This document discusses strategies for service failure recovery in the restaurant sector through an Indo-US comparative study. It finds that in the US, 68% of strategies involve an apology along with compensation, while in India it is only 60% with an apology and assistance short of compensation. Customers in the US are more ready to return and recommend the restaurant after a service failure compared to India. The document recommends that Indian restaurants offer compensation for failures more often and improve empowerment and training for managers to better handle customer complaints.

1. strategies in the restaurant
sector : an Indo-US comparative
study.
“A solid service failure response is the
best customer loyalty program that any retail organization can have”
GROUP MEMBERS
Anish gulati
Deepak bhatt
Karan khara
Surya veer singh
chauhan
Urvashi mishra

2. 7 P’s for pizza hut
PRODUCT Pizza Hut follows a “multiple product
strategy.
 appetizers
 beverages
 desserts
 Pasta
 Pizza - Pan Pizza, Stuffed Crust
Pizza, Sausage Crust Pizza, Thin Crust
Pizza, Twisted Crust pizza

3. PRICE
Pizza Hut follows “A High/Low Pricing”(“Price
Skimming”)strategy as far as its new product are concerned
where it fixes the price higher than its competitors and then
gradually lowers the price below the competitor’s prices.
PLACE
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The first method of distribution used by Pizza Hut is delivery
customers to dine-in . One of Pizza Hut's largest competitive
advantages is its restaurant style facility
. The third method of distribution is Online ordering

4. PEOPLE

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Pizza hut have trained employees with them.
All the employer who are working there are skilled employees.
They always appear clean and well groomed.
They maintain the customer and employee relationship in good
manner. Deliver consistent standards of hospitality.
Pizza hut have a standard uniform for their employers
PROCESS
 The food manufacturing process at pizza hut is completely
transparent.
 The customers are invited to check the ingredients used in
pizza .
 Delivery on time or free next time.
 Take away refined carryout procedures to provide
faster, more efficient service rapidly expanded the delivery
operations throughout the country implementing combination
operations.

5. PROMOTION
 Advertising
 Sales Promotion
 Public Relations
 Events and experiences
 Coupons, Discounts.
PHYSICAL EVIDENCE
 They have a pleasing environment, nice
interior decoration which looks rich. Pizza hut
focuses on neat and clean environment.
Pizza hut Staff believes that they are
providing the superior quality to their every
customer.

6. Moment of truth: pizza hut
Greeting
 Taking Orders
 Menu
 Delivery
 The bell- Bye & Thanks.


7. Customers perception about
intensity of service failure

About 48% of the customers in India feel the
intensity of their problem encountered in restaurant
is extremely serious, US its 41%.

Managing customers interest and making them feel
their interest is close to heart is a high priority for
Indian restaurant, as compared to US.

This leads to a state of fear of confronting an irate
client, motivational training and support, team
structures & team leadesr can be a way out.

8. Strategies employed for service
failure recovery
In India 60%- apology & offering assistance short
of compensation.
 In US 68%- apology & assistance along with
compensation.
 Significant to relate lower percent of complaints in
US.
 Double the % of aggrieved clients in US ready to
return to same outlet and recommend as
well, compared to India.
 Indicative of compensation an important service
recovery strategy, points towards poor
empowerment environment in Indian
restaurant, lack of laid down system to handle
customer complaints.


9. ZONE OF TOLERANCE
Desired expectations:
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Customers typically hold similar desired expectations across
categories of service.
A customer’s desired service expectation for fast food restaurant is
quick, convenient, tasty food in a clean setting.
Adequate service expectation:
It varies for different firms within a category or subcategory.
For ex. Within fast-food restaurants, a customer may hold a higher
expectation for McDonald’s than for Burger King, having
experienced consistent service at McDonald’s over time and
somewhat inconsistent service at Burger King.

