Consumer Behavior / Ming Tsai

The second half the day was a guest lecture from celebrity TV chef Ming Tsai, so our In the News rollcall was shorter than usual. The New York Times had an interesting article about an Italian restaurant on the Upper East Side that serves rich people, many who pay on a tab basis. Richard said that in these situations, the rich are notorious for not paying their bills.

A few opening in the city were notable, including 'Absinthe Wine Bar', which is odd, since Absinthe is a liquor, not a wine. Tom Colichio's Craftsteak is reopening as 'Halfsteak', in which the steaks come in 6 oz portions, with fries on small plates, for around $15. That sounds great to me -- I can go eat at a steak house and eat (and pay for) a portion that I'd cook for myself at home, a portion that won't block my colon for a week.

Finally, some kids got smart and built a transmitter to take over a speaker system at a drive-through Taco Bell. They shouted obsceneties or whatever at customers. Taco Bell is threatening to press charges, but Richard feels if they really wanted to spin the story to their advantage, they should get the kids to do some high-profile charitable work in leu of pressing charges. The Taco Bell is in a small town, and if you start prosecuting your customer's kids, there could be unintended consequences.

The next section of the class was dedicated to ServSafe and the introduction to the concept o f the flow of food. In a nutshell, when one follows the flow of a food item from entering a restaurant to leaving it, the trips through the temperature danger zone can be traced. An item can arrive frozen, brought into the danger zone to prep (41-135 degrees, where bacteria live and grow), refrozen, brought back through it to cook, cooled into the zone to be served, thrown into a doggie bag and into the back seat for hours, so when the customer eats it tomorrow and gets sick, thinks it's the restaurant's fault and not you. Talk of lots of thermometers, temperature logs, etc., stuff that's nice in theory but not horrendously applicable to the real world restaurant settings.

Consumer behavior is studdied to figure out how to manipulate customers into deciding to buy from us. This study is based on the assumption that human behavior is not random, but can fit an identifiable pattern.

A decision making model can be seen like:

Need Arousal --> Info Retrieval -->
Evaluating alternative choices --> Consumption Decision -->
Post consumption feeling.

There are two sets of influences along this model, extrinsic and intrinsic. Extrinsic include culture, socioeconomic level, reference group and household. Culture includes subculture, which if identified can help sharpen marketing. Socioeconomic level is directly related to the frequency of dining and reference groups are for comparing thoughts and feelings with others. Example, after a meal, someone says, "I thought that was great, don't you?" -- it colors perception. Friends, media, and subculture are all parts of the reference group. The ultimate reference group is the household, the immediate family who may be doing the real decision making for the individual consumer.

Intrinsic influences are needs, experience, personality/self-image and perceptions/attitudes. Needs are charted in Maslow's hierarchy (illustrated at right.) Starting at the base is basic needs, and as you go higher you get more ego-driven. At the base is 'physiological' needs -- the drive to kill hunger, to feed. A hot dog cart aims for this. Next is 'safety' -- the need for security. A chain restaurant like McDonalds is safe, as it's always consistent and you know exactly what your getting. In the middle is what Richard called 'Social', though to the right is 'Love/Belonging'. A neighborhood joint with lots regulars or a country club with a membership policy targets this need (and all those below it.) Next is 'Status' (or 'Esteem'), something a fine dining establishment which offers pampering service targets. Finally, 'Self Actualization', when the client identifies personally with the subject to the exclusion of other needs. When some one says, "That was the best -insert food item- I ever had", that's self-actualization. For example, DiFara's of Midwood, Brooklyn, is dirty, has ugly Formica tables from the 70s, the service is painfully slow, it's very expensive for what you get and it's hard to get to. however, it's the best NYC slice pizza I've ever had, and will continue to try to go and talk it up as long as I perceive it to be that good.

Other intrinsic values are experience, where projections of the past determine future behavior. There's personality/self image, where one reinforces self image by the choices they make. And then there are perceptions and attitude. For example, the Amex ad in which they show a couple talking to the camera, all snuggly and warm, saying something like, "We didn't even pack a bag, we just went to the airport, chose a warm destination and just charged everything" is a total play on the perception and attitude of the product.

