Issues Facing Success of Indian Restaurants in the UK
Info: 19393 words (78 pages) Dissertation
Published: 8th Oct 2021
Tagged: BusinessFood and Nutrition
EXECUTIVE SUMMARY
Eating out in U.K has become a haute gastronomical adventure with lip smacking results. Curry houses are a British institution, as much a part of the national fabric as the local pub. Surprisingly there are more Indian restaurants in London than in Delhi (Capital of India) (Hemisphere Magazine, 2005). The study was aimed at discovering the various problems that besiege the industry in UK. The dissertation weaves through various problem scenarios and the search to find it solutions.
The three main problems which were discovered through face to face interviews were
- Problem of retaining customer through Service Quality
- Problem of retaining customer due to limited workforce
- Problem of promotion policy: advertising and sales promotion
For these problems two theories of Hospitality marketing were chosen. These two theories i.e. Theory of Service quality and Promotion policy in restaurant industry were taken in conjunction with the fieldwork analysis of the restaurants in London. Problems were then discussed in parallel to the theories. The discussion gave rise to some hypothetical situations which were again tested in further research.
The methodology used in the study was selected after careful consideration of the research question and the limitations. Using the appropriate research tools, an in-depth study was done and it was known that all three problems were not isolated in themselves rather they were well connected. The concept of Service Quality was seen missing extensively in the philosophies of the Restaurateurs.
In a nutshell, it can be mentioned that nearly all problems seem to stem from deficiencies in service quality. However at this point, it should be noted that no single problem can be the main culprit nor a particular solution, a panacea for all ills. It is with this in mind that this study should be viewed.
INTRODUCTION
For the purposes of this research, the term 'Indian food' covers food from the Indian, Bengali and Pakistani traditions. The market includes sales through restaurants, pubs and takeaways. ready meals (both frozen and chilled) sauces & pastes, accompaniments and curry powder.
Present Scenario
The largest ethnic minority group in Britain are Indians (approx 10,000,000 people) (Crown,2004) with over 40% of them (approx 800,000) living in the Capital i.e. London which contribute to 6% of the total population of London (LFC,2004). These facts justify the existence of over 1000 Indian restaurants in UK and 4000 only in London and the South east (Grove International,2004). The survival of these Curry Houses is a blessing for the true Indian food connoisseur. But recently the Indian Food Industry in UK have undergone some major structural changes. With the popping up of Giant restaurants in the Capital like the Cinnamon Club (Westminster), Tamarind (Queen Street) and Zaika (Kensington High Street) in the past couple of years, this has invited the interest of lot of the professional bodies like Time Out Guide, Evening Standards, Daily Telegraph, Financial Times etc. The various reviews (Iqbal Wahab,2004) given by them to the acclaimed Indian restaurants in London speak of their varied interests.
‘Indian food is a £3.2 billion industry in Britain, accounting for two-thirds of all eating out' (Geraldine Bedell, May2004). This modern evolved Indian Cuisine in London has sparkled since the time when Tamarind and Zaika, Indian restaurants in London, were awarded the Michelin star. The famous dish ‘Chicken Tikka Masala' is now an authentic English national dish (Robin Cook,2004) All these facts about this Industry makes it big and at the same time it evolves many prospects and problems in itself.
Importance of Indian Restaurants
In the last half-century, curry has become more traditionally English than English breakfast. Some fitting facts in this milieu are:
- According to Mintel reports, Indian restaurants is £ 1733 million industry in Britain which is more than two third of the total food industry in Britain.(Appendix 1)
- In an exclusive consumer survey commissioned by Mintel, 42% of the respondents stated that Indian/Bengali/Pakistani food was among the types of food that they most enjoyed, up from 38% in 1999. Indian food is most popular with 25-54-year-olds and, in contrast to Chinese food, shows a strong up market bias (Mintel, 05/2004)
- It is one of the biggest industries in Britain employing over 60,000 people (menu2menu, 2005)
- There are over 8500 Indian restaurants in UK and 3500 only in London (Grove International,2004). Indian restaurants are the major players in Brit's ethnic cuisines overshadowing Chinese outlets which are around 7400. (Mintel,2005)
Indian restaurants serves 2.5 millions Brits every week besides David Beckham celebrated after scoring the goal that qualified England for the World Cup, at Manchester's Shimla Pinks, with 'his favorite' chicken korma. Madonna, more and more the Anglophile, has apparently taken to ordering the 'taxi curry takeout' from the Noor Jahan restaurant near her London home in Westbourne Grove (Guardian,2004, Issue 2). Every high street has its Star of India or Taj Mahal. Surprisingly twice as much Indian food is sold in Britain as fish and chips (Economist, 1999) and McDonalds have had to adapt their British menus to include “curry and spice”.
These ubiquitous curry houses are coming up in the world. They are no longer consigned to the ranks of post-pub grub besides there is a gradual growth rate in the Indian restaurant market since 1999. (Appendix 1) Also the fact that Indian restaurants have a strong influence on the retail sector is undeniable. They have provided most of the recipes and are the sole benchmark for authenticity for products like Indian ready meals, sauces, pastes and accompaniments.
UK Food Industry
The food industry in the UK has undergone dramatic change over the last few decades, a phenomenon which has been named "the consumption revolution" [Ritson, C. and R. Hutchins (1991)]. Fragmentation of demand has been coupled with concentration in supply, so that the majority of food expenditure is now channeled through five major supermarket groups [Waterson, M. J. (1995)]. This has posed threats to the small agrifood producer, who is typically unable to meet the volume and consistency of supply requirements of the large retailers. However, opportunities have also arisen: many small producers have successfully targeted niche markets, often through direct marketing or distribution through independent outlets. Their offerings commonly carry the typical characteristics of niche products, in that they possess added value, are differentiated from competitive offerings and charge a premium price. With such characteristics it is possible for small producers to succeed within a highly competitive environment [Phillips, M. (1994)].
However, recent opportunities have also arisen in the food multiple sectors, as supermarket groups show an increasing interest in stocking specialty and value-added food products. This interest stems in part from a desire to improve product range and enhance consumer choice. However, it could also be viewed as a response to public criticisms of the negative social and environmental effects of concentration in food distribution: in particular, the development of centralized distribution systems which mitigate against the use of smaller, local suppliers by food multiple chains. Some supermarket groups in the UK are now attempting to improve links with such suppliers, by, for example, devolving decision-making power to store managers, improving purchasing technology and creating opportunities for buyers and producers to meet and discuss one another's needs [Carter, . Shaw (1993)].
There was a Greek community in Greek Street, London as long ago as 1677 so Greek cuisine is not exactly new to Britain. The influx of Cypriots started in the 1920s and 1930s and they began opening restaurants after the Second World War.
Greek Cypriots tended to settle in Hackney, Palmers Green, Islington and Haringey and Turkish Cypriots in Stoke Newington. Greek Cypriots appeared in Soho in 1930's then Camden Town after the war and then Fulham by the mid 1960s. The main influx of Turkish Cypriots was in the 1960s and by 1971 the Greek Cypriot community had turned its attention to Wood Green, Palmers Green and Turnpike Lane.
Only around one third of the 550 or so Greek restaurants in Britain are in London, most of these being in North and West London. Some 40% of the 150 or so Turkish restaurants are in the capital with a heavy concentration in North London. Turkish cuisine is also well represented in Scotland. One of the earliest Greek restaurants was not in London at all but Georges in St Michael Street, Southampton in 1940, slightly pre-dated by The White Tower in London's West End in 1939. Kalamaras in London W2 opened in 1966 and remains popular today. The most successful of the Turkish restaurants at present is the Efes Group which started in London but is now in several locations throughout the country.
Aims and objectives of the research
The mechanisms of globalization has made the world a `smaller' place and, while this has helped to introduce various cuisines to new regions, it has subsequently resulted in the development of `fusion foods', which has implications for the Indian restaurant market. The image of men behaving badly, gulping downing super-hot curries with several pints of lager, are long gone. Today, a trip out for a curry is a posh affair, with some of the country's top chefs cooking up sophisticated dishes of complexity and variety. (LFC,2004)
With these growing fashion of globalization, there is a huge threat to Indian restaurants which are traditionally managed by the family members. According to the Economist:-
But once trends become clichés they have a way of nose-diving. Open the pages of the "Good Curry Guide", and you will discover that all is not well. According to the guide, last year there were at least 300 closures of Indian restaurants in Britain, compared with just over a hundred openings. Indian restaurants, while still the biggest players in the industry, are losing market share eastern cuisine, such as Thai and Japanese food. (Economist, 2005)
The main aim of the research is:
To assess the major issues that determines the performance and efficiency of the Indian foods/restaurants in UK.
The Objectives are to
- To Assess the Service quality and the Supply Chain Management.
- To Assess the consumer Perception towards Indian Foods and the relevant Marketing Mix to exploit the opportunities
Rationale
Indian Cuisine which the westerners commonly call ‘Curry' is highly popularized by the Indian restaurants in UK. These restaurants which are generally owned by Indians reflect the specialty of every region of India. The spread of curry beyond its home in the sub-continent is inextricably linked to the presence of the British Raj in India. Army personnel and civil servants acquired a taste for spicy food whilst in India and brought their newly found dishes home. Since then spicy Indian dishes are highly liked by the people in UK.