10. RATER
Reliability
Assurance
Tangibility
Empathy
Responsiven
ess
Perform
services right
& accurately
Employee
behaviour
Employees
appearance
Problem
solving
Providing
services as
promised
Provide
services on
time
Knowledgea Comfortable
ble
environment
employees
Understanding Performing
needs of
services right
customers
the first time
Correct
mistakes &
errors
courtesy
Ingredients of
food
Caring attitude Providing
towards
services at the
customers
right time
Timely home
delivery
attitude
freshness
Individual
attention
hygiene
Convenient
business
hours
Hospitality
Maintaining
error free
records

11. SERVICE QUALITY GAPS
Gap1: Customers’ expectations versus management
perceptions
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This gap arises in case of pizza hut during peak hours.
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Generally a single pizza takes 7 minutes to get prepared but at peak
hours service provider takes 3 times more than the usual time.
Gap2: Management perceptions versus service specifications.
Gap3: Service specifications versus service delivery.
Gap4: Service delivery versus external communication.

This gap arises when the services are not provided as promised.

For example, in one of their ads they talk of pizza in just Rs. 199, but
the actual cost of that pizza is more than 199 after including VAT &
other taxes.

12. Customer’s perception about
recovery strategy

Will add later

13. Example of Service Recovery
Strategy by various Restaurants
A solid service failure response is the
best customer loyalty program that
any retail organization can have.
 McDonald’s replaces your burger if
you do not find it good without any
questions asked.
 Rs 300 discount if pizza is not
delivered on time by pizza hut.


14. Some Service failure very
common in Indian Restaurants
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Slow Service
Foreign object in
food/beverage (insectrelated; human-related; non
human related)
Dirty cutlery (greasy)
Dirty surroundings
(animals; insects; dirt)
Dirty seating condition
(cutlery left by previous
customer)
Bad odour (toilet, drain)
Poor seating design
(crowded; broken table and
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chair)
Dim lighting
Inaccurate menu list
Inoperative machinery
(water
dispenser, roaster, steamer
)
Inoperative air-conditioning
(poor ventilation)
Offensive staff’s
appearance (sweating;
without apron)
Offensive staff’s behaviour
(sweeping; smoking)

15. Some of Service Failure
Techniques
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Correction
Acknowledgement
of the problem
Apology
 Empathy
Reinstatement
 Symbolic
Assistance
Atonement
Replacement
 Follow-up
Management/
 Compensation
employee
intervention
 Empowerment
Explanation of the  Coupon
reason for the
 Free food
failure
 Discount
Correction plus
 Refund

16. Service Guarantee
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Service guarantee builds trust in
customers which is very important for
QSVR Restaurants
Pizza Hut guarantee that if you are not
satisfied with your pizza, we’ll make it
right and return your money back.
Also if the pizza is not delivered Hot you
can always return the pizza.
Dominoes gives a 30 min guarantee of
pizza delivery
Point of Discussion:
Does giving Service Guarantee always benefit the

17. Customer Feedback

18. Conclusion
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Most of the Indian customers verbalise their
complain on the other hand In US customers like to
register their complaint
Most of the Service failure in India are immediately
dealt by an apology and offering assistance while
in US apology is followed by a compensation
The root cause of inefficient service failure
recovery is Indian managers are not empowered
enough to deal with situations, also there is no
fixed guidelines in most cases
Indian consumers do not return back to the
restaurant where a service failure has happened
while not true with US.
Indian customer often feel cheated during a service
failure while in US it is considered a one-off mishap

19. Recommendations
Indian managers should offer compensation
more often as compensation works better in
getting repeat customers.
 But before there should be manager
empowerment program and manager training
must be done.
 Slowness of service which is a major service
failure needs to be resolved by having more
operational efficient systems by improving
cycle time
 Also Indian managers need to understand
80% of customers’ problems are caused by
bad systems and not bad people


20. References
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http://retailindustry.about.com/od/retailbe
stpractices/a/retailcustomerservicefailure
recoverycornerbakery.htm
http://www.onlinereview.segi.edu.my/pdf/
vol3-no1-art9.pdf
“Service recovery strategies in western
based fast food restaurants: a structural
equation model test” by Ernest Cyril de
Run and Heriyadi Kusyarnadi
Services Marketing – By Zeithaml