far the most significant risk type, followed by physical and social risk. The risk measurement scale returned a Cronbach alpha of 0.69 indicating the model had acceptable reliability for an exploratory study. In testing the relationship between risk types and using BYOB as a RRS significant correlations exist between functional risk and engaging in BYOB when celebrating a special occasion (H₂); social risk to bring wines that please the dining group (H₃); financial risk to combat high prices on wine lists (H₄); and time risk to avoid the inconvenience and time spent on selecting, ordering and waiting for a wine to be fetched and opened (H₅). These findings suggest that BYOB should be recognised as a RRS in its own right.     

Examining the Impact of Restaurant Innovativeness on Relationship Quality in Luxury Restaurants

ABSTRACT

Despite the importance of innovation as a determinant for the success of restaurant businesses, little research has been conducted on the postconsumption evaluations of the image of restaurant innovativeness as perceived by the customer. In order to fill this important gap in the literature, the purpose of this study is to examine the perception of restaurant innovativeness and the effect of this construct on relationship quality. Based on a review of the literature, a conceptual model was developed hypothesizing the effects of the overall image of restaurant innovation on three determinant attributes of relationship quality: trust, commitment, and satisfaction. The model was then tested using data collected from 398 luxury restaurant patrons. The results of data indicate that the overall image of restaurant innovativeness is positively related to relationship quality in the luxury restaurant setting. The theoretical and practical implications of these results are considered.     

Food safety in restaurants: The consumer perspective

The study aimed to reveal the indicators that consumers in Mainland China employ to evaluate food safety level of restaurants and find how the use of them varies across consumer subgroups. A national survey was carried out and 1076 respondents completed questionnaires which consisted of 33 questions. The results showed that the consumers preferred to assess a restaurant’s food safety level based on “sensory perception of food” and “restaurant environment”. Although official inspection certificate is one of the reliable indicators, the consumers seldom use it. Furthermore, consumers from different subgroups used different indicators. The females were much more finicky – they employed more indicators to protect them from unsafe restaurants. These results demonstrated a need for better education to create discerning consumers to expel those that fail to deliver safe food. Restaurants can rely on the results to develop effective marketing communication to match the consumers’ decision attributes.     

Are better-connected CEOs more socially responsible? Evidence from the U.S. restaurant industry

Extensive research has documented how corporate social responsibility (CSR) outcomes are determined by CEOs' intrinsic characteristics, while their social network status has been under-researched. Building on impression management theory and resource-based theory, the current study analyzes the association between CSR activities and top management's position in the social hierarchy, i.e., network centrality. The heterogeneous effects across different restaurant and CSR types are examined based on stakeholder theory. Using a panel dataset of publicly traded U.S. restaurant companies and a novel dataset of CEO network centrality, we find that firms with highly connected CEOs are involved in more socially responsible activities. In addition, the marginal effect of network centrality on CSR is stronger for fast-food than for full-service restaurants and more prominent for external than internal stakeholder subcategories. The results advance the determinant analysis of CSR and provide managerial implications for CEO selection and policy suggestions on CSR promotion.     

HARNESSING ROMANCE: The effect of exposure to romance-themed attractions on tourists’ impulsive buying

Storytelling is considered an effective way to promote a tourist attraction. Developing a strong theme for stories is beneficial to the persuasiveness of storytelling. In the current research, we explore the effect of a pervasive but understudied theme of storytelling in tourism practice—romance—on tourists' propensity to engage in impulsive buying. In three experimental studies and an implicit association test (a pilot study), we show that exposure to romance-themed tourist attractions spontaneously activates a lay belief in tourists’ minds that “romance is uncontrollable,” and this lay belief elicits a perception of inability to exercise personal control, which leads to an increased propensity for impulsive buying. This effect is mitigated when the color red is salient in themed materials. We discuss the practical implications of our findings for the design and promotion of tourist attractions.     

How a crowded restaurant affects consumers’ attribution behavior

This study finds that when consumers perceive a restaurant as very crowded, they would attribute the high level of crowdedness to high food quality, good reputation and low food price that draw people to the restaurant. On the contrary, in the case of a quiet restaurant, the customer would associate the quietness with low food quality, high food price and poor reputation. The implication for restaurant managers is that they can manipulate the level of crowdedness in their restaurant to create a favorable impression of high food quality, low food price and good reputation.     

