Retention of the korean restaurants customers

Retention of the restaurants customers

INTRODUCTION

In everyday life we face lots of marketing and sales campaigns in newspapers, TVs, radios, which are directed at acquisition of new customers. In every Korean business streets you may find mostly 2 kind of stores, a small restaurant or a telecommunication store.
Because of the similitude of the stores next to each other, each store mostprovide an attractive mix of advertising, good deal and great service in order to differentiate themselves from the competition. A good example of such marketing and sales campaigns can be telecommunication companies which propose to buy a phone at a price below market or give it for free, if a consumer will become their customer for a set period of time. In this perspective a question arises: isit a good idea to focus more on acquiring new customers instead of retaining the existing ones. The reason I chose to base this article on the restaurant industry instead of the telecommunication one, is simple because even the telecommunication stores are independent at some point they are still attached to the main company rules therefore have little freedom of act to perform their ownstrategies. On the other hand, little restaurants are independent and allowed to realize their own promotion in order to attract new customers therefore the service marketing plays a bigger paper in the business life.

THEORETICAL BACKGROUND

In this paper we look to determine factors to increase retention of the restaurants customers. First, we need to define what retention of the customers is.Zineldin (2000) defines customer retention as a rate – percentage of the customers at the beginning of the period which are still remaining customers at the end of the period.

Dawes (2009) defines retention simply as a number of customers who stay with the service during the set period of time.

Newell (2000) describes customer retention as the return on customer relationship marketing.Colgate et al. (2007) in their work, research customers who decided to stay with their present service provider after serious consideration of switching to another service provider. Colgate (2007) conducted a big empirical research which covered big variety of service industries (banks, insurance companies, doctors, electricity companies, dentists, mobile phone companies, fitness centers,hairdressers, Internet service providers, telephone companies, airlines, credit card companies, auto mechanics, video stores, and opticians) but not the restaurant service industry.
The final reasons to stay according to him are categorized into the switching barriers and affirmatory barriers. His research gives the understanding of broad categories which influence the customers‟ retention (e.g.satisfaction), but don‟t specifies these categories (i.e. the satisfaction with which determinants of the service increases retention?). Indeed, if the customer answers that he or she is satisfied with the current service provider this will not help us to understand deeper the satisfaction with which factors makes customers come back.

White, Lemon and Hogan (2007) propose marketers of thenon-contractual services (as restaurant services are) to highlight customers‟ flexibility to leave when they want and to highlight customers‟ possible regret if they leave service in order to increase customer retention. We think that among the strategies that highlight possible regret of the customers if they defect can be strategies that create different kind of switching bonds.

Han, Back, and Barrett(2009) research relationships between consumption emotions, customer satisfaction, switching barriers and customer retention. They identified next switching barriers for the restaurant customers: switching costs, relational investment, lack of alternatives, preference. Authors state that these switching barriers significantly related to repurchase intentions, and they explain why customers come...