London is a hub of Indian foods and restaurants. With the growing area of specialization and people trying new and creative things in their restaurants in London the problems have started increasing. Problems of not only external environment like increasing competition , strict food and health policies or inflation, etc but also the internal problems which relate to the marketing strategies, sourcing of raw materials or inefficient management, etc.
This study will explore SCM issues with reference to market fragility and market access; purchasing power; purchasing decisions and relationships; understanding of customer needs; barriers and frustrations; and strengths and successes. This report is premised on the belief that supply chains are important for maximizing efficiency. But supply chains are far more important than that: the management of supply chains increasingly influences the nature, scale and participation in enterprise development and sustainability. In other words, supply chains are re-structuring the lines of business development in knowledge-based economies. This study will further high light the consumer perception and the Marketing mix.
Literature Review
2.0 Chapter Overview
As Indian Restaurants are a part of the hospitality industry, this chapter contains the literature taken from the subject of marketing in hospitality industry. Two main theories are used to analyze the three main problems stated in the previous chapters. They are
- Service Quality and Supply Chain
- Promotion Policy: Advertising and Sales promotion
The two theories are then analyzed in light of the problems. A relationship is developed between the industry and theories by researching the trends. These theories are then used for drawing conclusions and recommendations in further chapters. For the reader, this chapter will be the base of understanding the ongoing trends in the Indian Restaurant industry.
2.1 Introduction to Hospitality Marketing in Restaurants
Nowadays marketing isn't simply another function of business rather it's a philosophy, a way of thinking and a way of organizing your business and your mind. The customer is the king (Iverson, 1989). According to Kotler (2000, Ch. 1), satisfying the customer is a priority in most businesses. But all customers cannot be satisfied. There has to be a proper selection of customers which enable the restaurants to meet its objectives.
In the Restaurant industry, many people confuse marketing with advertising and sales promotion. It is not uncommon to hear restaurant managers say that they do not believe in marketing, when they actually mean that they are disappointed with the impact of their advertising. In reality, selling and advertising are only two marketing functions, and often not the most important. As Kotler said in his book, Marketing for Hospitality and Tourism (1996, Chapter-1), advertising and sales are components of the promotional element of the marketing mix. Other marketing mix elements include product, price and distribution. Marketing also includes research, information systems and planning.
The aim of the marketing is to make selling superfluous. The aim is to know and understand customers so well that the product or service fits them and sells itself.(Drucker,1973,p. 64-65) The only way selling and promoting will be effective is if we first define customer targets and needs and then prepare an easily accessible and available value package.
The purpose of a business is to create and maintain profitable customers. Customers are attracted and retained when their need are met. Not only do they return to the same restaurants but they also talk favorably to others about their satisfaction. Customer satisfaction leading to profit is the central goal of Hospitality Marketing.
(Kotler & Bowen & Makens, 1996, Chapter- 1)
Fewer repeat customers and bad words of mouth are deeds of the manager who interprets profits above customer satisfaction. A successful manager will consider profits only as the result of running a business well, rather then its sole purpose. So in this service based industry (Indian restaurants) the entrance of corporate giants with mesmerizing marketing skills have increased the importance of marketing within the industry. Now lest see how far these Hospitality marketing stunts can save the appalling scene in the industry.
2.2 Service Quality
Daryl Wyckoff has defined service quality as, “Quality is the degree of excellence intended, and the control of variability in achieving that excellence, in meeting customers' requirements.” ( Wyckoff, 1984, p 81) This theorem of quality is however not accurate as experts says ‘Quality is whatever the customer says it is and the quality of a particular product or service is whatever the customer perceives it to be' (Powers,2000, p 179). So the main emphasis is on the customer and perceived quality.
A more professional way of looking at quality is by conceptualizing it broadly along the two critical dimensions i.e. technical quality and Interpersonal quality. Technical Quality is generally the minimum expected from a hospitality operation.(Did things go right, Was the food hot) (Powers, 1997). This dimension of quality is relatively objective in nature and is thus measurable.
Interpersonal Quality is a comparatively difficult dimension (Was the waiter friendly? Did the service staff go out of their way to be helpful? Did the customer feel welcome or out of place?) As Gronroos (1980) points out “Even when an excellent solution is achieved, the firm may be unsuccessful, if the excellence in technical quality is counteracted by badly managed buyer-seller interactions.” And vice versa the charm in this world will not make up for bad food or a lost reservation. So each dimension is critical.
2.3 Concept of building customer satisfaction through quality
The fundamental strategic decision to be taken by the Indian Food manufactures at the outset is to consider the service system either standardized or routine/customized. In the former, more importance is given to technical quality, operation goes by the book and little importance is paid to employee's discretion. While the later gives importance to both qualities and more discretion is given to the employee.
Customized system of service is recommended to the restaurants as consumers go to the restaurant that they believe offers the highest customer delivered value or customer satisfaction i.e. the difference between total customer value and total customer cost:
- The customer derives value from the core products, the service delivery system and restaurants image.
- The costs to the customer include money, time, energy and physic costs.
Quality is made up of two components viz. technical and interpersonal. Managers must keep in mind that in the end the customer perceptions of the delivered quality are what is important. Customers assess delivered services against their expectations. If perceived service meets expectations, they view the service as good quality. If perceived service falls short of expectations, they view the service as poor. Expectations are formed by past experiences with the restaurants, word of mouth, the restaurants external communication and publicity.
A widely used model of service quality is known as the five gap model. This model defines service quality as meeting customer expectations. The principle behind the formation of this model was to discover the expectation of the customer which is possibly the most critical step in delivering service quality. This model is closely linked to marketing since it is customer based. This model has five gaps,
Gap 1: Consumer expectations versus Management Perception
Gap 2: Management Perception versus Service Quality Specifications
Gap 3: Service Quality Specifications versus Service Delivery
Gap 4: Service Delivery versus External Communications
Gap 5: Expected Service versus Perceived Service
The detail study of this 5 gap model is out of the boundary of this research. But the question is whether this aspect can solve the issue, can it benefits the industry? The answer is discussed in Chapter 4.
2.4 Supply Chain
Most Important aspect for increasing service Quality performance is Supply Chain Integration. Effective Supply Chain Management can:-
- Cut Down The Total Cost Significantly.
- Increase the productivity and Performance.
- Improve time and labour economy.
- Can differentiate Service quality.
- Can provide optimum Speed and comfort in quality Service delivery.
In other words it provides better economy of scale and competitive advantage.
The Value Chain
Source: Johnshon and Scholes, 2004
The Value Chain will be discussed in the essence of the Supply Chain Management Issues.
These elements of a brand are illustrated in 1.
It has long been recognized that products have meanings for consumers beyond providing mere functional utility. Symbolic consumption was recognized by Veblen (1899) in his Theory of the Leisure Class and termed conspicuous consumption. Noth (1988) quotes Karl Marx and his metaphor of “the language of commodities” in which “the linen conveys its thoughts” (p. 175) while Barthes (1964) discussed a semiotic threshold with the semiotic existing above the “utilitarian or functional aspects” of objects.
Given the symbolic usage of brands it is no surprise that semiotics, as the study of signs in society, is increasingly being used in understanding consumer behavior. Initially used in facilitating understanding of the consumption behavior surrounding cultural products such as film and other works of art (Holbrook and Grayson, 1986) and fashion (Barthes, 1983), its widespread usage to interpret symbolic consumption in all aspects of consumer behavior is anticipated (Mick, 1986).
The theory behind this research technique is that brand equity is built on consumers perception of the emotional benefits or brand affinity, combined with physical or
Concrete benefits - The performance delivered by the product or service offered. The technique attempts to evaluate each of these two aspects in detail, providing a clear understating of its importance for the category under investigation as well as for the brands in that category.
During the development of this technique we identified and coded the emotional factor that repeatedly appeared in all markets in the study, allowing us to conclude that
They are valid for virtually any product or service category when the subject is brand equity evaluation. These aspects can be classified into three groups: brand authority, level of identification that the user or consumer has with its positioning, and level of social approval it offers to its user or consumer.
Authority - might be defined by the brand's heritage or long-standing reputation and leadership, by the trust or confidence it inspires to consumers, and by aspects associated to innovation or technological development as perceived by consumers.
Thus all the branding theories leads to the consumers' Perception.
3.2 Consumer Perceptions Of Foods
Investigation and analysis of food purchase and consumption is well-documented within the discipline of consumer behavior. Studies in this area tend to stress the complexity of factors which drive food-related tastes and preferences, and some authors have proposed models which attempt to categories and integrate these factors and so offer insights into the formation of food preferences and choices. Shepherd. R, (1989) provides a review of such models, from Yudkin, J. (1956), which lists physical, social and physiological factors, to Booth and Shepherd (1988) which summarizes the processes influencing, and resulting from food acceptance, and lists factors relating to the food, the individual and the environment. However, none of these models incorporate a consideration of the role of place in food, and consumer perceptions of this attribute.