Hedonic adaptation and satiation: Understanding switching behavior in the restaurant industry

The role of satiation as a determinant of restaurant patronage has been the subject of increasing research attention. The purpose of this research is to further consider the relationship between satiation and switching behavior in the restaurant industry. Specifically, we seek to address the mediating mechanism of service quality in this framework. Based on the related tenets of diminishing marginal utility and hedonic adaptation, we propose that satiation and service quality are inversely related. The results of an empirical analysis confirm that as consumers become satiated with food, atmosphere, and restaurant service, perceptions of these three facets of overall service quality are diminished, leading to decreased satisfaction and switching intentions. In addition to the practical implications of these results, the finding that satiation directly impacts service quality represents an important step in the overall task of understanding the effects of satiation in determining restaurant patronage behavior.     

Positive and Negative Word of Mouth about Restaurants: Exploring the Asymmetric Impact of the Performance of Attributes

This study examines the relationship between attribute performance of a restaurant and customers' positive and negative word of mouth (WOM). We present an analysis of 168,262 customer reviews, which consist of an overall rating of a dining experience, ratings of food, physical environment and employee service, and real expenditure for a meal, totally covering 1,542 Chinese restaurants on a restaurant guide website. The results indicate that the performance of attributes has an asymmetric impact on positive and negative WOM for the restaurant industry as well as for low-end and mid-to-high-end restaurants. Our results also show that, in most cases, there is a combined effect of two attributes on both positive and negative WOM.     

The relationships among overall quick-casual restaurant image,perceived value,customer satisfaction,and behavioral intentions

The purpose of this research is to explain the relationships among overall quick-casual restaurant image, perceived value, customer satisfaction, and behavioral intentions in the quick-casual restaurant industry. The findings indicate that overall quick-casual restaurant image significantly influences perceived value, and overall quick-casual restaurant image and perceived value had a significant role in influencing customer satisfaction. Additionally, overall quick-casual restaurant image, perceived value, and customer satisfaction are significant predictors of customers’ behavioral intentions. Finally, customer satisfaction can act as a partial mediator in the relationship between overall quick-casual restaurant image/perceived value and behavioral intentions. Furthermore, we discuss the theoretical and managerial implications of the findings and future research ideas.     

Firm growth patterns: Examining the associations with firm size and internationalization

Understanding the growth patterns of an industry is essential for establishing sustainable growth strategies. However, until recently little had been known about restaurant firm growth patterns. Thus, this study examined the growth patterns of restaurant firms in association with firm size class and internationalization, after controlling for total and long-term debt leverage, retained earnings, and growth opportunity. Overall, the results of this study showed that small restaurant firms grow faster than large restaurant firms but the growth rate decreases as firm size increases. Furthermore, the growth rate of large firms decreased more slowly than small firms. In terms of internationalization, this study found that as firm size increases, the growth rate of small international firms decreases more rapidly than that of small domestic firms. However, the growth rate of large international firms decreases more slowly than that of large domestic firms. These findings indicate the appropriateness of internationalization strategies for large restaurant firms but the inappropriateness of these strategies for small firms. More detailed results and discussion are also provided.     

Geography of taste and local development in Abruzzo (Italy): project to establish a training and research centre for the promotion of enogastronomic culture and tourism

Food is not merely a source of nourishment but also one of survival for human beings. Depending on production methods, food can also become a cultural reference point, an element of regional development and a tourist resource. This occurs with “local” food, representing a model of production and consumption that suggests a strong link with the region in which the food is produced. Over the last few years, the field of geographical studies has seen the rise of a specialised branch – the geography of taste – concerned with the study of links between the production of food, seen as a phenomenon of organisation of production, and the territory of reference. The production of food with these qualitative characteristics engages all five senses, assumes cultural significance and thus represents an element of emotional richness – the “gaze” – capable of being transformed into the tourist attraction defined in this paper as the “taste of geography”. These phenomena have been studied in a region of Italy – Abruzzo – in order to obtain the necessary data to plan a training and research centre for the promotion of enogastronomic culture and tourism.