1.1 Research background
According to Lovelock & Wirtz (2011), services can be defined as economic activities offered by one party to another, usually in the form of time based performances to produce results and value for customers, and usually done without an exchange of ownership of any physical elements that are involved. This means that services are mainly about the exchange of money and intangible goods like labor, skills, and access to facilities, and service customers expect value from the value creating elements of these intangible goods instead of a transfer of ownership of tangible goods.
As one of the oldest and most common forms of the service industry, the restaurant business is also one of the most competitive as well. In Surabaya …show more content…
De’Excelso is a domestic restaurant chain that can be considered one of the most successful restaurants in the Industry. De’Excelso has over 126 outlets spread over 39 cities in Indonesia, and it has been in the industry for 25 years (About us – Excelso Coffee, n.d.), making it one of the most successful domestic restaurant chains in Indonesia. Its first outlet was established in Jakarta’s Plaza Indonesia in 1991 and later it expanded to other cities. The first outlet established in Surabaya is the Tunjungan Plaza (TP) outlet, which was established in 1996 (Susanto and Daud, 2007). De’Excelso is one of the giants of the industry, but it still faces stiff competition in the form of other restaurants, especially due to a recent event called Franchise and License Expo Indonesia, which introduced over 350 restaurant brands from 12 countries to Indonesia, likely tightening up competition as they start to enter the market (Soetantini, 2016).
With such a large influx of new competitors, it is important for De’Excelso to provide the best service for their customers to make sure that they keep coming back. One of the best ways to do this is to understand what customers perceive to be valuable in a restaurant like De’Excelso and to provide it to them. So De’Excelso, needs to understand the customers’ perceived value …show more content…
Perceived Value is defined by Kotler and Keller (2011) as “The difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives.” (p. 147) in their Marketing Management book. Essentially, perceived value is the result of an evaluation, done by customers, of whether a product or service is worth its cost or not compared to the benefits that it gives or the qualities that it has. This means that the more value a customer think they’ve gotten, the likelier they are to be satisfied and return to De’Excelso. Thus, to increase a customer’s perceived value of their business, De’Excelso needs to either increase their service’s perceived benefit or decrease the customers’ cost of obtaining that
According to Lovelock & Wirtz (2011), services can be defined as economic activities offered by one party to another, usually in the form of time based performances to produce results and value for customers, and usually done without an exchange of ownership of any physical elements that are involved. This means that services are mainly about the exchange of money and intangible goods like labor, skills, and access to facilities, and service customers expect value from the value creating elements of these intangible goods instead of a transfer of ownership of tangible goods.
As one of the oldest and most common forms of the service industry, the restaurant business is also one of the most competitive as well. In Surabaya …show more content…
De’Excelso is a domestic restaurant chain that can be considered one of the most successful restaurants in the Industry. De’Excelso has over 126 outlets spread over 39 cities in Indonesia, and it has been in the industry for 25 years (About us – Excelso Coffee, n.d.), making it one of the most successful domestic restaurant chains in Indonesia. Its first outlet was established in Jakarta’s Plaza Indonesia in 1991 and later it expanded to other cities. The first outlet established in Surabaya is the Tunjungan Plaza (TP) outlet, which was established in 1996 (Susanto and Daud, 2007). De’Excelso is one of the giants of the industry, but it still faces stiff competition in the form of other restaurants, especially due to a recent event called Franchise and License Expo Indonesia, which introduced over 350 restaurant brands from 12 countries to Indonesia, likely tightening up competition as they start to enter the market (Soetantini, 2016).
With such a large influx of new competitors, it is important for De’Excelso to provide the best service for their customers to make sure that they keep coming back. One of the best ways to do this is to understand what customers perceive to be valuable in a restaurant like De’Excelso and to provide it to them. So De’Excelso, needs to understand the customers’ perceived value …show more content…
Perceived Value is defined by Kotler and Keller (2011) as “The difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives.” (p. 147) in their Marketing Management book. Essentially, perceived value is the result of an evaluation, done by customers, of whether a product or service is worth its cost or not compared to the benefits that it gives or the qualities that it has. This means that the more value a customer think they’ve gotten, the likelier they are to be satisfied and return to De’Excelso. Thus, to increase a customer’s perceived value of their business, De’Excelso needs to either increase their service’s perceived benefit or decrease the customers’ cost of obtaining that