It may be noted that, by their very nature, food products have a land-based geographical origin (Bérard, L. and P. Marchenay 1995), which would suggest that people readily make strong associations between certain foods and geographical locations. On the other hand, the process of "delocalization" of the food system in the twentieth century, as described by Montanari , (1994) has weakened the traditional territorial and symbolic links between foods and places. The inference is that the concept of Indianity in foods may no longer be important or attractive to the modern food consumer, who is faced with such a wide array of exotic and international products all year round. Thus it may be that in the mind of the consumer, specific names, production methods or presentational forms of particular foods are no longer associated with the geographic areas from which they originate. An opposing view is taken by Driver, (1983) however, who describes resurgence in the interest in traditional Indian dishes in the UK, which perhaps reflects the symbolic importance that particular foods have in our lives and culture. These debates highlight the need for empirical investigation of people's perceptions and understandings of Indianity in food. Linked to this debate of the perceived meaning of Indianity in foods is the concept of authenticity. If Indian foods are linked in some way to "origins" and "tradition", it implies that producers of Indian foods are involved in providing and communicating intangible attributes of heritage, tradition and authenticity in their product offerings. These require careful management, particularly in view of authors such as MacCannell [1989], Hughes, (1995) and Urry, (1995), who, in relation primarily to tourist experiences, point out the difficulty in defining what is authentic, and in communicating this to an increasingly sophisticated and diverse audience of consumers. In relation to Indian foods, information is needed on consumer perceptions of appropriate attributes of products, which are the most attractive and why.
METHODOLOGY A-RESEARCH PHILOSOPHY & APPROACH
In the previous chapters, author has outlined research aim and objectives with examining the relevant literature review. However, the successful completion of any study is heavily dependent on the choice of an appropriate research method and approach. Moreover, the appropriate research methodology provides guidance for the development and evaluation process of study. Wit the appropriate methodology the author can justify the achievement of the objective.
Research process
The research process adopted is based on exploratory approach, but prior to that it is necessary to highlight upon the methodological frame work.
The recognized exponents in this field are Hussey & Hussey (1997), Zikmund (2000), Saunders et al (1997, 2000) and others who presented different methodological framework from which researchers can conduct their research. Most of these frameworks follow certain similar central theme. The author has adapted the below-illustrated methodological framework to fulfill the research aim and objectives. This is chosen, as it supports the author research design and process, Furthermore, methodology has been designed where data is collected and interpreted. The findings and analysis with conclusions and recommendations at the end follow this.
METHODOLOGY
Research Philosophy
Easterby-Smith et al (1993) states three reasons why it is useful to state the research philosophy about proposed research before collecting data:
- To clarify the research design-the method by which data is collected and analyzed-taking a holistic view of overall configuration.
- To help recognize which designs will work and which will not
- To help identify and create research design to adopt research approach according to the required research aim and objectives.
There are two main types of research philosophies in existing literature. They are Positivism and Phenomenological. “They are different, if not mutually exclusive, views about the way in which knowledge is developed and judged as being acceptable. They have an important part to play in business and management research”. (Saunders et al, 2005, p 83) The positivistic philosophy which “seeks the facts or causes of social phenomena”(Hussey & Hussey,1998) is more objective, analytical and structured and the researcher is independent of the subject. (Remenyi et al., 1998:33). In addition, the quantitative data should be collected and statistical analyzed when test the certain theories.(Saunders et al, 2005, Hussey & Hussey,1998)
On the other hand phenomenological philosophy which “understanding human behavior from the participant's own frame of reference” (Hussey & Hussey, 1998) is more subjective and the researcher is dependent on their mind. Qualitative method can be used such as a case study.
It is important that which philosophy is better for my project. Saunders et al. (2005) state that no philosophy is better than others so choosing philosophy depends on the research question. Having considered the aims of this research project, I will choose phenomenological philosophy because this research question is “How the Supply Chain helps the Indian Food Industry in UK in achieving efficiency and the significance of Consumer perception to the marketing mix”.
The research will be qualitative. In order to answer the research question, I would do case study on Chinese and UK textile and clothing firms and collect data by using interviews.
Research Approach
Inductive or Deductive Research
Undoubtedly the research approach is very important for the project. There are two research approaches, which is the deductive approach and the inductive approach.
As mentioned in Saunders et al (2000), the major differences between the deductive and inductive approaches to research are as follows:
Deduction emphasis
Induction emphasis
Scientific principles
Gaming an understanding of the meaning humans attach to events
The need to explain cause and effect relationship between variables
A close understanding of the research context
The collection of quantitative data
The collection of qualitative data
The application of controls to ensure clarity of definition and highly structured
A more flexible structure to permit changes of research emphasis as the research progress
Researchers independence of what is being researched
A realization that the researchers is a part of research progress
The necessity to select sample of sufficient size in order to generalize conclusion
Less concerned with the need to generalize
Deductive approach aims to develop a theory and or hypothesis and design a research strategy to test it. Deductive approach is a rigid methodology, which not permits alternative explanation. It emphasizes on scientific principles and moving from theory to data. It is a highly structured approach and need more operationalisation of concepts to ensure definition. Oppositely inductive approach is which the researcher would collect data and develop a theory as a result of data analysis. It is an alternative approach and theory building followed data collection. In addition, it is the better way to study the small sample because of concerning with the context in which the events are taking place. (Saunders et al, 2005, p 85) Easterby-Smith et al. (2004) state that if the researcher have interested in understanding why something happening the inductive approach is more appropriate. Having considered the aims of this research project, it seems that inductive approach is more suitable. Firstly, according to Saunders et al (2005), inductive approach is closely related to phenomenology. Secondly, although there are many author contributed to theories about international branding but not specific in an industry or a country.
Scientific approach
Scientific approaches can be divided according to the type of knowledge of reality that the study aims to produce. There are three main approaches to choose from which are exploratory, descriptive and explanatory. Often a combination of these approaches is used in order to carry out a complete study. However, this research is an exploratory research. It combines both secondary and primary research, using quantitative and qualitative tools of data collection. The findings from both the primary and secondary research later is combined and analyzed to produce the information that is required to achieve the research aim and objectives.
Exploratory, Descriptive, or Explanatory Research Approach
Research design is “more than simply the methods by which are collected and analyzed. It is the overall configuration of a piece of research: what kind of evidence is gathered and from where and how such evidence is interpreted in order to provide good answers to the basic research question”. (Easter-Smith et al., 2004, 191:21)
According to different purpose it can be classified exploratory, descriptive, and explanatory. Exploratory research is conducted into a research problem or issue when there are very few or no earlier studies to which we can refer for information about the issue or problem (Robson, 2004:59). It is very useful research if the researcher wants to clarify understanding of a problem. This research aims to assess how to assess the major issues that determines the performance and efficiency of the Indian foods/restaurants in UK. Therefore, this research will be an exploratory research.
Quantitative or Qualitative Research
Research methodology
In order to extract meaningful information, the author has used both quantitative and qualitative data collection techniques. Both approaches have major differences between them as shown in table below.
Differences between quantitative and qualitative
Qualitative
Quantitative
Concerned with understanding behavior from actors' own frames of reference
Seek the facts/ causes of social phenomena
Naturalistic and uncontrolled observation
Obtrusive and controlled measurement
Subjective
Objective
Close to the data: the 'insider' perspective
Removed from the data: the 'outsider' perspective
Grounded discovery-oriented, exploratory, expansionist, descriptive, inductive
Ungrounded, verification oriented, reductionist, hypothetico-deductive
Process-oriented
Outcome-oriented
Valid: real, rich, deep data
Reliable: hard and replicable data
Ungeneralisable: single case studies
Generalisable: multiple case studies
Holistic
Particularistic
Assume a dynamic reality
Assume a stable reality
Source- Oakley, 1999
However, there are some similarities between qualitative and quantitative data:
- Quantitative data predominantly used for testing theory, can be used for exploring an area and generating hypotheses and theory
- Qualitative research can be used for testing hypotheses and theories, even though mostly used for theory generation
- Quantitative approaches can collect qualitative data through open-ended questions
Moreover, there are two kinds of data required for any research, which are primary and secondary data.
But due to unavoidable circumstances the author could not conduct Primary research. Hence this study is totally based on secondary Research using secondary data.
Research Strategy
According to Robson (1993), there are three research strategies: Experiment, Survey, and Case study. A good research strategy should be appropriate for the particular research questions and objectives. (Saunders et al. 2000) By analyzing this research question and objectives, I think “case study” is suitable for this project.
Case Study
The case study focuses on understanding the dynamics present within single setting, obtaining in-depth knowledge through the detailed information analysis. (Hussey and Hussey, 1997) As Perry (1998) points out, realism is the most appropriate paradigm for case study research, since case study research areas are usually contemporary and preparadigmatic, but allow for some researcher objectivity. It would have been possible to construct an interview to test whether managers considered the issues outlined above, but this would have had the potential risk of putting words into their mouths. I needed to understand issues which they saw as important both at the time of the expansion and subsequently, and to get them to talk about the process which they underwent, rather than to test the degree to which they shared our conceptual understanding of issues from the literature. ``The essence of a case study, the central tendency among all types of case study, is that it tries to illuminate a decision or set of decisions: why they were taken, how they were implemented, and with what result'' (Yin, 1994, p. 12). The region chosen for study was UK. Some significant players are chosen from the food industry using large Industrial database that is available from various secondary sources.
Data collection
Secondary Data Collection
Secondary data Survey has mainly two functions:
1. It was the starting point of the research process, providing the initial framework within which the researchers worked.
