Since the 1990s, fast foods-led dining out industry has transformed and continuously developed stimulated by making inroads of enterprise-type family restaurants which adopted advanced management skills.
The expansion of ding out industry and a sharp...
Since the 1990s, fast foods-led dining out industry has transformed and continuously developed stimulated by making inroads of enterprise-type family restaurants which adopted advanced management skills.
The expansion of ding out industry and a sharp increase in demand of family restaurants have led the industry to take the lead in the sales and market share by forming making their chains and to introduce various kinds of service to achieve them and to apply competitive marketing strategies. To establish proper marketing strategies requires product life cycle through accurate prediction of demand, so in this study, for an accurate prediction of demand of dining out industry and family restaurants, I predicted a demand with demand function and curves through Logistic model and Bass model which has not been used until today.
I followed procedures below to analyze actually in the study.
First, I used a survey of household spending from the National Statistical Office and materials from Foods Distribution Yearbook for a time series data of dining out industry and family restaurants, in case of dining out industry, the range of the time series is from 1975 to 2003 and in case of family restaurants, the sales materials of main family restaurants from 1998 to 2003 were used.
Second, I took regression analysis based on Bass model and calculated drawing power-related indices, innovation coefficient(p), imitation coefficient(q) and Gross Potential Demand(m) and got L(Gross Potential
Demand) which minimizes SSE by Logistic regression formula and a, R. According to the values, I predicted demand of Bass and Logistic.
Third, in case of family restaurants, we had only 6 available materials (1998-2003) of total sales of them to assume Bass model and Logistic one so I made a total sales-change scenario by bootstrapping method to create the total sales scenario of family restaurants. I discovered each annual profit ratio of main family restaurants for the past six years and created 1,000 times scenarios. After that, I repeated ten times the extraction methods of 29 sales change ratio.
Fourth, based on this, I calculated innovation coefficient(p), imitation coefficient(q) and Gross Potential Demand(m) of Bass function and also inferred demand by using α and β of Logistic function.
The result of this study is as follows in case of dining-out industry.
Firstly, after the presumption of to what new dining-out industry extends during the future 40 years based on Bass model, a point of inflection where an increasing rate of new sales against Gross Potential Demand is the highest will be in 2028 based on 2003, and after, it gradually decreases.
Secondly, I assumed a time that critical demand takes place with Logistic model. The total cumulative sales among Gross Potential Demand will reduced to the half of it in 2028 based on 2003.
Family restaurants are as follows.
First, in case of Bass model, I used average-level of innovation coefficient, imitation coefficient and Gross Potential Demand from the scenario produced by Bootstrap and presumed that the highest point of inflection of an increase rate in new sales against Gross Potential Demand would be made in 2020 based on 1998.
Second, in case of Logistic model, I presumed that by using α and β in the scenario made from Bootstrap, a point of inflection of (-α/β) where cumulative sales become the half of them among Gross Potential Demand would be made in 2022 based on 1998.
From the results, I discovered dining-out industry and family restaurant industry are on the growth in terms of product life cycle and suggested strategies for the growth based on this.