Upgradation, Call of the Time

India has witnessed a renaissance in the food industry since the early nineties. The customer profile is changing with more disposable income in hand. In this scenario, one cannot ignore to adapt and scale up one’s product line to meet the tough competition. Upgradation and renovation is therefore, the call of time, as all the old biggies have either gone for upgradation or are in the process to survive and grow.

Why upgradation

The expanding customer base makes them more demanding in terms of quality, service and price. “Customers need change,” says Mr Sunil Lamba, Managing Director of Kwality Group. Running an outlet for years in the same format without making any changes is not acceptable in today’s competitive world. To be in pace with business style, one has to upgrade to meet the needs of the changing business environment. “One cannot survive without upgrading oneself,” opines Lamba.

People have different needs, taste and preferences. There are customers who like fine dining, QSRs; similarly youngsters like to hang out at cool joints. Customer’s tastes and preferences too are changing. There is a set of customer who likes Chinese, whereas, there are others who like Mughlai, South Indian, Continental, Italian, Thai etc. So what does one do? Either dish out all varieties or focus on one.

Right Strategies for upgradation

“How one upgrades entirely depends on why one wants to upgrade. If you want to upgrade just because you are old enough, then you need to do a complete face lift. Change the décor, ambience, uniform of your staff etc,” explains Mr Ajay Khanna, Vice President (Operations) at Nirulas.

If your customers have changed then either cater to them in different outlets---like a brand does when it caters to different formats under the same brand name---or one can start a new upgraded brand for different customers. If upgradation is required based on taste and preferences in terms of food, change your cuisine accordingly. Expand your service floor; increase your work force to cater to new customers. “One way to upgrade is expand the service floor, hire more people, and increase the service efficiency to get more customer turnaround,” says Khanna.

Providing authenticity to customer’s experience is also important. “We are in the process of renovation, the new look would be completely south Indian with even waiters wearing south Indian attire and food will be  served in typical South Indian fashion. This exercise will be done to give our customers a complete and authentic flavor of south India,” informs Mr Sadashiv Bhatt, Director, Sagar Ratna.

Another aspect is manpower which cannot be ignored. Hire and train your manpower to serve customers having different profile. Further, customer feedback is very important. Customers are the right people to advice you on your upgradation move. “Customers will tell you better their likes and dislikes,” says Khanna.

What to avoid?

Don’t ignore your core competence. During the course of upgradation it becomes necessary to keep in mind to never compromise with your core competence but rather build up your core competence. For example Haldiram, a brand that started as a traditional brand, serving the common man has undergone tremendous changes which are very well accepted by the customers. The changes were positive because they were able to maintain their traditionality, quality and pricing.

Pricing too is an important area. “Don’t go blind for ambience change; calculate your ROI before going for extreme renovation because you cannot transfer all the cost on your customers shoulders,” opines Khanna. “Quality comes at price for sure but you should not charge exorbitant price to your customers, they will never come to you again and your loss would be your competitors gain,” says Lamba of Kwality Group.

“When a brand renovates, customers become apprehensive. This happens because of the perception that the cost of renovation would be recovered by them in the form of increased prices. These fears should be overcome by communicating to your customer that you are still the same but in a new look at nominally high price,” explains Khanna.

Finally, guard against growing rapidly. “One should follow an ideal pace of growth. Rapid growth may affect quality and lead to shortage of skilled manpower,” opines Lamba. To meet the ever changing needs of customers, adapting to the new business model that will serve them best, is the only solution.