2. Secondary data provided s and complemented the primary data collected by the researchers during interviews.
In establishing the general context, desk research will be undertaken by presenting the views of renowned writers and researchers of the field. The literature review will not just place the research project into a theoretical perspective, but it will also familiarize the reader with research topic. Secondary research is useful as it generates an understanding regarding the most suitable methods and data that should be collected from the primary research in regard to the research aim and objectives. In addition, secondary data help the researcher to analyze and understand the primary data.
Advantages of secondary data are that it saves enormous time and money. By reviewing the previous literature, the researcher can formulate and understand the research problem and enables the drawing of useful and understandable conclusions. Moreover, secondary data can be used as a comparison instrument, which simplifies the understanding of the relevant primary data.
However, there are several disadvantages associated with secondary data as well. Firstly, data collected from another study to achieve different objectives may not be suitable for the objectives of author's research. Moreover, reliability and validity of the data can be questioned due to the contemporary nature of research topic.
Secondary data includes both quantitative and qualitative data can be used in both descriptive and exploratory research. There are researchers such as Bryman, 1989; Dale et al, 1988; Hakim, 1982; Robson, 1993: those who have classified secondary data in three subgroups. These subgroups are documentary data, survey based data, and that complies from multiple sources.
Documentary data
This is often used in research projects that also use primary data collection. "Research based almost exclusively on documentary secondary data is termed as archival research and although this term historical connotations, it can refer recent as well as historical documents"(Bryman,1982)
Survey based secondary data
"Survey based data secondary data refers usually to data collected by the questionnaires, the data that can refer to organizations, people or households" ( Halkim, 1982)
This type of data can be available in adequate detail. This helps in a way that it provides the main set of data, which helps to answer the research questions, and also helps to accomplish main objectives.
Multi-source secondary data
This type of data is based on completely on documentary or on survey data or can be an amalgam of the two.
One of the most dynamic sources that are available is 'computerized database'. World-wide access to database and networks has completely changed everything in the sense that it has completely changed the mentality in which we use to view the conventional way of library research. These types of data are so comprehensive that they cover not only the current periodicals and newspapers but also statistics data.
The main secondary data source will be the World Wide Web. Particularly the specialized web portals in business sector provide information on clothing industry, however, there are risks of gaining information from Internet, such as the reliability of the author or the organization and the accuracy of the data or the data of the information. To avoid the risk I will make sure the name, occupation, title, education, and experience of author. The other secondary data sources will be the university library there are a number of key texts individually regarding to branding. Journals such as International Small Business Journal, Harvard Business Review and Brand week will be looked at as sources of secondary data. These data can provide useful resource to answer or begin to answer the research question.
Data Analysis
The main data in this project is qualitative data. According to Saunders (et al, 2005), there are four steps of analyzing qualitative data. They are: categorization, “unitizing” data, recognizing relationships and developing the categories you are using to facilitate this and developing and testing hypotheses to reach conclusions.
Evaluating the data analysis
Quality of research
Gill and Johnson (1992) states that in order to have an appropriate research methodology, validity and reliability of any information is very important. To understand validity, the findings must reflect true facts or events. Reliability can be understood by seeing the results that will be found on different occasions and can be improved by reducing errors and by introducing common structure in data collection.
A research has to obtain a certain quality level before it can be of any use for the reader. A below standard research can provide the reader with false conclusions to the research aim in hand. Thus, below author provides issues that help the reader to determine quality level of dissertation.
Validity
Validity determines whether or not the research has been able to measure what it is supposed to measure.
Firstly, it evaluates how well the results of a study match the actual reality. The author has used a vast amount of information sources to prove the authenticity. The author has collected material from many different source books, articles and WebPages. Author has also conducted interviews where the respondents have confirmed the reliability of author's finding. The information gathered from various sources was found to be consistent with the reality and this reality indicates a strong internal validity.
It further evaluates to what extent the results from a study can be applied to other situations. The last but not the least, it evaluates whether or not the researcher has used appropriate techniques and measures in the study, and if there has been an objectivivity of judgment when collecting data. Author has chosen theories that best suits the needs of the topic.
The accuracy can be trusted since, the author has no personal gain except academic interest, and hence subjectivity is avoided.
Reliability
Reliability refers to extend to which the outcome of this dissertation can be replicated by another researchers. A highly reliable study would be the one where other researchers using the same methodology would get the same findings. There are many things that can affect the reliability of the findings, for example: collection of unreliable secondary data and improper implementation of the chosen theories.
Author has taken many measures to ensure the reliability of this dissertation. Important secondary information has been collected from more than one source before it can be used.
FINDINGS AND ANALYSIS
An Overview of UK Market With Reference To Indian Foods
According to Market Review, 2004, “The UK catering market involves food and drink eaten outside the home at catering sites and establishments. Annual sales in 1999 came to 41.57bn, an increase of 3.9% on the 1998 total. The largest sector of the market, measured by sales turnover, is public houses (33.1% value share), followed by hotels (18.4%), restaurants (17.4%) and fast food or takeaways (16.8%). Other market sectors are contract catering (7.2%), and catering at licensed clubs, holiday camps, holiday villages, caravan and camping sites (7%)”. The Office of National Statistics estimated the total income generated in 2000 from catering services i.e., all meals eaten outside the home, to be £56bn (Ernst & Young Feb 2000)
There are over 23,000 ethnic food outlets (including both takeaways and eat in) in the UK. Mintel estimates that there are 12,000 Chinese and 8,300 Indian outlets with a total market value for ethnic food catering outlets forecast to be worth £3,146 million by the end of 1999.
According to Patak's, 58% of the UK population eat in Indian restaurants but only 37% prepare Indian food at home. Home cooking of ethnic food has created a market for cooking sauces and accompaniments. Authentic produce is now more readily available and improved choice can be most clearly seen with fruit and vegetables, where the growth of long haul air freight has resulted in a profusion of fresh produce on supermarket shelves(Grocer, 2000).
The ethnic foods and rice market for distribution, not involving restaurants and takeaways, has grown more rapidly than the market as a whole. Sales rising by 29% to £848 million between 1996 and 2000. This market is in a growth phase with many new products being well received by consumers and increasing the market rather than cannibalizing the sale of established brands (Market Plus, 2001).
Home meal replacement (HMR) is a relatively new food retail phenomenon. These are foods cooked or prepared at the hot deli counter of supermarkets for home consumption. This market segment was worth approximately £200 million in 1999 showing phenomenal growth with an increase of 66.7% on the value of this market in 1998(Reporter 2005). HMR competes directly with the family run Indian and Chinese takeaways, there being no established High Street brand for these cuisines as is the case with pizzas, fried chicken or burgers. Table 1 provides a breakdown of food by cuisine type.
Table 1: The UK Market for Ethnic Food by Sector by Value 8
source: Market Plus, 2001
Marks & Spencer are thought to be the largest retailer of ready meals, commanding 45% in terms of value in 1998 followed by J Sainsbury at 23%, Tesco at 17% and ASDA at 5%( Geest Research, 2000). Within the non-Marks & Spencer sector, shown below, J Sainsbury accounts for a third of chilled ready meals sales. In 1998 it was dominant in all the cuisine types except Chinese. Authoritative research on this sector appears every four or five years. These s are the latest available. Ready meals are the largest segment of the above market. Cooking sauces, sauce accompaniments, marinades and snacks make up a fragmented part of this sector (see Table).
Table 2: The UK Market for Indian and Chinese Food by Type by Value
Source: Market Plus 2001
There are four major players in the ethnic ready meals sector with predominantly ethnic minority ownership. S & A Foods Ltd, manufacturers mainly Indian food but is attempting to diversify. Tilda imports, processes, packs and distributes rice and manufactures cooking sauces. Sco-Fro Foods Ltd manufactures Chinese food and ready meals. W T Foods manufactures and distributes a wide a range of ethnic foods though 70% of their sales turnover comes from the manufacture of Indian ready meals. In addition to the manufacturers of ethnic foods, there are a number of other organizations contributing to the ethnic food industry. Food ingredient companies, for instance, including produce and meat suppliers and importers play a key role in supplying primary ingredients. Significant proportions of ingredients, spices and vegetables in particular, are sourced overseas. In some cases, food manufacturers may take the decision to purchase directly, but it is more often the case that agents or brokers are used. Food manufacturing is a processing sector requiring appropriate machinery. While for the ethnic food market many of the needs may be compatible with standard technology, there are some areas that defer and specialist equipment is necessary or mainstream equipment is adapted to create authentic results.
The Supply Chain Management Case Studies
The First Objective is to “To Assess the Service quality and the Supply Chain Management”. The quality and efficiency of the service depends largely on the Supply Chain Management. Since the study is wholly based on the document based research, the author has used the case study approach to analyze and assess the supply Chain of six Indian Companies. The Information regarding the companies is taken from Data base of the Knowledge Centre For Black & Minority Ethnic Businesses, 2005
A brief description of the companies is presented below. Importantly, because of the confidentiality the data base has not revealed the names of companies and individuals.
Case Facts- The Profiles:
Company 1
The company is based in West London within quarter of a mile from its major customer, Company 2. It receives poultry purchased by Company 2 and dices it to specification for particular Indian ready meals. It purchases vegetables from Company 1 for preparation and dicing. Just-in-time deliveries are made to Company 2 where ready meals and frozen meals are manufactured and packaged for sale to major supermarkets. Its sales turnover is in the region of £6 million and it employs a total of 200 staff working in two eight-hour production shifts and a cleaning shift.
