Economy recession puts customers in a position where they have to set a priority between spending and their expenditures. They tend to reduce their spending and save money for unforeseen activities. This is more prevalent in a country like Nepal where people prioritize saving over spending due to lack of job security, solely being responsible for the whole family and instable economic and political condition.
If I were a manager, I would experiment on the following strategies to sustain my business.
Employee Retention
When the economy is down, it is obvious hard to retain employee with paying. But, when they are in our hard time, we can also share the situation to them for their retention. This is important because employee come under the core team. Here, if the situation is worst then usually people use to fire there employee. This is not the solution for the company and the employee. Rather, we can share the real situation to them and in spite of paying their full salary we can pay half and make them with us for the time. I think this would play more attachment between company and the employee (Mishra, Spreitzer & Mishra, 1998).
Creative Marketing
When the economy is down, it forces you to spend the money carefully. Nonetheless, challenges give rise to innovation. I would make extensive use of social sites as they are the cheapest form of marketing which offers a wide range of coverage. Besides, people continue to use social media regardless of the political or economic condition. I would collaborate with organizations such as e-sewa which would maximize the visibility of my restaurant, with online food delivery services such as Foodmandu and Bhoklagyo. Besides, I can also partner with organizations in exchange of gift vouchers when people eat at my restaurant and vice versa for the organizations I partner with. I would also look back at my sales in the past to observe the type of demographics that has been recurring, to effectively prepare a marketing strategy targeting them.
Reengineering the product
As people cannot spare money to spend in the restaurants, I would work on lowering the costs of the product to maintain a constant flow of customers. It can happen through bulk purchase of raw materials. I would also hold meeting with my team on what food item is sold more frequently than others. KFC is famous for their chicken, Pizza Hut for their pizzas and Delicious Momos for their momos. The item which is the bestseller of my restaurant could be sold at a slightly lesser price, enticing people to come back for it. Meanwhile, price of side dishes that people order with this item could be increased. Likewise, I would market such items which has more profit margin than the ones with lower profit margins. I would also try to introduce items in my menu, which would cost me less but would fetch me more sales and profit margins (Cooper & Kaplan, 1988).
Catering to customer needs
If people are not ready to eat outside, why not take food to their home? Giving them services as free delivery or partnering with food delivery companies could still work in continuation of sales as it saves people the cost of coming to the restaurant. To add to that, I would go and try to associate my restaurant with offices, and corporate houses around my location to provide lunch services to them to maintain sales and regulate the cash flow. People have to eat lunch regardless. If I am able to provide them lunch at a price they would have to spend anyways, along with the benefits like reward points giving them a free lunch for say, every fifteenth time they use my service, then it would definitely be appealing to them (Singh, 2006).
Specific timings and local context
Many restaurants, especially bakeries, offer discounts in the afternoon, evening or at certain time of the day. I would also introduce this in my restaurant where customers can get the same food at a cheaper price for some time period of the day.
I would also bring in schemes such as special discount for local customers as they would bring in their family and friends to make use of the discount and in turn, my business will keep running.
References
Cooper, R., & Kaplan, R. S. (1988). How cost accounting distorts product costs. Strategic Finance, 69 (10), 20.
Mishra, K. E., Spreitzer, G. M., & Mishra, A. K. (1998). Preserving employee morale during downsizing. MIT Sloan Management Review, 39 (2), 83.
Singh, H. (2006). The importance of customer satisfaction in relation to customer loyalty and retention. Academy of Marketing Science, 60 (193-225), 46.
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Economy recession puts customers in a position where they have to set a priority between spending and their expenditures. They tend to reduce their spending and save money for unforeseen activities. This is more prevalent in a country like Nepal where people prioritize saving over spending due to lack of job security, solely being responsible for the whole family and instable economic and political condition.
If I were a manager, I would experiment on the following strategies to sustain my business.
Employee Retention
When the economy is down, it is obvious hard to retain employee with paying. But, when they are in our hard time, we can also share the situation to them for their retention. This is important because employee come under the core team. Here, if the situation is worst then usually people use to fire there employee. This is not the solution for the company and the employee. Rather, we can share the real situation to them and in spite of paying their full salary we can pay half and make them with us for the time. I think this would play more attachment between company and the employee (Mishra, Spreitzer & Mishra, 1998).
Creative Marketing
When the economy is down, it forces you to spend the money carefully. Nonetheless, challenges give rise to innovation. I would make extensive use of social sites as they are the cheapest form of marketing which offers a wide range of coverage. Besides, people continue to use social media regardless of the political or economic condition. I would collaborate with organizations such as e-sewa which would maximize the visibility of my restaurant, with online food delivery services such as Foodmandu and Bhoklagyo. Besides, I can also partner with organizations in exchange of gift vouchers when people eat at my restaurant and vice versa for the organizations I partner with. I would also look back at my sales in the past to observe the type of demographics that has been recurring, to effectively prepare a marketing strategy targeting them.
Reengineering the product
As people cannot spare money to spend in the restaurants, I would work on lowering the costs of the product to maintain a constant flow of customers. It can happen through bulk purchase of raw materials. I would also hold meeting with my team on what food item is sold more frequently than others. KFC is famous for their chicken, Pizza Hut for their pizzas and Delicious Momos for their momos. The item which is the bestseller of my restaurant could be sold at a slightly lesser price, enticing people to come back for it. Meanwhile, price of side dishes that people order with this item could be increased. Likewise, I would market such items which has more profit margin than the ones with lower profit margins. I would also try to introduce items in my menu, which would cost me less but would fetch me more sales and profit margins (Cooper & Kaplan, 1988).
Catering to customer needs
If people are not ready to eat outside, why not take food to their home? Giving them services as free delivery or partnering with food delivery companies could still work in continuation of sales as it saves people the cost of coming to the restaurant. To add to that, I would go and try to associate my restaurant with offices, and corporate houses around my location to provide lunch services to them to maintain sales and regulate the cash flow. People have to eat lunch regardless. If I am able to provide them lunch at a price they would have to spend anyways, along with the benefits like reward points giving them a free lunch for say, every fifteenth time they use my service, then it would definitely be appealing to them (Singh, 2006).
Specific timings and local context
Many restaurants, especially bakeries, offer discounts in the afternoon, evening or at certain time of the day. I would also introduce this in my restaurant where customers can get the same food at a cheaper price for some time period of the day.
I would also bring in schemes such as special discount for local customers as they would bring in their family and friends to make use of the discount and in turn, my business will keep running.
References
Cooper, R., & Kaplan, R. S. (1988). How cost accounting distorts product costs. Strategic Finance, 69 (10), 20.
Mishra, K. E., Spreitzer, G. M., & Mishra, A. K. (1998). Preserving employee morale during downsizing. MIT Sloan Management Review, 39 (2), 83.
Singh, H. (2006). The importance of customer satisfaction in relation to customer loyalty and retention. Academy of Marketing Science, 60 (193-225), 46.