The second half of the class was a visit by well-known restaurateur and TV food host Ming Tsia, of the Simply Ming show on the food network and chef/owner of Blue Ginger in the Boston area. I'm not his fan, only watched his show for about 10 minutes, and am not interested in Asian-fusion food (a term which he hates -- fusion is for nuclear particles, not food -- he refers to his style as East/West). However, he was charismatic, told funny stories, and worked the room to make us feel like he was talking to his long lost best friend. Seriously charming without being smarmy, it's easy to see why the guy is a star -- if he wasn't a cook or a TV host, he'd be the CEO of an international firm, y'know?

A few anecdotes: A customer greets him at his restaurant and says, "I hope this is going to be the best meal of my life!", to which he replies, "I hope you eat at McDonalds a lot!" "Keller is an artist. I am a craftsman." As much as he hates to admit it, service is 70% of the reason someone comes to dine, and what they'll remember more than the food. He told a story of the only customers he ever through out of his restaurant, a pair of ladies in their 50s dressed like they were in there 20s on a busy Saturday night, picked over a single salad for 1.5 hours, and when the server tried to clear the table so the main courses could come, they shooed them away, saying they were still working on it. They were being rude, noticeably making the surrounding tables uncomfortable. Finally Ming had to come out with the main dishes himself and convince them that their food would get cold if it didn't come out now. As they were eating, they snapped their fingers at a busser for water. At this point, Ming came out and told them to "just get out." He didn't bill them for their food, and told them that he doesn't care if they tell their friends that they were treated unkindly, because anyone with a friend like them would not be welcome here. The surrounding tables thanked him profusely. Ming said it felt great, but doing something like that regularly will probably kill a business.

ServSafe / Odds n' Ends

Odds and Ends began the day, with surprisingly few stories about Valentine's Day. K had a disastrous experience at a place called Croton Reservoir, a Tavern/sports bar on the edge of the theater district. They got there early, it was empty, the multiple TVs were blaring a game in contrast to the roses placed on all the tables. The menu was fixed at $125 and limited, and three times during the evening they were asked if they had a reservation, which they did not, but still had to wait 20 minutes to get the check.

L has been working prep at a Mexican restaurant for a few weeks now, and on Valentine's Day, she was assigned to assemble deserts....but never was trained on how to do that, and ended up getting a lot of stick from the Chef when he came in. Richard said, with apologies, that someone with no training on the dishes should never be let into a kitchen. Poor management.

Long Island Jenny found a hilarious study from the Cornell School of Hospitality, a research paper on how to increase a server's tip. This must of been some serious corporate-funded study, because the results were things you'd only find at an annoying corporate chain -- introduce yourself by name, crouch at the table, draw on the check, entertain the customer, smile always, and then some wackier stuff, like give candy with the check, touch the customer (?), and forecast good weather (?!?).

The second part of the class was more ServSafe, in particular safe food handling. This can really be summarized in two sentences: 1) Wash hands often, wear gloves and don't get poop in the food. 2) If one is puking for either end or has jaundice, don't work around food. And then we took a quiz. I got 88% correct, and will need 75% to get the certification. Whoop de doo!

We only got partially into a discussion of the study of consumer behavior, so I'll just roll it into one complete entry tomorrow.

Market Segmentation / Field Trip

In the news, in the news, what's not in the news? An article in the New York Times about the home cooking of immigrants in NYC, led me to talk about a taxi stand on Houston and A, which has the most amazing Punjabi Indian food, made by women in saris at home and brought in to feed all the single taxi drivers. And of course, the 10 for $2 dumpling joints in Chinatown.

Chefs yanking peanut-based desserts off their menus underlined the ongoing drama of the safety of our food supply. Details emerging point not just to one freak incident but a much larger underlying problem. It seems these factories down South have few standards and fewer methods of oversight. Raw peanuts stored next to finished peanut product, minimum wage disgruntled employees wearing uniforms outside of plants, leaky roofs full of bird poop, and on and on. In 2004, a whistle blower informed the FDA that ConAgra found salmonella in their peanut butter and...nothing happened. Three years later, 100 or so people got sick and the FDA took action...and ConAgra refused to release their test results because they were deemed 'proprietary' and 'trade secrets'. WTF? The FDA didn't have power to make them release them or make their own tests! Thank you, George Bush.