Nearly 80-85% of the company's sales turnover comes from Company 2 and the balance of sales is directly connected to companies with strong historical and commercial links with Company 2. In effect the company can be considered to have a single customer.
Salmonella is an ever-present danger in food manufacturing and poultry dicing poses the highest contamination risk. For Company 2, the separation of poultry processing from the main cooking process is vital. Company 2 conducts quality checks on poultry that it purchases from Holland and delivers it to Company 1 for dicing. This process involves water jet cutting technology, imported from the USA at a cost in excess of £1 million. The diced poultry is then transported in chilled transport on a just-in-time basis to maintain a minimum of poultry stock at Company 2 and thus reduce contamination risk.
Company 2
This company has three factories and has more than 700 employees producing in excess of 200,000 ambient and frozen meals every day for four of the large supermarkets groups. Sales turnover is currently in the region of £80 million. Frozen ready meals, being a small percentage of total production, are exported to 16 countries under the company's own brand.
The company has been through several cycles of financial restructuring to enable its rapid growth. It is currently the major contributor, (80%), of both sales turnover and profit as part of a larger food group with six other companies. The group was launched on the stock exchange in January 1999.
Dissatisfied with share performance on the stock exchange, a management buyout was arranged in partnership with an investment company in November 2001. A new Managing Director takes over from the founder in September 2005.
Co-packing is the term used in the industry whereby a tried and trusted supplier is responsible for production of niche products made by another company. The co-packer is assisted with plant design, quality assurance and health and safety accreditation and monitored regularly. The Snacks Co-Packer to Company 2 and Company 3 act as co-packers for finger foods, chutneys and sauces. Company 3 also fries onions to specification in large
Quantities, called “waghar”, this being the starting process before spices are added in preparation for cooking most Indian dishes. Company 2 was in this position till 1999 when all products were sold through a “marketing company” who were insured against negligence risks and could guarantee quality and consistency. Indeed the company won the right to have its logo displayed on the supermarket's packaging as a mark of quality and authenticity which is unheard of in the industry.
Company 3
Established in 1973, the company employs in excess of 100 people. It manufactures branded Indian sweets and savoury snacks to distribute these through 40 franchises in the UK and exports to France and Germany. This was the company's main activity for many years but now accounts for just 30% of sales turnover, having diversified into flight catering, partial production processes for Company 2 and selling its own brand products to large supermarkets. For Company 2, the company fries onions in bulk to specification, and manufactures sweets and sauces as a co-packer for sale, through Company 2 to the supermarkets. In addition it has a flight kitchen for sub-contract production of Indian ready meals supplied to Gate Gourmet for British Airways and to LSG Skychef and Alpha Flight Services for supply to Air India, Kuwait Airways and Virgin. It also manufactures Indian desserts and Indian ice cream, kulfi, for sale to restaurants. The company has a sales turnover in the region of £8 million and employs in excess of 100 employees. The company has the ethos of a family firm and has developed through organic growth.
Company 4
The company is a wholesale trader in vegetables based at the Western International Market in Southall and in a wholesale outlet in the Birmingham City Council Market. It has the same ownership as Company 1. Company 2 was under pressure from the supermarket groups to reduce prices. With six years experience of purchasing large quantities of vegetables for dicing, the owners decided that they were in a position to become wholesale traders in vegetables and thereby reduce the cost to Company 2 by cutting out at least one layer in the supply chain. The company sales turnover was not disclosed. It employs 17 people. Vegetables are purchased daily based upon orders faxed the previous night from Company 2 and, to a lesser extent, Company 3.
This demand allows the company to obtain better prices from growers and their agents and can supply to the catering market in general in Southall and Birmingham at higher profit margins. Products left over at the end of trading go directly to Company 1 for processing by machine and by hand for just-in-time delivery to its two main customers throughout the day.
Company 5
The company is based at a port facility in Kent. It is one of the UK's largest volume suppliers of rice to the grocery trade supplying branded and retailer own-label products. The owner established the company in 1987 after a successful business career in Malawi. It has rice-processing plants in India, Pakistan and the UK. It imports from eight countries and exports to 50 countries. The plant in the UK is required because the European community imposes a punitive tax on white rice to encourage European processing of imported rice. Brown rice is hulled and impurities removed before packaging in catering packs, any one of nine products in its main brand and two further specialist brands or as specified by the supermarkets for own-brand distribution.
Supply Chain Management: Case Findings
Company 1
Customer Relationships
Company 1's relationship with Company 2 is close and based on trust. When Company 2 is undertaking new product development (NPD) using vegetables, Company 1 provides free samples and conducts experiments with machine cutting and hand preparation of vegetables in bulk to arrive at a price that offers a win-win position for both parties. Company 1 maintains that it supplies vegetables from its sister company, Company 4, at cost. Payment for both diced vegetables and the poultry dicing service is always within seven days.
Company 1 was at one time under closer scrutiny regarding the prices of vegetables purchased from Company 4 when Company 2 set up a procurement department. The Procurement Officer of Company 2 urged Company 1 to seek a diverse customer base in order to minimize risk for all three companies.
A new Managing Director at Company 2 indicates that payment to major suppliers will soon be made within 30 days, that each dish will be priced using cost accounting techniques, that single sourcing poses a significant risk for Company 2 and its suppliers and that contracting should become the norm. The Director comments on the dangers posed by reliance on a single large customer: “I am mentally prepared for this. I trust that though I have put all my eggs in one basket, Allah will look after me”.
Supplier Relationships
Company 1 purchases all its vegetables from Company 4, a family firm, at cost, relying on it to source the appropriate quality for the needs of Company 2 and at the best market price. Poultry is purchased by Company 2 and sent to Company 1 for dicing.
Supply Chain & Procurement Management
This is not a significant issue for Company 1.
Collaborative Partnerships
Company 2 has previously assisted with signposting and advice to bring the company to an expected and contractual level of hygiene risk management accreditation and to assist just-in-time delivery of product. Company 1 and Company 2 collaborate on NPD, creating supply specifications for each dish and the daily contact between the companies at all levels of management has created a climate of mutual support.
Warehousing & Logistics
The company has its own warehousing and logistics operation. Outsourcing would add a further element of risk to the operation. Located so near its main customer makes the need for out-sourced logistics unnecessary. Deliveries of finished products are made two to three times a day.
Technology - Production Processes & Software
The company employs 200 staff. Vegetable processing is labour intensive, although a combination of machine processing and hand labour is used for this. Poultry dicing is automated using two state-of-the-art US-made dicing machines. This equipment cuts using powerful water jets and uses camera equipment to obtain precise cut and dice-size control. Production planning is done using Excel spreadsheets and the company considers this adequate for their purposes. They use the Internet to research new processes and fax machines to obtain orders for the next day.
Company 2
Customer Relationships
The founder was the de facto marketing department of the company. The largest supermarket customer accounts for more than 70% of sales turnover and the second ranked customer 15%. The pressure on production capacity means that the company has to actively seek new customers in fits and starts to take up spare capacity on the rare occasions that this is necessary. A dedicated marketing function, in-store product demonstrations notwithstanding, has never existed. A small team of Operations Directors and the Executive Chef act as account executives besides their core duties. Relationships with customers are close and exist in a spirit of partnership. Customer contact exists at every management level of the company with closer working partnerships on NPD, promotion, quality assurance and production process accreditation. The company has in the past organized fact-finding missions to India, commissioned market research on customer preferences in Indian restaurants and closely monitors the sales volume of each of its products, analyzing these against several criteria.
In the unlikely event that its main customer manages to purchase the Safeway supermarket group, opportunities for growth may be considerable, or alternatively, the suppliers of Safeway may pose a significant threat to the company.
Supplier Relationships
The company replicates the partnership ethos with its suppliers. It plays a nurturing and facilitating role with suppliers, passing on quality and process improvement requirements throughout its supply chain as recommended by its main customers to minimize risks. Select suppliers are paid within seven days and single sourcing has been common. Payment periods are about to increase to 30 days and supply contracts are being introduced.
Supply Chain & Procurement Management
A Procurement Officer has recently been appointed. He has so far completed a review of all suppliers and begun an extended programme of establishing supplier contracts and due diligence processes. He has a target of splitting the supply for each product 75/25 to avoid the risks of single sourcing. He visits exhibitions, uses the Internet to source suppliers and compare prices and uses an Electronic Data Interchange (EDI) system to forecast volumes in
order to obtain the best prices and services from his suppliers. The company forecasts demand, aggregates families of ingredients and processes and standardizes ingredients wherever possible with continuous checking of quality and tolerances. Strategic supply chain planning and management is the next step in the evolution this business process.
Collaborative Partnerships
Quality control, automation of supply chain processes, accreditation and risk management have all been introduced to world class standards through recommendation from the major customer. This has involved an increase in office based and supervisory processes and has minimized risks at all levels. The company shares forecast data with its suppliers on a need-to-know basis in order to obtain the best prices and agreed quality. The company acts as a
“buying co-operative” establishing a price base line for both large and small concerns within the group and its close associate suppliers. For large capital purchases, the company is part of a “buying group” serving all the companies that are part of the investment company's portfolio.
