INNOVATIONS IN THE

RESTAURANT INDUSTRY – AN
EXPLORATORY STUDY: AN
ARTICLE REVIEW

Link: file:///C:/Users/Admin/Downloads/Innovations_in_the_restaurant_industry_An_explorat.pdf

2019
PART 1: STRUCTURE

This study aims to examine the innovations in the restaurant industry in relation to the

profile of restaurant managers. According to Ivkov et. al. (2016):

This paper tends to identify managers’ current innovation activities and attitudes,
and also perceptions of what might become future trends and the prospective
course in the restaurant industry. Additionally, this paper analyses linkage
between socio-demographic profile of managers and a type of innovation they
prefer/apply. Full-service casual dining restaurant managers from three different
countries were interviewed in order to examine their attitudes towards
innovations, and to reveal their perceptions of future trends (Ivkov et. al., 2016).
As such, the intention of the paper is to explore current innovation activities and attitudes as

well as perception that could become future trends in the restaurant industry. It is also attempting

to link between socio-demographic profile of managers to the kind or type of innovation they

prefer.

In terms of it’s theoretical framework, it appears that this the study made use of the customer

value concept which is anchored on Gronroos’(2008) Customer Value Theory. Customers should

get value from the actions and activities of marketing. The new definition brings in customer

value as one of two key elements, alongside managing customer relationships. Thus, a customer

that buys two or three times from the same company could constitute customer relationship and

that this relationship should be understood and managed. The reason for this customer value and

relationship is because of customer satisfaction and high quality service.

It can be inferred from this paper that since it is examining the relationship between the

demographic profile and attitudes of managers in relation to innovation in the restaurant industry,

it is trying to prove that in hiring managers, they must be compatible with the kind of innovation

and strategy the restaurant company must do in order to survive the threats to changes in the

industry. As Ivkov et. al. (2016) amptly explains:

Changes in the restaurant market are constant, and mainly happen silently. These
changes are driven by demographic evolution, modern buyers’ needs and they are
also affected by the global economic crisis. Due to the invisibility of these market
changes, most retail companies miss chances to gain and/or retain competitive
advantages. Companies which miss these opportunities often face a decrease in
market share. The lost of the market share also reflects a decrease in number of
both regular and non-regular customers, a slow speed turnover, smaller profit,
further economic disadvantages and low service quality. When these companies
become aware of such a situation they are usually unable to follow market
demand without time-consuming in-depth research and significant investments.
On the other hand, more proactive market oriented companies can benefit from
adaptive concepts and well-timed business decisions. Moreover, being able to
recognize a beneficial course in the market, companies will be able to maintain
their market position with investments that should not be significantly higher in
comparison to those previously made. Modern consumers and their constantly
changing lives require a prompt response and service tailored according to their
needs (Ibid).
Thus, these rapid changes in the industry requires managers that should be adaptive to

these situations and should also be innovative proactively. So, the argument is that

managers demographic profile would have a relation to the style of innovation the

company would have in response certain certain changes in the environment.

The methodology of the paper relies on research into full-service casual dining restaurant

managers (n=74). Managers were interviewed in person after they had been explained how to

form their answers correctly. The managers were asked to rank the most important areas of

innovation by allocating the points (1=least important, 5=most important), to reveal recent

innovations of their company and to forecast dominant trends in the restaurant sector in the next

10 years. Additionally, they were asked to fulfill short questionnaire in order to acquire socio-

demographic data. The interviews were organized in 44 restaurants in Serbia, Slovenia and

England from May 2015 to September 2015.

The results of socio-demographic analysis reveal the following important facts: (1) most of

the restaurant managers are younger than 40 years (77.3%), (2) half of them (50%) have only

high school education, (3) majority (70.4%) of all managers do not have professional education

in hospitality. Led by their experience and feedback from customers, the managers ranked the

most important areas of innovation in the restaurant sector. The results are somewhat as expected

regarding Food and beverages (Ranked as No. 1), and surprising regarding Technology

application (Ranked as No. 4) and Responsible business (Ranked as No. 5). Human resources

were ranked as No. 2, and Design and atmosphere as No. 3. Changes in Food and beverages

area are global, constant and dynamic.

There is no argument that food and beverages should be the number one concern in a

restaurant but the last two areas of innovation on the list could reflect a poor manager’s profile in

terms of education and experience. In previous studies (Ivkov et al., 2014) it is found that

restaurant managers do not perform research on customer needs often enough and appropriately.

Moreover, they struggle with product or service innovation. Thus, the study argued that because
of the poor education of the managers interviewed, their perception on customer needs were

somewhat shallow and that why they would not be able to cope with innovation as demanded by

today’s customers.

PART IV: ORIGINALITY

The unique and valuable contribution of the study to the body of knowledge was that it

proved that it proved that the demographic profile of managers would have something to do with

priorities on innovation and that their poor education can affect their judgment and analysis on

what the customer needs and values.

In so many years, the notion of value has been conceived as a critical variable in

marketing. Customers should get value from the actions and activities of marketing. The new

definition brings in customer value as one of two key elements, alongside managing customer

relationships.

As Gronroos writes:

In principle, this is a positive development. However, a closer look at the way value is treated in

the definition reveals that the definition is based on a view of customer value that, although it

still dominates management jargon and literature, is under siege by current research.

The phrase delivering value to customers implies that value is embedded in the product

(goods, ideas, services, information, or any type of solution) which is delivered to customers for

their use. This is the notion of value-in-exchange, where the exchange of ready-made value

embedded in the products for money is considered the central phenomenon to marketing study.

The growing importance to marketing success of interactions between customers and a set of

resources controlled by the firm is neglected (Gronroos 2008, pp. 398-399).

exchange view towards a notion of value being produced not by the supplier, but by the customer

when using products and when interacting with suppliers in co-creation with them. According to

this research, there is no value for customers until they can make use of a product. Value is not

what goes into goods and services, it is what customers get out of them; in other words, value

emerges in the customers’ space rather than in the producer’s space. Customers assess the value

of goods and services based on what is received and what is sacrificed.

PART V: CONCLUSION

Based on the methodology of the study, the study is convincing as it actually was

able to do in-depth interviews with restaurant managers and got their demographic profile

in relation to their priorities to innovation. Innovations serve to help survive on the

market, to improve processes and products and to upgrade business concepts. Despite the

uncertainty of the return of investments, severe competition leaves no choice. The results

generally indicate a lack of creativity and innovative ideas among the managers. The

main reason for that could be found in absence of professional education, a low level of

general education, a young age, and lack of experience. Additionally, managers do not

conduct surveys among customers often enough.

Most restaurants struggle with being innovative and have difficulties coming up with

fresh ideas continually, especially ones that customers are willing to pay for. Therefore,

managers must consider the significance of staying competitive by prompt response to

about the global trends through scientific papers and similar published researches.

From a practical point of view, it is suggested that socio-demographic profile of

managers can indicate and predict the direction of current and future business activities,

and therefore the owners should watch who they employ. As this paper focus on the

demographic profile in relation to the need for innovation in the restaurant industry, it is

suggested further studies should be also conducted more on the variable of the managers’

attitude in relation to innovation since could also be an interesting aspect from a

managerial point of view. In terms of application to management, this can also be applied

to other industries wherein the selection of managers should carefully conducted in

relation to the innovation requirements of their respective industries.

REFERENCES

Grönroos, C. (2006) ‘Adopting a Service Logic for Marketing’, Marketing Theory 6(3):

317–33.

Gronroos, C. (2006) On Defining Marketing: Finding a New Roadmap for Marketing,

Volume 6(4): 395–417. www.sagepublications.com