In the Post, a stack of restaurants got busted for tacking on gratuity to the bill without properly informing customers. I was surprised to find the River Cafe on there, as it's a pretty well-known, supposedly legit spot. Part of this trend is because many tourists come from places where they don't tip....which is the way it should be here. Pay your own damn staff, you cheap f@ck owners!

The next part of the class was about market segmentation. Any population can be broken down to its target market. The ultimate unsegmented market is the entire world, but to develop a product that appeals to every single person the world is a bit unreasonable. A restaurant will probably not serve the entire population of the world, no matter how much they'd like to. A restaurant's market segment first and foremost is determined by a limited geographic segment. Richard broke it down thusly:

• Geographic Variables: How far will someone travel for it? One will travel farther for an internationally-know 4-star restaurant than a neighborhood diner. Additionally, what is the source of the people in the geographic segment? Residents? Office workers? Tourists?
• Demographic Variables: Age, class, income, family size, education, occupation, ethnicity -- all hard census facts that help define the aspects of potential segments.
• Psychographic Variables: "Lifestyle". Made from bald stereotypes, like 'yuppies' and 'dinks' (dual income, no kids). This is where those silly books about 'Gen X' and 'Gen Y' come in.
• Behavioral Variables: What triggers a buy? How much is a segment likely to spend?
• Benefit Variables: What benefits are people looking for in your product? Value, experience, atmosphere, etc.
  

What makes for a good market segment? Three things: first is sustainability -- there has to be enough of a market to make it worth while. Measurability -- the market has to be quantifiable. And Accessibility -- how to communicate with the market.

The second half of the class was a field trip to Daniel, a four-star French restaurant on the Upper East Side that is the flagship of celebrity chef Daniel Boulud. We were guided through the restaurant by the very Fraaaanch assistant general manager, from the beautifully appointed dining room to the spacious main kitchen. There is a skybox hovering over the front of the main kitchen, where for $1000, you and three friends can have a private 8-course tasting menu while watching the scrum below. The REAL scrum, of course, is in the basement, where a series of rabbit-warrens are linked together to create a massive series of prep rooms, storage, and cooking spaces. It was clean, but the low ceilings, the crowded crevices, and total lack of natural light would drive a normal person mad, especially if you were doing 12-hour shifts 6 days a week. Lesson learned: I don't have much interest in eating this kind of food, much less working to make it.

Sanitation / Product Life Cycle

The day started with an extended adventure into ServSafe and sanitation. Yesterday we visited viruses, bacteria and parasites. Today we said hi to fungi like molds and yeasts, which tend to spoil the things we like about food, but are not necessarily toxic. Fungi can be allergenic, however.

Then there's biological toxins -- seafood toxins can't be smelled, tasted, or cooked/frozen away. If you eat the liver of a puffer fish, you gonna die, whether it's grilled or made into ice cream. Mushroom toxins are only found in the wild, can't be cooked away, and can make you, uh, hallucinate. Or kill you.

Overall, food is the safest it has ever been in the history of man. However, due to modern distribution and the modern scale of the food industry, when there IS a problem it tends to loom large. Modern contaminants include chemical (cleaning fluids, machine lube), toxic metal (acids in a copper pot, lead from pewter) and simple physical (anything from some dirt or glass to Shanequa's press-on nail.) And of course, being that's it's 2009, lip service had to be paid to Food Terrorism -- 3rd parties and disgruntled employees who desire to sabotage the food supply. I love how Islamic terrorists and some kid who is pissed at getting paid minimum wage are some how equated in the vague and vaguely paranoid readings of ServSafe.

And then we saw a film, with some of the worst acting since Breakin' 2: Electric Boogaloo. Does a guy with a (fake looking) weeping sore, leaning over a cauldron stirring the sauce, REALLY need some manager-type with a tie and mustache to come over and tell him to get the hell out of the kitchen?

The other half of the class got into marketing and product life cycle, engaging in some wonky vocabulary. Customer behavior -- what makes for a positive purchase decision. One is searchability -- the customer must be able to find your spot, whether that's by google or by walking around the corner from your office. A customer will judge by the perception of similar restaurants. Then there is something Richard called 'credence qualities' -- only if something goes wrong or a special request is given does a customer see if the establishment is good by their behavior to said challenge.