Warehousing & Logistics
The company has minimal third party warehousing and no need to contract out its small logistics operation. All suppliers deliver and all customers collect.
Technology - Production Processes & Software
The company uses Bratt Pans, Unitron & Multipond cooking vessels, sauce dispensers and portion dispensing machines. Other apparatus, giant versions of traditional equipment unique to the company, mimic or duplicate authentic home cooking.
Being part of a system of EDI with its customers, the company has automated much of its administration in this regard but it has not been extended to its suppliers. The company uses this software and its business processes for all its forecasting and is about to use pricing software to identify cost effective production for each product. New stock control software is being installed to link to the EDI system.
Company 3
Customer Relationships
The Manager keeps in constant touch with the 40 franchisees through the ordering process and to assist with business advice and promotions. He ensures that he has face-to-face contact with all his customers and is a master at the use of the telephone to maintain good relationships. Marketing has been a secondary issue for the company. There is a small budget for marketing the brand and for promotions of the sweet franchises within the Asian community. It relies on its reputation for gaining flight kitchen contract work. The historical links with Company 2 has enabled the partial-processing contract and the relationship is close with daily contact and visits to ensure the smooth processing of orders. For supermarkets, the company employs an account manager.
Supplier Relationships
The only written contract is with First Milk, supplying high quality milk with provenance assurance. Company 1 supplies diced vegetables for snacks and the flight kitchen. A local cash and carry, previously part owners of the company, supply sugar and spices. The Manager avoids single sourcing, except for milk supply and diced vegetables. He talks to competitors, visits exhibitions and keeps abreast of prices, products and manufacturing innovation. When asked whether he would purchase from a competitor in an emergency:
“What, buy from [competitor]? I'd cut off both these hands before I would do that!”
Supply Chain & Procurement Management
The company has developed its systems through custom and practice. Forecasting is done using Excel spreadsheets. Close contact with suppliers, built up over a long period has created a partnership approach where suppliers aim to exceed expectations. Late deliveries, stock outs and stock write-offs are extremely rare occurrences and are rectified immediately.
Information from suppliers that would be useful to the company is relayed immediately to maintain its competitive edge. The company would like to explore IT tools to account manage with customers and suppliers in a systematic manner.
Collaborative Partnerships
The association with Company 2 has involved technology transfer in both directions. The company has obtained accreditation and obtains advantages from being part of its buying group.
Warehousing & Logistics
The company occasionally has need for third party warehousing of frozen and chilled meals. Milk is stored in tanks on the premises. All suppliers deliver and all customers collect.
Technology - Production Processes & Software
The company uses a modified Unitron system, fryers, ovens and industrial woks. There is a flight kitchen and an ice cream plant. Production workers are not computer literate, but are highly skilled at accurately forecasting production volumes and partial processes that are based upon customer orders. The company uses the Internet both to communicate and to research new equipment and uses Excel spreadsheets for all other forecasting and planning purposes.
Company 4
Customer Relationships
Relationships with customers in the two public markets are good. It has only one other customer, Company 1, which is also owned by the family.
Supplier Relationships
The company has two main suppliers from Holland and one from Cyprus. Nearly 80% of purchases originate from these suppliers. There are 10-12 other suppliers from Cyprus, Egypt, Holland, Spain, Kenya and Pakistan. These relationships are functional and based on trust. The company, being in the public markets, has direct access to prices and can augment this knowledge with research on the Internet.
The company usually deals with the agent of the grower. Product is often placed with the company on trust with the understanding that it will take a commission of 8-10% on the sale.
Supply Chain & Procurement Management
There is a SCM department in the market. Orders from customers are aggregated as a matter of course on a daily basis. Forecasting has little value in terms of obtaining the best price since the company would lose out on the advantages to be had from market fluctuation and become tied to a supplier. The company will sometimes purchase from a competitor. There are no service level agreements or contracts with suppliers.
Collaborative Partnerships
This is not a process that can take place in the conditions of a public market.
Warehousing & Logistics
The company has its own warehousing. It contracts out all its transport needs.
Technology - Production Processes & Software
Purchasing is done using Excel spreadsheets and the company deems this adequate for their purposes. They use the Internet to research prices and use fax machines to aggregate orders.
Company 5
Customer Relationships
The company has a close relationship with Company 2 and Company 3. It has a well developed marketing operation with regular promotions, exhibiting at trade shows and advertising on Asian radio and television.
Supplier Relationships
Rice is an international commodity. The main suppliers are the company's own factories in India and Pakistan. The company purchases from six other countries, though Basmati rice appears to be the most popular product.
Supply Chain & Procurement Management
The company has a procurement department and has contracts with all its suppliers. Its own factories work to ISO 9000 standards. The supermarkets do not provide purchasing forecasts, making it difficult to plan purchasing accurately. Orders from customers arrive weekly. However, the company plans to a 13-week cycle of purchasing using historical data and allowing for growth.
Collaborative Partnerships
Occasionally the company will collaborate with a competitor to purchase if there is a price advantage in this.
Warehousing & Logistics
The company uses third party warehousing and logistics. Potential suppliers undergo a rigorous due diligence procedure where premises are inspected, accounts and management processes scrutinized and it is determined whether the company is committed to cutting costs. A view is then taken about the potential supplier to judge if this is likely to be a long-term player.
Technology - Production Processes & Software
Brown rice is hulled, impurities are removed and then packing takes place. The company does not encourage visits to their plant. The company is currently exploring the use of SCM software.
Customer Relationships
A single source for purchasing and a single major customer were common phenomenon throughout the supply chain studied. The aspiration at the outset for most businesses was to start within the niche ethnic market and later mainstream the business. The supermarkets offered one route to the mainstream, offering large volumes and relatively low profit margins. With the exception of Company 5, none of the businesses studied have managed to mainstream their brands, use new customer acquisition strategies or a sales operation.
The businesses studied had excellent relationships with their single or handful of customers. It is a characteristic of good SCM that the number of customers are reduced, offering products to smaller customers through other distributors and thus reducing administration and inventory costs.
Businesses have arrived at this more by necessity than by design. Customer contact and co-operation was intense, on a daily basis, at every level of each organization but there appeared to be no targets for new customer acquisition and retention and relatively little sales and promotion activity. An account management strategy and training in account management for key executives would be a starting point for brand building and minimizing the risks of serving a single or a handful of customers. Reliance on the supermarket to give consumer feedback and with little access to market and field research has meant that own brand development has suffered or is non-existent.
Supplier Relationships
Supplier relationships were long-term and based on trust, often involving family relationships, friendships or loyalty due to assistance given at the early stages of business start up. In fact, one company suggested that if they acquired other customers, their main customer may feel neglected and become suspicious that problems had occurred because the company was favoring its new customers. The core business in the supply chain, Company 2 has a procurement department. Once a price and a service level agreement had been negotiated, based upon the large volumes used by Company 2, it was made clear that the same terms should apply to all the smaller companies in the larger group, the co-packer of snacks and Company 3.
Supply Chain Opportunities
Reduction and consolidation of the supplier base is usually an issue with most companies introducing SCM. For the companies studied there is a need to expand the supplier base. Company 2 has a target of a 75/25 split for major purchasing between the current supplier and alternative suppliers. Company 3 has already made this transition. Just-in-time delivery and production is a common feature. The use of fresh produce, the short shelf life of the finished product and infrastructure costs in London force this discipline. Sharing of information and appreciation of the production processes in the supply chain has resulted in a reduction of stock level, stock-outs and late deliveries.
Computer systems have been linked between the major supermarket customers and Company 2 using EDI. It has enabled point-of-sale information from checkout scanners in stores to be aggregated to place orders with Company 2, automate production planning and forecasting and, in the future, introduce SCM tools that link to other suppliers in the chain. Early supplier involvement in NPD is common with suppliers providing expertise, experimentation and products at no charge. Sophisticated production planning, rough cut capacity planning, aggregation of ingredients and batch production of partial processes took place whenever possible and with a minimal use of sophisticated IT or planning tools. Company executives were self-taught. There was little appreciation of the benefits of systematic SCM but a great deal of interest in the benefits this could offer, particularly forecasting purchasing and thereby obtaining better prices and an added value service.
Continuous Business Improvement
Technology transfer and sharing of contacts was common. Business improvement ideas and processes were passed on to secondary suppliers in the supply chain. Consultants were used for construction, hygiene and technical advice but there was little use of public or privately sourced consultancy help for business improvement. The only public service used was Food from Britain. Company 2 has ISO 9000 accreditation, Investors in People and food hazards risk management exceeding international standards. Company 3 mirrors some of this accreditation, sufficient to assure its customers. Company 5 is similarly accredited in the UK and abroad. The rest see accreditation as a business cost that should be avoided for as long as possible.
CONSUMER PERCEPTION
This Chapter will high light and explore the consumer perception and opportunities which can provide crucial guide lines for effective brand building. This chapter discusses the 2nd objective of the study i.e. “To Assess the consumer Perception towards Indian Foods and the relevant Marketing Mix to exploit the opportunities.” This will be discussed on the basis of secondary data findings.
A Field Study by Byangela Tregear, Sharron Kuznesof, Andrew Moxey on the “Marketing regional foods in the UK: an exploratory consumer study, 2000, revealed the following points.
