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News and comment by a journalist based in London

Cowboys and Indians

Indian restauranteurs shouldn't worry about the McIndian

This first appeared in Tandoori Magazine, June 1998.

THE BEST form of marketing is a good product, according to the US marketing mantra. But US business, having conjured up an array of good and innovative products - all those carbonated soft drinks, breakfast cereals, burgers and fries, is widening its focus these days.

Over in the US, the product has become just one element within the company or brand’s overall public image. The sixty-four million dollar question for US restaurateurs - and, of course, the right answer delivers much more than this - now turns on how best to create the perfect marketing mix. US restaurateurs tear their hair out getting the elements of design, media relations, advertising and marketing right. This, they say, is the key to ensuring that their oh-so-fickle public carries on consuming.

Meanwhile, back in Europe, marketing has a mixed reputation. Many restaurateurs remember the 1980s, those years of designer decadence, with horror. But, as the matt-black decade boomed and busted, and marketing budgets rollercoasted accordingly, even the most skeptical came to realise that, away from the hyperbole, the creative types with the colourful ties and mid-Atlantic accents possibly did have something useful to offer.

The idea that customers become "service savvy" as eating out turns into a regular activity became generally accepted.

By 1994, the US National Restaurant Association (NRA) could reveal that 25 per cent of surveyed operators thought that service was the most important factor of the dining experience for their customers - even more important than the quality of the restaurant's food.

Today, many Indian restaurateurs would agree. As standards rise, the overall context, the total dining experience, the restaurant's ambiance, the perception that the customer has of the company, assumes greater and greater importance.

But, of course, the Americans are ahead of us. They’ve already used their communications expertise to take over much of the world’s restaurant markets.

According to the NRA, between 1987 and 1994, the number of nondomestic US units increased by more than 100 per cent. By 1995, the top 100 chain-restaurant companies were operating more than 16 per cent of their units outside the US. Today, there are approximately 160 US foodservice companies operating internationally.

The food is cheap; the food is predictable. So, the concept works a treat. While its haute-cuisine may have some way to go before rivaling Europe's or Asia's, US Quickservice restaurants (QSR) have become established as the world's favourite taste.

Take a dozen capital cities; walk down their main thoroughfares. What they all have in common is the big neon signs, the golden arches, the smiling colonels, advertising that finger-lickin', good ol' US of A taste.

And what accounts for this success?

Of course, many customers like the idea of buying into a slice of something new. Many like the fact that US companies deliver world-standardized food, value and cleanliness.

But what really gives US companies the edge over locals is the experience gained while competing back in the domestic market. Able to try out their marketing mix on the emerging US middle classes in the 1940s and '50s, US restaurateurs know what marketing mistakes to avoid as they enter, say, the Chinese or Indian markets.

Their tried-and-tested concepts suffer minimal startup problems and take hold rapidly. They see off inexperienced local businesses with relative ease.

With this in mind, it's tempting to predict that the McIndian is just around the corner. The 80 per cent increase in the US Asian population between 1984 and 1994, the surge in US spice consumption - up 38 per cent over the same period, will inevitably result in US foodservice companies swamping the worldwide ethnic restaurant market.

Well, perhaps. But, now that the formula is established, the McIndian is as likely to come from a canny EU or Asian company as an American one.

In any case, standardised chains, while continuing to do well, are unlikely to be killer applications in the future.

Over in the US domestic market, the greatest opportunity - or threat - for restaurateurs currently is technological change.

As increasing use of computers leads to a growth in the work-at-home market, the trek from office to restaurant for lunch is disappearing. On-line grocery food shopping is becoming more prevalent. Customers place orders for groceries and food via computer and have them delivered.

And when they do eat out, picky information-age customers demand both high-speed and high-quality service.

As before, US restaurateurs have an advantage when these changes trickle through to the nondomestic market. Indian restaurateurs need to be prepared for this.

But it’s important point to note that as the acceleration in the availability of information continues, as customers become their own experts, able to work the Internet and other information systems to their advantage, traditional marketing will become increasingly redundant.

Non-US Indian restaurateurs can take comfort from the fact that the best kind of marketing may turn out to be a good product after all.

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