Service quality was quantified in a series of 'gaps'. Particularly the gap between where I am and where I want to be. There is a knowledge gap: what I think the client wants versus what the client actually wants. (People say they want healthy. People actually eat McDonalds.) There is a delivery gap: what is supposed to be delivered versus what is actually delivered. And of course, the communication gap: what we say we are going to deliver versus what is really delivered. Nothing like raising expectations sky high (Ray's World Famous Original Pizza!) then delivering something else (mediocre deli pizza).

The product life cycle can be applied to a restaurant, a chain of restaurants or, um, an actual product. Start slow, grow into your market, reach saturation and try to keep steady, then decline and die or change. A company like McDonald's has been riding the 'maturity' part of the curve for long time, avoiding decline by introducing menu items and advertising like crazy against competitors. Twenty five years ago they introduced a 'Big Mac,' and with one silly song everyone knew exactly what that was, overcoming the knowledge gap pretty handily.

A big company in decline would be KFC, who changed their name from Kentucky Fried Chicken to try to accommodate fried food's bad. Recently, they've been advertising that they have 'a cook in every restaurant,' trying to overcome the perception that their food is pre-fab and made by minimum-wage poorly-trained expendable cheap labor. Their market has been eaten away by other chains like Boston Market, who spin fast food chicken in a very different way.

The Microworld/Product Life Cycle

First, we shared our recent experiences with food service from the weekend. I mentioned how I stopped in on a Chinese take out joint to pick up a meal to go, and on the way out I saw three little Chinese kids eating in the small, empty dining room. I couldn't help but notice that they were eating lobster tails and gorgeous huge shrimp -- I'd rather order THAT than fried rice.

Long Island Jenny spoke of a restaurant named Guilt, she and her boyfriend spent $600. The food was great, but the waiter was a little snobby about swapping out one item for another on the prix fixe menu. On top of that, they had to flag down a waiter at the end of the night to get the check. Good food or not, for that kind of price, she should have been made to feel pampered and not uncomfortable in any way.

White Sushi Chef went to a bar called Agave Sunday night with friends. Everyone got served except him...and they were the only people in the bar. The dude is a little meek, but still, that's kinda weird.

Another student described a restaurant where when you come in, you order from a counter, then are brought down a level to a game room and bar. Pinball, foosball, video games and drinks are available until the party is called and sat in the upstairs dining room where the food arrives as you sit -- no waiting. Kids eat at a set $3 price. No waiting and boredom, good for kids.

Richard was in Fairfield, CT this past weekend and had a meal at Joe's American Bar & Grill, a corporate upscale mini-chain. The menu was large and didn't specialize in anything, with everything from grilled fish to Mexican-American dishes like nachos. The thing that struck him the most was the text on the back, which was clearly written by a corporate drone. The fish is USDC-approved and all local, except when flown in from their 'native habitats'. Really? USDC fish inspection is TOTALLY voluntary and means nothing, and when is a fish flown in from a non-native habitat? The copy goes on to try to frame the restaurant as local, even though it's a multi-state chain that came in from elsewhere.

The next part of the class was ServSafe, the 'microworld'. Pathogens are microorganisms that are either toxic or give off toxins or come in the form of bacteria, viruses, parasites or fungi. Viruses beat bacteria simply due to the norovirus, most famous for making everyone sick on cruise ships. Common bacteria like e. coli comes strictly from an animal's intestines -- any contamination in ground beef is strictly from poor practices and sanitation, a human behavior, not natural circumstance. The fact that our regulatory agencies stress overcooking meat rather than cracking down on processing plants is a scam being perpetrated on the general public.

Another bacteria, salmonella, is so common in poultry simply because of the filthy way the birds are raised and slaughtered. A full 50% of poultry on the market is contaminated, but in studies of individual brands, the big brands go upwards of 90% and the smaller, more artisanal brands go towards 0%. Totally preventable if it's a priority. A new issue emerging is salmonella-tainted eggs: the birds are SO contaminated that their ovaries contain the bacteria, so they pass them on to a small percentage of their eggs.