Major Factors
Foods specific to a country, region or area
Regional foods were strongly associated with a specific area. Typical comments were: "foods produced from a particular region and labeled as such" and "any sort of local dish". However, the geographical boundaries of the term 'region' varied according to the age profile of the groups. For older discussants (45+ years old), the 'region' was referred to in terms of areas within the UK. For the younger discussants, (particularly 18-35 year olds) 'Indian' included non-UK cultures and cuisines such as Indian, Italian and Chinese. In reflecting upon their cosmopolitan outlook, the younger participants suggested that their travel experiences, media influences and the variety of food products that were perhaps unavailable to their parents and preceding generations, gave them this broad perspective. This perspective was borne out further in the examples of Indian foods given by discussants: although the most common examples were of historical British foods such as Cornish pasties, Yorkshire pudding and Lancashire hot pot, the younger discussants mentioned certain "ethnic" cuisines as being examples of Indian food: "you can go Indian with foreign food, if you go to Manchester the big thing today is Balti".
"A flavor of the area"
The association between foods and a particular locale was attributed in part to the climate and geomorphology of that locale. Physical environmental conditions and resources were seen to dictate the crops which would flourish and appear in natural abundance. Indian foods were: "grown and produced in an area”; "a product suited to a climatic area"; "farmed and produced in a region". In addition, the sourcing of indigenous raw materials for Indian foods was considered crucial in bestowing unique attributes of an Indian food. Discussions relating to the product prompt Wensleydale cheese illustrate this point: "if it's a Indian food it should be grown and produced in the area....Wensleydale cheese is made in the local Wensleydale area.....most of the milk comes from the area....I thought this was what gave it its distinctive taste....it's the flavor of the area you are actually buying".
"Poorer people's food"
Indian foods, for the majority of the discussants, were grounded in an historical association with consumers from lower socio-economic and income groupings. These consumers were believed to be reliant upon 'Indian foods' because the ingredients were presumed home or locally grown and thus plentiful and relatively inexpensive: "Indian food is....basic ingredients, things that were cheap or you even grew yourself". The participants also linked Indian foods with particular lifestyles closely associated with various 'traditional' means of employment. A discussion excerpt reflects upon meals for miners: "Indian food....used for a lifestyle that was traditional, like Cornish pasties taken down a mine....meat in one end, jam in the other....a complete meal in a pastry case....and leek puddings....leeks were grown by miners in their allotments and that was another cheap filling dish". Interestingly, discussants perceived that some producers and caterers were reinterpreting this perception of Indian food as having 'humble' origins, by promoting their offerings as desirable premium products: "a lot of
Indian food has grown up with....things that were cheaply available in the area, which so often tends to be gourmet now, but which was originally the poorer people's food".
"Whatever the locals eat"
Spontaneous descriptions of Indian foods made reference not only to the indigenous products of an area but also those dishes consumed by inhabitants of that area. Thus the participants identified Indian foods as the 'foods that locals eat', older discussants including themselves in that category: "we thought it was what people eat, what we ourselves eat...what the natives eat".
"Old-fashioned food"
Linked to the foods that local people eat was the belief that Indian foods were also 'old-fashioned' foods. It was believed that older people prepared and consumed Indian foods, because they had the knowledge, skills and time to prepare such products. Equally, the 'younger generation' were understood to have more eclectic food purchasing and consumption patterns. However, the categorization of Indian foods as 'old-fashioned' was not necessarily a negative attribute: "I like a lot of Yorkshire and Lancashire foods, old -fashioned food, it's Indian”.
"Home-cooked food"
Associations of Indian food with an older generation were corroborated by the younger discussants who frequently referred to them as the sort of foods eaten at their parental home: "when we mention Indian in Britain we have always mentioned family occasions, Sunday lunch and Christmas dinner"; "Indian food is more of a home-cooked thing".
Tradition and Heritage
However, in attempting to build a fuller picture of consumer understanding of Indian foods, some common linkages were identified that were made either implicitly or explicitly by participants when describing Indian food. In particular, linkages between the food, the tradition and heritage of a region, and the resident population were noted. 1 depicts these linkages in a schematic form.
Locale
As previous discussion has indicated, Indian food was described as food associated with a specific area or locale: the climate and geomorphology of that locale, was seen to determine soil type and fertility, hence giving rise to specific flora and fauna suited to the physical conditions. The use of such indigenous raw materials was believed to be essential in giving Indian foods their defining organoleptic characteristics. Yet the use of abundant locally grown or sourced raw materials to produce Indian food constituted only part of its definition. Residents' customs and the prevailing socio-economic conditions of the locale were also seen to be important in making a food ‘Indian'.
Customs
The link between Indian food and consumers from lower income groupings has already been made. In addition to this, a number of human factors or 'customs' were seen to contribute to the essence of an Indian food, including the use of particular recipe ingredients, methods of cooking, and means of serving or presenting the food. These customs were seen to vary according to geography, and could be unique to an area.
The use of particular recipe ingredients in Indian foods was linked to the availability of raw materials, which in turn were linked to climatic and environmental conditions. However, it was recognized that foods from different regions were often very similar in terms of ingredient content, and that any differences could be attributed to minor changes in food preparation or simply variations in Indian dialects: "Indian food, you call them stottie cakes we call them oven cakes. It's the same thing just a different name"; "[Indian food] is the food that is produced locally and that people cook their own way and have different names that they know the different foods by". The special characteristics of Indian food were also related to the manner in which the food was served: "[Indian food] is also served different.
Authenticity
Although a number of factors contributed to the discussants' vision of Indian food, it became apparent that the presence of these factors alone did not make a food 'Indian'. A persistent theme implicit throughout the discussions was that of authenticity, highlighted most clearly during the final stages of the focus groups, where discussants were introduced to the set of product prompts. It appeared that the perception of authenticity of the factors defining an Indian food underpinned the overall perception of it as truly 'Indian'. In turn, it appeared that the perception of authenticity could be affected by a number of factors, including those relating to the individual, the food product itself and situation in which the food is purchased and/or eaten. The relationship between these factors is shown in 2.
Personal Factors
Personal factors affecting the perception of authenticity of foods as Indian included the level of knowledge and experience a discussant had of a particular food. For example, the product prompt Dal Makhaiy recognizable and unanimously confirmed as an example of a northern Indian product.
However, the production of food in a specific area is not sufficient in itself to make the product authentic. For example, Phileas Fogg tortilla chips, although recognized by some participants as being made in the north east, lacked aspects of tradition and heritage, and were considered 'Continental, Mexican or Spanish': "just because the factory is in the north, you still would not see it as a northern food".
Product-Related Factors
Factors such as a product's name, its description, appearance, packaging and ingredient information were also viewed as means of judging the authenticity of an Indian food. These factors, when combined with discussant's personal knowledge and experience, accentuated acceptance or rejection of Indian food as authentic. For example, a product prompt of Cumberland sausage failed to meet most expectations of the attributes necessary to an authentic Indian product. This particular example was described as having an inappropriate texture and color, included too many additives on the ingredients list and also was not labeled as made in Cumberland. The sausage was hence described as a Cumberland 'style' rather than an authentic product.
Situational Factors
Situational factors, such as the place and context of the purchase or consumption of Indian food, served to enhance or erode perceptions of the authenticity of the Indian food. For example, delicatessens or other specialist retail outlets were more readily associated with authentic Indian products than supermarkets: " I think for this to be traditional cheese you would have to buy it wrapped in paper from a little shop rather than a supermarket"; "If you buy it loose from the delicatessen where it's cut from the round, it seems like it's more genuine". In the same vein, pubs were also associated with serving authentic Indian food. Moreover, as a visitor or tourist to a particular area, it was considered appropriate by most of the discussants to sample the local Indian foods in their place of production: "we went out with friends for the day to Bakewell and [went] immediately to this place to have a Bakewell tart, because it was just a thing you did when you went there". There was a perception that Indian food would be more genuine, and of higher quality if purchased in its place of origin.
The Relationship between Perceived Authenticity, Tradition and Heritage and Indian Food
In the preceding discussion, it has been shown that Indian foods were linked to a complex dynamic of human and physical factors which were drawn from understandings of the tradition and heritage of these foods. However, it was found that it is the perception of authenticity of the Indian food and its tradition and heritage that confirms its status as Indian. This relationship is shown in 3.
For a food to be accepted as truly Indian therefore, it seems that there must be a perception of authenticity of the intangible tradition and heritage aspects of the food, as well as the physical, tangible attributes of the product itself.
Purchase and Consumption Behavior: Indian Food Products and Indian Recipes One interesting outcome of the discussions was the different characterizations participants gave of Indian foods. These can be grouped into two distinct categories: Indian food products, and Indian recipes. These characterizations were seen to be linked to the purchase and consumption behavior of Indian foods.
Indian food products were characterized as those made by 'experts' that possibly involved some form of light processing that could not be replicated in the home. They were perceived as specialist, low-volume, high value and hand-crafted products, usually charging a premium price. The types of retail outlet from which such products could be purchased reinforced this specialist characterization. For example, delicatessens or other small independent, specialist food stores, were frequently mentioned as potential purchase outlets for Indian food products, the degree of personal service associated with these outlets also enhancing perceptions of authenticity. Whilst the discussants recognized that supermarkets offered Indian food products, they were not viewed as offering such a wide range. One exception to the latter was the supermarket use of temporary, often country specific, and promotions such as an 'Italian week', which were apparently designed to draw attention to a variety of products from a particular country of origin.
