A Closer Look into Galaxy Restaurant

The hospitality industry is quite competitive, especially in the current market environment. One of the most prominent aspects that determine how well customers or clients are attracted to a restaurant relates to quality. Most restaurants presently are focused on addressing the needs of their customers through provision of quality either in the products they offer such as food, entertainment, and the general appearance of the space. Therefore, most restaurants are engaged in branding, and making their premises attractive to potential customers. Galaxy Restaurant and specifically the management team must be aware of these facts in order to gain a favorable share of the market. The main objective of this paper is to analyze the various factors and issues that the management of Galaxy Restaurant must be aware of or should analyze and consider in order to operate effectively and efficiently in the competitive hospitality industry.

Part I

Segmentation and Target Market Analysis

The four main criteria that form the basis for market segmentation include: Geographic, demographic, psychographic, and behavioral. Firstly, geographic segmentation targets customers on the basis of specific geographic regions (Thomas, 2019). People from different regions have different tastes and preferences, values, as well as interests. For example, people in urban centers may have higher preferences for junk food or take-away services compared to people living in the rural areas. Secondly, demographic segmentation divides a market on variables such as age, gender, family size, education level, income, and occupation (Dolnicar, Grün, & Leisch, 2018). This type of segmentation is the most commonly used, especially in urban center business environment. It is common to find restaurants that target only a specific class of people and for urban centers in particular, most high-end restaurants target people with high income levels. Thirdly, psychographic segmentation focuses on the intrinsic traits which the target customers have (Liu et al., 2019). Some of those traits could be personality types, values, attitudes and interests. Some publishing companies may publish newspapers with different headlines to circulate to different regions because of the interests of readers from different regions. Lastly, behavioral segmentation looks at the way customers make their decisions or how they go through the buying process (Sgaier et al., 2017). Brands of companies may be viewed differently by different people. Some customers can make their buying decisions based on how the brand appeals to them. For example, people in the United States can decide either to buy from Walmart or Costco based on their loyalty to these brands.

Galaxy Restaurant’s target market is an urban environment because according to the case study, the food prepared is similar to that offered in many hotels in town. The ample parking space must have been created with the working class in mind. In relation to the demographic segmentation, the restaurant targets people with high income levels irrespective of their age or gender. Many people with high incomes and live in the urban centers can be very sensitive to the quality of products and services offered by the restaurant (Morgan, 2018). The clients could consist of people such as business people, heads of various prominent firms, the political class, and the general working class. These people may have different tastes and preferences. Lastly, Galaxy Restaurant’s customers may be people who look at how their brand is appealing. Some of these customers may be attracted by the ambience and the image of the Restaurant. If some of the competitors of Galaxy improve their brands to become more appealing, or new entrants emerge with superior brands, then some of these customers may shift to these new or superior competitors. Therefore, it is important for the management of Galaxy Restaurant to always ensure that their brand is appealing and constantly improving to be in line with the emerging trends in the hospitality industry.

Competitive and Industry Analysis

Some of the big brands that Galaxy Restaurants has to compete with in the United States include: The Plaza, Four Seasons Resort and Waldorf Astoria. Apart from these prominent hotels, Galaxy Restaurant has to compete with established fast-food chains such as McDonald’s and Subway. These competitors not only target the local clients, but also international clients. The Plaza, Four Seasons Resort, and Waldorf Astoria target very prominent and eminent customers. They are high end hotels with far superior facilities. Fast-food chains such as McDonald’s and Subway have an international reach, with many outlets in different countries. These fast-food companies target especially the urban population, of which Galaxy Restaurant also tries to capture. All these hospitality companies are formidable competitors because their target market is also similar or almost similar to that of Galaxy Restaurant. However, over the past 5-10 years, the hospitality industry has been rapidly expanding. The biggest reason for the expansion is that the population is always growing, and a significant proportion of the world’s population lives in urban centers (Rai, & Rawal, 2019). Most urban centers have the best social amenities and job opportunities. Additionally, there is increased international tourism, and all these tourists need places to stay, eat and get entertained. From these recent past trends, the hospitality industry has a lot of potential.

SWOT Analysis

Strengths	Weaknesses
Profitability: The restaurant’s level of profitability has been doubling in every five years for the last ten years. Marketing: Galaxy Restaurant has aggressive pricing and targeted advertising strategies that have enabled the restaurant to capture a third of the fast-food market share in California. Capital stock: Galaxy Restaurant is capable of catering for its operational costs with minimal or no borrowing. Team management: The restaurant fully addresses stakeholder needs, thus motivating them to offer their full services to the company. Innovation: The restaurant embraces the application of new technologies to come up with innovative production.	Limited reputation: The restaurant is not yet fully established in the global market. Reduced profitability: As the baby boomers leave the job market to pave way for the incoming millennials, the company’s customers decline leading to a decline in its level of profitability.
Opportunities	Threats
Ready market: The residents, tourists, and travelers often visit the restaurant for its wide range of fast-foods and specialized accommodation services. Customer loyalty: The Company maintains a good relationship with a wide range of customers.	Competition: The restaurant meets a steep competition from similar restaurants, such as The Plaza, Four Seasons Resort, and Waldorf Astoria; thus prompting the company to spend heavily on its advertisement and brand promotion.  Price fluctuation: The prices fluctuate due to the changing demands from the available customers.