Parasites are not so common. The big one in people's minds is trichinosis, but a case has not been discovered in commercially raised pork in over a decade. Always ordering your pork overcooked? Maybe you should reconsider the flavor and pleasure you're sacrificing for an unfounded fear, guy! The official government line is 'do not eat sushi for fear of parasites.' Ridiculous -- the official government line should be to regulate the hell out of cheap-ass fish! (The picture above is the 'causative agent' of trichinosis, the bit that actually burrows through your flesh to plant eggs. Pretty creepy!)

After a laughably lame video about everything we just reviewed, Richard briefly got into 'Product Life Cycle'. Restaurants, at the heart of it, sell services, which happen to involve food. People don't walk away with food, they walk away with memories of an experience, of which food is just a part.

Services are different than tangible products -- even after the customer pays for it, they do not own it. If something is wrong with it, it can not be returned or replaced -- it happens in real time. The fact is that most customers will not complain about poor service -- they will just choose not come back.

Unlike manufacturing a widget, there is a great deal of variability that needs to be accounted for in order to deliver satisfactory service. The main ingredient -- the employee -- is a wild card. The variety of customers, from regulars to insane people, are another. The food that comes into the establishment from a variety of vendors is yet another.

You can't keep an inventory of service -- you either have it or don't at the time you need it. Everything is time critical, and your distribution channel is limited. You can sell widgets all over the world, but the food and service you pump out in a restaurant is limited to in house customers and those in delivery range.

Introduction to ServSafe, Services Marketing (From the NY Times to Food Porn)

The class kicked off inna Thursday stylee with 'In the News'. I brought up that Coca Cola recently dropped 'classic' from the name of their flagship product. Twenty three years ago they made one of the biggest marketing bungles in history, and only today can they really lay it to rest.

Starbucks is reacting to the economy not tolerating $6 coffee and introducing "value meals" to compete with McDonald's McCoffee concept. They've been waffling a little, and it has not been announced what the price point or the components of this deal will be. On a side note, Long Island Jenni told an anecdote of someone she met who owns 17 McDonalds franchises in and around NYC. It seems he has not added the McCoffee concept to his stores because a) he feels that people don't go to McD's for coffee and b) it costs him $100g per store to install the elements necessary to sell the coffee.

The dining section of Wednesday's Times was pored over. An interesting article about the 'Biggest Loser' TV show tells how they show the contestants working out and going crazy but never eating -- in reality, they're are put on unsustainable and unhealthy crash diets to achieve to most dramatic effect for TV, but when the show is over, they are left to figure out food for themselves and most fail and gain weight -- this entertainment that banishes food serves to make food into pornography, as I noted in class about this article from Restaurant News. It seems the Heart Attack Grill in Arizona dresses up waitresses as 'sexy nurses', serves up 'quadruple bypass' 2lb burgers and fries cooked in lard, and if you finish that burger you are escorted out of the restaurant in a wheel chair. Oy. People say they want healthy and yet places like this thrive.

Finally, a few weeks ago we mentioned a toilet that was shot at a Carl's Jr in Utah. Well now it seems the restaurateurs are milking it for all it's worth and holding a funeral for said toilet. God bless America.

Then we got to ServSafe. ServSafe is a national exam on food safety and preparation given by the NRA (that's the National Restaurant Association, silly!) It's certification is generally recognized nationally, but it is up to local authorities to require it. In NYC, the city Department of Health wants dat money and requires it's own Food Safety Handler Certificate. NYC's guidelines are not that different than ServSafe, it's all politics. I already have the city certificate by doing a ridiculously easy program on line and a multiple choice test at a dirty city office.

I won't go into detail about ServSafe on this blog. Today we watched an introductory video with some incredibly unconvincing acting about the basics - food can be adulterated by three groups

• Physical - glass, debris, wedding ring
• Chemical - cleaning fluid, soap, perfume
• Bacterial - fungi, viruses, organisms

It's that last one that is the big mamajama. An outbreak is when one or more people get sick at the same time from eating the same food at the same establishment. The video predicts doom and death and 100 years of bad luck to any establishment who has an outbreak, so you better go spend a whole lot of money on getting your ServSafe certification!