Indian recipes or dishes were distinguished by their form of preparation, being characterized primarily as 'home-made'. These dishes, described as filling and stodgy, but also warming and wholesome, were perceived to take time, skill and knowledge to prepare. In discussing their own culinary habits, some discussants had made modifications to Indian recipes in light of advice on healthy eating, for example using fat-trimmed meat in their recipes. However, if Indian recipes were not produced at home, pubs were viewed as the main place to purchase and consume Indian dishes, where local chefs were believed to be producing local dishes: "pubs are good for Indian foods...Indian beers to go with them". Restaurants were also mentioned as places to sample local dishes. However, the choice of catering outlet was dependent upon other factors such as meal occasion and required degree of formality. Pubs in particular were identified with lunch-time meals, and restaurants with special occasion evening meals.
Ready-made meals from supermarkets, espousing some form of Indianity, were regarded as lacking the authenticity of the foods purchased and consumed in specific areas, which were seen as 'a bit special': "I always try to taste the Indian food wherever I go....you expect them to be genuine, and not a copy". It was expected that Indian recipes or dishes supplied in catering outlets should be cheaper than non-Indian dishes because the ingredients were believed to be locally sourced. It was, however, recognized that this occurred rarely.
CONCLUSION & RECOMMENDATIONS
The main aim of the research is to assess the major issues that determines the performance and efficiency of the Indian foods/restaurants in UK. The Objectives are to
- To Assess the Service quality and the Supply Chain Management.
- To Assess the consumer Perception towards Indian Foods and the relevant Marketing Mix to exploit the opportunities
Ethnic minority food manufacture will continue to offer niche market opportunities. Business planning, professional advice and mainstream finance offer the best conditions for market entry and aspirational growth and moving into the mainstream.
A greater appreciation of consumer needs, aspirations and perceptions informed by desk and field research should be the basis of a marketing strategy that eventually builds mainstream brands in the UK and abroad. Existing supplier and customer relations can be further improved using account management techniques. Britain in general and London in particular are a melting pot for cuisines from all over the world such that London can presently lay claim to being the restaurant capital of the world. Spanish cuisine is particularly well represented by over 200 restaurants, 50% of which are in London.
The lavish Spanish Club opened in Cavendish Square W1 as long ago as 1920 and Don Pepe in Frampton Street NW8 claims to have led the ‘tapas' craze when they opened in 1974.
There is a very good selection of top class Lebanese restaurants in London, as well as Portuguese, Russian, Brazilian, Moroccan, Egyptian and even Ethiopian and most of the ethnic cuisines of the world are represented to differing degrees in Britain's capital.
Its objective is achieved and The 2nd Objective is to assess the consumer Perception towards Indian Foods and the relevant Marketing Mix to exploit the opportunities
Consumer Recognition and Understanding of Regional Foods
Researchers sought to investigate awareness and recognition of regional foods amongst consumers. In broad terms, the findings seem to support the premise behind policy initiatives such as EU regulation 2081/92, that individuals do recognize geographical distinction in foods. In terms of further understanding of these differences and how they have come about, a number of characteristics appear to be involved: regional foods were seen to be a product of both physical and human-related factors, which are related to the individual's perception of the tradition and heritage of the food. In terms of marketing strategies for regional food producers, the implication is that producers need to be knowledgeable of the factors relating to the tradition and heritage of their particular foodstuffs. A solid foundatation of knowledge could provide the basis from which to launch a promotional campaign.
However, the implications of the research for producers of 'new' or 're-invented' regional food products (which do not have a defined heritage) are less certain. Communication of authenticity would still be an issue of consideration for these types of producer.
Factors Influencing the Acceptance and Attractiveness of Indian Food Products
The research also sought to identify particular attributes of products which would attract consumers and trigger purchase. It was found that the perception of authenticity of a food's Indian characteristics is instrumental to an individual's acceptance and liking for a product: that is, for many consumers, an authentic product is an attractive product. Authenticity can be derived from intangible 'heritage and tradition' aspects of a food product, communicated through symbolism and/or labeling information on the packaging, as much as from the physical characteristics of the product itself, such as ingredients. With this in mind, it would appear that Indian foods are well-suited to promotional images and messages which draw upon aspects of heritage and tradition. Such activities alone are insufficient however: they need to be combined with a consideration of the product's physical characteristics, and how these meet with consumer expectations. In addition, the research findings have shown that both the tangible and intangible attributes of a Indian food, and consumer perceptions of them, can be influenced by the consumer's own levels of knowledge and experience of a product, and by the environment in which the food is purchased or consumed. Producers need to take account of all these factors for the particular circumstances of their own products, when making decisions on their marketing mixes.
To conclude, it appears that consumers do identify with the concept of regionality in foods. This lends weight to the underlying premise of policy initiatives such as EU regulation 2081/92, and poses opportunities for producers following a strategy of differentiation on a regional basis. However, in terms of formulating a marketing mix, it seems that a number of factors need to be taken into account. First, the product's physical characteristics should meet with consumer expectations of authenticity, in terms of ingredients, texture and appearance. Secondly, the imagery and symbolism attached to the product needs to be considered. As findings suggest that understandings of tradition and heritage are closely linked to Indian foods, these could form sound bases on which to build promotional activities.
Finally, the place in which the product is purchased or consumed needs to be considered: authentic products are more readily associated with small, specialist outlets such as delicatessens in the case of shops, and pubs in the case of catering outlets. However, underpinning all of these considerations is the need for producers of Indian foods to know and to continue to obtain information on, their customers, their expectations, and the factors influencing their behavior.
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Appendices
Appendix 1
Market Size of Indian Restaurants in UK
Restaurant/ takeaway
Index
Retail sales
Index
Total
Index
Retail as % of total
£m
£m
2003
1,698
100
391
100
2,089
100
19
2004
1,526
90
432
110
1,958
94
22
2005
1,578
93
483
124
2,061
99
23
2006
1,637
96
535
137
2,172
104
25
2007
1,679
99
565
145
2,244
107
25
2008 (est)
1733
102
613
157
2346
112
26
(Source: Mintel, 12/2008)
Appendix 2
Consumer perceptions of Restaurants in UK
Base: 1800 adults aged 18+ who have eaten in a restaurant in the last 12 months
%
Quality of service is very important to me
65
I don't like to feel I am being rushed by staff in a restaurant
62
The restaurant must have a good atmosphere
59
I prefer a menu with a wide choice
49
I like to try different dishes when I am eating out
46
I am prepared to travel to a restaurant I like
43
I am prepared to pay a premium for good quality food when eating out
36
I visit a restaurant at least once a month
28
I only eat out in a restaurant for a special occasion/treat
27
Small restaurants give a better service than large ones
27
I usually eat the same type of food when I eat out
26
Independent restaurants give a better service than chains
23
I like to take advantage of a special promotion in restaurants
20
I like restaurants where entertainment is provided
10
I prefer a branded chain to an independent restaurant
3
None of these
2
Don't know
*
* less than 0.5%
(Source Mintel)
Appendix 3
Questionnaire for the Managers
This questionnaire is not in a structured form, just because the questions varied from interview to interview. A next question was only asked, after considering the answer got from his/her. Though there were common questions for the purpose of standard results.
1. How many years, this restaurant is in operation?
2. What is your target market?
3. What type of Problems you face in the day to day operations?
4. Generally which is the busiest day of the week?
5. Why do you think _________ is the busiest day of the week?
6. What type of clientele you actually get?
7. What are the reasons you think for _______ to be your only clientele?
8. Are there any repeated customers?
9. How do you define repeated customers, how often they come?
10. Do you advertise or do promotions?
11. What type of advertising you do?
12. Why do you do that, who do you target?
13. Why do you think ______ type of advertising is effective?
14. Do you get targeted sales?
15. Roughly, how much you spend on advertising and promotion?
16. What type of promotions you do and why do you think it is effective?
17. What do you have to say in the case of: The Emperor of India?
18. Many customers say they look for good quality of services, what do you have to say in that?
19. What added services you provide to your regarded customers?
20. Is the Chef Indian, is he a family member or comes from India?
21. What do you recon for the problem of shortage of trained employees, esp. chefs?
22. What will you do if you face a problem of limited workforce, or if your Chef quits?
23. What will you do to raise the standards of service quality in your restaurants?
24. What will you do for the competition?
25. What do you suggest for a new comer in this industry?
26. How will you manage getting Chefs in UK?
27. It is known that you don't organize special events, if you do in future why will you do it?
28. It is known that you do organize special events, what are the advantages you get?
29. It is known that you have a strong customer feedback system, why do you think you need it?
30. Why do you think customers go for quality and not for price?
31. What modifications you want to make it in this restaurant and why?
32. Why do you believe in employee training?
33. Why don't you believe in employee training?
34. What ethnic background are you from?
35. What are the problems other than _________ you face?
36. How many employees work here?
37. How many hours of work they do?
38. What do you do when you come across shortage of Indian spices?
Appendix 4
Indian Communities in London
(Source LFC, 2004)
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