Part II

Product

The main products and services offered by Galaxy Restaurant include food and accommodation. However, to differentiate from the food offered by some of its competitors, the restaurant provides organic food which is not frozen. According to Gheribi (2018), firms must always embrace proper differentiation strategies, especially if they operate in an environment where similar products are being offered. Most of the high-end restaurants and fast-food joints freeze food products, and mostly only care about making profits. On the contrary, the Galaxy Restaurant positions itself as a pro-customer restaurant, which is not only concerned about providing comfort to its clients, but also ensuring that the clients eat healthy diets. One of the emerging issues in the hospitality industry concerns the safety of the food provided and many consumers are gradually becoming conscious about what they consume. In this respect, Galaxy Restaurant offers a superior product that is designed at addressing emerging consumer needs, tastes, and preferences. Secondly, the parking space provided by the restaurant is a relieving service, especially for people from the urban environment. Many people would want to sit in a place that offers convenience. When customers visit Galaxy Restaurant, they do not have to worry of where they will park their cars or their security. Lastly, for those customers who are only visiting the state or are traveling, accommodation is a superb service. Therefore, Galaxy Restaurant positions itself as a self-sufficient restaurant that addresses various needs of different customers.

Place

Galaxy’s entire distribution channel is multifaceted and involves a wide range of stakeholders. The restaurant primarily deals with various foodstuffs obtained from farmers located in various regions in California. However, Galaxy Restaurant does not necessarily obtain the products directly from farmers. Thus, retailers from various points of the region purchase the raw products from farmers and transport to factories for processing. Once the farm products are fully processed, they are bought by various wholesalers and consolidated in wholesales or supermarkets. Therefore, Galaxy Restaurant sends its buyers to wholesalers and supermarkets to purchase the processed products. Then the restaurant uses its workers to prepare the products accordingly to meet the needs of its customers. However, the restaurant purchases some farm produce, such as fruits and vegetables, directly from the farmers to reduce the expenses of engaging the middlemen.

The location of the restaurant, that is, in an urban environment, and a few meters from the main road gives it an advantage over its competitors. The advantage is that potential customers can spot it easily compared to similar restaurants, and that supplies can be delivered fast and conveniently. The reliable distribution channel also enhances continuity of provision of different products and services (Clouse, 2017). Usually, customers will always look for a spot that is easily accessible, and when various services and products are requested for, the relevant individuals should provide them without wasting too much time (Clouse, 2017).

Price

Galaxy Restaurant has one of the best pricing strategies in the region. According to Griffin (2019), a good pricing strategy entails cost and profit objectives, consumer demand, and competition. Galaxy Restaurant has been keen to meet these three elements of pricing strategy. First, the restaurant prices each commodity according to the value of its products and services, hence ensuring that customers see the value of their money (Griffin, 2019). Secondly, the restaurant raises and lowers the prices of its commodities according to the customer demand, thus ensuring that the price and demand of the products are always at equilibrium (Griffin, 2019). Finally, the restaurant sets the price of its commodities based on its competitors (Griffin, 2019). These pricing strategies enable Galaxy Restaurant maintain its customer loyalty, as they trigger the customers to have a positive emotional reaction towards the restaurant (Griffin, 2019). Consequently, Galaxy Restaurant remains competitive in the market in terms of pricing strategies.

Promotion

Galaxy Restaurant uses both novel and traditional methods of promoting its brand. The modern methods of promotion used by Galaxy Restaurant include internet/social media sites, such as Facebook, Twitter, and Whatsapp (Igbal, Akbar, & Budhwar, 2016). In this regard, the restaurant takes photos of its products and posts them on these social media sites where all classes of people may view. The traditional methods of brand promotion used by Galaxy Restaurant include sales promotion, personal selling, publicity, and advertising (Igbal, Akbar, & Budhwar, 2016). Use of internet/social media promotion plays a crucial role in attracting the millennials to purchase the restaurant’s brand. This is because the young generation makes the largest number of social media users. The traditional methods of promotion, on the other hand, attract the baby boomers to purchase the restaurant’s brand. Overall, by applying both modern and traditional methods of promotion keeps Galaxy Restaurant competitive in the market. Other words, Galaxy Restaurant is competitive in all aspects and, therefore, is deemed to thrive well now and in the future. 

References

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