Richard passed out a number of student business plans for the class to look at -- this will be our final project. We have our mission statements and concepts, and a few menu items to start, but the business plan is the packet that will be the main tool to pry the big bucks from investors. Some were very professional, but I took some pleasure in pulling out the crappiest ones. They literally looked like they were made by 4th graders, with a page of clippings of uniforms from a restaurant supply store, with the line, "We will have uniforms like these because uniforms are important in creating the image of a restaurant." Wow. This guy must of spent his youth growing up behind the counter of a KFC.

At the end of class, Richard ripped through some basic concepts of service marketing.Basically, the client tells you everything you need to know about your business, from what you sell, how you sell it, where you are, the color of your walls, the finishes on your plating, who you hire and fire, when you go to the bathroom, etc. Of course, they may lie (I want you to be a 100% vegan organic raw burger joint, but I ain't gonna tell you about how I'm lovin' McD's on the sly) or don't want to talk to you. Simply, the client determines product and services, and it is up to your communications to both interpret and reflect that back in a profitable way.

Richard sketched out a brief history of marketing in 4 phases.

1. Originally, it was all 'pull'. Business was product centered. We do this, and if you don't like this, well, go somewhere else, we're not for you.
2. As competition increased in a more communications-heavy world, a 'push' strategy emerged. "Hello! We got this here! Come in!" The illegal vendors selling yo-yos in the subway is pure push strategy.
3. Third, the push was taken to the extreme with the 'promotional' strategy, which looks to influence the behavior of the client. "Don't think you need our thing? Well, we have a 2 for 1 sale for our thing!" My dad was old school, and fell for coupons for shit he didn't need at a heartbeat.
4. Finally, the 'marketing' strategy -- determining the needs and wants of the client, and meeting them. The umbrella dudes who pop up out of the concrete the second it starts raining and mysteriously disappear when it stops is purely driving by marketing strategy. "We're a whore for your money! I don't care what I do, tell me what to do!"
   

And on that note, I'll see ya Monday! Have a good weekend, friend.

Introduction to Marketing

The day started off with odds n' ends, the class' restaurant experiences since we last met. Lenin-pisser was at Cafe Lulu in Brooklyn over the weekend, and while dining, there was a horrendous crash in the kitchen and several people shouting, "Kill it! Kill it!" Mmmmm, delicious. Russian Pam Anderson brought up the news about Tavern on the Green, about how despite the fact they are the 2nd highest grossing restaurant in the country, they're probably losing their lease from the city.

Another student spoke of an article about crock-pot cooking, a new fad in times of lowered economic prospects. This reminded me of the crock pot I found in an old farm-house I was invited to cook at for a weekend over the summer. There were piles of crap from the 70s there, and the thing that stood out was the crock pot (pictured above) -- all it is is a slow cooker!! You can use any pot with a cover and wack it in an oven at a low temp and -poof- no need for another piece of equipment. Silliness. What is old is new again.

The next part of the class was dedicated to literally deconstructing the menu of LI DeNiro's family's restaurant, an Italian restaurant and pizzeria. The original menu is just a big friggin' mess. It's 6 pages, 100s of items, and a border of crammed, garish close-ups of food which gives the impression of poorly-composed piles of noise. It seems items were added chronologically since the place opened in 1965, without too much sense or clarity. Spelling mistakes abounded, sections broken over multiple pages.

By taking photocopies and cutting them up and pasting them, it wasn't that hard to make it make sense. However, if I was answering to an old-school off-the-boat pizzaman whose business has been just fine without the menu rejiggering, it may be a challenge! Just removing 15% of the items would loosen up the menu, a lot of dishes who use the same ingredients in different combinations. Veal 10 ways -- really?

The last part of the class was an introduction to marketing.Richard presented us with a simple 2 page mini-case study of some wealthy individuals who open a luxurious Asian restaurant in a small town because they were tired of traveling 90 miles to the closest city to get the food they liked. Unsurprisingly, the place flops and when they hire marketing consultants who tell them that the market in the town is not big enough to support this concept, they fire their manager and hope for the best. They soon go out of business and get bought out, and the new owners turn it into a family steak house with great success and live happily ever after.

The moral of the story -- it all starts with the wants and needs of the client. You ignore that at your peril. If you want a restaurant that serves what YOU want, cool, but what YOU want better line up with what the client wants. And off we go!