Food-Service Franchises Fight for Consumer Dollars
When economic times are good the food-service industry can be pretty brutal in its competitive nature. When the economy hits a slump, that competition can become downright bloody. Never before has this been more apparent than in recent times.
As consumers cut back their spending, restaurant owners become increasingly frustrated in trying to bolster flagging profits. Many continue to look for better ways to do business, while others collapse and shut their doors. Others, in their frustration, may even resort to less than scrupulous marketing tactics.
I drive past a prime example of this latter case on a regular bases. In area in which I reside there are two well known fast-food hamburger chains on either side of the street, directly across from one another. One of the franchises is from a slightly more successful brand and has weathered the economic decline fairly well. The other seems to be declining rather rapidly.
As the frustration and panic of the owner of the less popular franchise escalates, there has been a degenerative quality to the blurbs on the franchise’s marquee. The statements began as vague innuendo about “the other guy across the street”. Over time, as the less popular franchise’s parking lot become increasingly less crowded and the “other guy’s” parking lot remained fairly consistently packed, the adds got worse. Before all was said and done, the owner of the less popular franchise had accused the “other guy” of almost every conceivable crime against food, taste and humanity in the book (and a few I’d never considered before).
Obviously, this rather aggressive and distasteful tactic was ineffective. The “other guy” continued to prosper while the less popular franchise was forced to eventually shut its doors to the public. What made the difference and why does mud-slinging fail?
The difference, quite simply, is value. The “other guy” is well known for providing a substantial value of food per dollar. In fact, they have an entire section of their menu dedicated to just such value.
While the less popular franchise across the street was engaging in low blows, was the more popular franchise reciprocating? Not at all. The owner of the more successful franchise was using his marquee to consistently promote the franchise’s value items and special promotions.
The community honestly didn’t care what was said about the franchise on the competitor’s sign. What the community did care about was getting the best value for their already stretched tight dollar. This is exemplary of where a successful restaurateur needs to turn his or her focus when the economy begins to slip.
When people are scaling back their budgets and cutting back on how much they dine out, it is no time to go on a campaign against what the other guy does or does not do. Rather it is time to look internally and start focusing on giving the public what they want most: more bang for the buck. Perhaps if the failed businessman had realized that the “other guy’s” customers were there for the prices rather than how much better the food was, he or she would have altered their tactic and promoted their own value items. If so, then that franchise might still be open today.
