Case Study  : Coyote Loco

Pr : Dr Manel Khadhraoui

By : Asma Amri
Different variables can affect the generation of revenues of a business
and therefore its profitability.

In this case, Elaine Alexander and her husband John, the coowners of
the popular restaurant Coyote Loco are evaluating opportunities for
revenue management.

Some factors are directly affecting profits, and some others are indirect.
All together will be deeply analyzed in this case.

So, let’s start by a short analysis of the 7Ps of Coyote Loco :

Product  : Coyote Loco is serving a variety of California-style Mexican

food, alcoholic drinks, and different beverages.

Price  : The restaurant charges medium prices for its food and drinks.

Place  : Coyote Loco provides its service within its building based on one
of the scenic Finger Lakes in upstate New York.

Promotion  : the restaurant has no specific promotion strategy

People  : Coyote Loco is employing local residents and students in their

twenties (the staff is lacking experience).

Process  : all the tasks are divided among Coyote Loco staff ; from the
greeting of customers at the entrance, to the reservation procedure, to
the serving and the payment process ...etc. All those tasks are combined
together to offer a good customer experience to the clients of Coyote
Loco.

Physical evidence  :

Servicescape Other tangibles

Facility Exterior Not mentioned
Exterior design
Parking

Facility Interior
Interior design (wooden
structure + yellow stars)
Equiment (tables + bar stools)
Layout (restaurant + bar)

When looking into the 7ps of Coyote Loco, many problems can be
defined. So here are the most important decisions that the Alexanders
should be taking into consideration in order to improve the profitability of
their business:

More working hours and more diversified menu : Coyote Loco provides
its customers with only lunch and dinner, however it can attract more
clients through including a breakfast formula in its menu : the breakfast
can be served from 8:30am to 10:30am, and it should fit all tastes and
preferences. At night, the restaurant should delay its closure time to
(10pm/11pm) so that it offers its customers more chances to enjoy late
dinners and parties.

A more highly qualified and experienced staff  : Coyote Loco is employing

students and youths lacking experience which can negatively affect the
overall performance of the business. So, it is crucial to hire more
experienced employees for a more flexible schedule, and to motivate
them in order to offer the best customer service and to deliver
satisfaction.
(the host should be cheerful and more professional, the servers should
be aware of all the details about the meals they’re serving and should do
more upselling …)

The

A more comfortable layout : the Alexanders should start thinking about

acquiring more space for their restaurant and managing the exisiting and
available one more efficiently. They need to reduce the stairs to the bar
and to have more empty space, more tables, and more bar stools =>
increase the seating capacity to solve the problem of turning customers
aways during peak hours which can make them lose their clients.

The interior design should be more attractive (good lighting, fresh smell,
air conditioning…)

Reduce the waiting time : the coowners of the restaurant should work on
reducing the waiting time from the entry of client to having a table, and
between the other steps of the service process (Drinks to order …etc) =>
That’s how Coyote Loco can increase its revenue from every seat hour.

Discounts on Mondays : According to Exhibit2 (Guest Arrival Patterns At

Coyote Loco) the number of arrivals decreases the most on Mondays, so
Coyote Loco can make discounts of 30% to 50% during that day so that
it attracts more traffic.

Charge Higher prices : The restaurant is charging medium to low prices

on its products which can negatively affect its image and the quality of its
service as all customers tend to associate low prices with low quality.
And that’s how it can gain more margins.

More communication with customers : Coyote Loco should increase its

communication with customers through social media networks
(Facebook, Instagram, Twitter…) and give them the opportunity to give
their feedback on the quality of its services so that they help it improve its
performance, as it has a difficult competition since there are many other
restaurants in that same location.

 In order to improve its revenue management, Coyote Loco can

follow the previous steps and take initiatives in the food industry, it
should be the first mover in that market in order to lead it and to
succeed its business.
And to minimize negative impacts on customers and staff, Coyote
Loco should , as mentioned earlier, increase its communication
with both parties and engage them in the decision making process.