CONCEPT DEVELOPMENT

After studying this lesson, you should be

able to:
Identify ideas for planning and
designing foodservice and lodging
operations;
Describe the needs of customers;
 Explain location factors;
Describe the industry maturity and its
competitive positions;
 Identify major problems and risks in
lodging and foodservice business.
GENERATION OF IDEAS

IDEA GENERATION
* Planning and designing a lodging or a
foodservice operations begin with ideas.
* The major considerations in generating
ideas are the needs of customers in the
past,present and in the future.
 * The generated ideas in the past could be
revived and modified to cater to the present
needs.
* Ideas could emanate from present needs
such as in the following: working mothers have
become very aware of the value of time. Thus
there is a demand for prepared food items for
the family.
 * One idea for the future is the use of
robotics to prepare the room and food
for the guest.
Foodservice
Idea - enjoying companionship and
pleasure of drinking coffee
Concept- coffee houses or cafes that
will be famous for their convivial
atmosphere, where one could sit at a
table, meet friends and discuss the
affairs of the day.
Idea - combining film and food.
Concept - casual dining with burgers,
pizza, pasta and sandwiches in a
renovated theatre where every other
row of seats will be replaces with long
tables for diners/movie goers.
Lodging
Idea - an inexpensive lodging place for
students and travelers.
Concept - a medium sized hostel
operated by a sorority in a university
campus in the suburb close to
transportation routes.
REFINING THE IDEAS
To help posh and refine these ideas,
certain elements are required such as
the following:
 A study of the specific needs of the
customers in various types of lodging
and foodservice establishments.
Information of the site where the
establishment is to be located.
Technical knowledge about lodging
and foodservice management.
 Skills in the art of hospitality in a
specific culture.
 Knowledge of current trends in the
hospitality industry.
CUSTOMER NEEDS
Customer Behaviors, Foodservice and
Lodging Trends

Characteristics/ Foodservice and Lodging

Behavior of Customers Trends
Quality-conscious Operations that not only satisfy
but also visually delight the
customers.
Process-oriented See-through or open
institutional kitchens,
bakeshops, winery
Value-conscious Combo meals, discounted
room prices, eat all-you
can
buffets
Time- conscious Fast food restaurants,
convenience stores, drive-
through, delivery service,
computerized reservation
system

Highly- informed Electronic Info(computer)

descriptive menu cards,
food levels
Health and Nutrition- A variety of foods in
conscious restaurants, organic and
natural foods, fitness
facilities, spa

Environmental-conscious Proper solid waste

management, biodegradable
disposals.
Global taste Proliferation of Italian,
Japanese, Mexican,
American and other
Restaurants in Metro Manila,
a cycle of
service for the hotel guest
SITE SELECTION
 Theidentification of the location is equally
important to be studied at this stage.
 Thegenerated ideas/concept can be
located in urban properties, sub-urban
places, near the airport, seaport, land
transportation terminals, resort area , on
the highways, sites or pilgrimages, and
tourist destination.
OTHERS ELEMENTS FOR CONSIDERATION
Technical Elements to Help Refine Ideas
PRELIMINARY INFORMATION FOR
THE FEASIBILITY STUDY
INTRODUCTION
In this stage of organizing the
generated ideas, it is good to rely on a
more systematic process of gatherings
the required information. The
following can help the planner in
putting the information together in an
orderly and coherent form.
A survey of existing foodservice and lodging
facilities in terms of the industry maturity
and competitive positions.
 Defining the market.
 An assurance that the business concept
conforms with objectives of governmental
plans and policies.
 An information of major problems and
risks.
SURVEY OF THE INDUSTRY MATURITY
According to Arthur D. Little Inc., a USA
management consulting firm, industry or product can
be characterized by four phases:
embryonic,
growth,
 mature,
eventually be characterized as vintage.
DEFINING THE MARKET
A study should be undertaken to find out whether
the product or service to be sold has a market in the
chosen geographical area.
1. How many prospective customers are there?
2. What is the demographic profile of the market
segment?
3. Will the demand for the product or service be
greater?
4. What competition exists in the chosen area for
the product or service?
GOALS AND POLICIES OF THE GOVERNMENT
The business concept should conform with the goals and
policies of the government.
The major legal forms of organization are the following:
* Sole proprietorship is a business owned and operated by
one person. The owner and the business in most instances
are the same.
* Partnership is a voluntary association of two or more
persons to carry on, as co-owners, of a business for profit.
* Corporation is a business organization that exists as a legal
entity.
MAJOR PROBLEMS AND RISK IN PUTTING UP A
LODGING AND FOODSERVICE BUSINESS

*High initial investment cost is required for

hotels and luxury type fine dining restaurants.
* There are foodservice operations which
require imported raw materials for its offerings.
* Some new start up business ventures often
involve a technically new process and design
that have not been fully tested
 *Powerful competitors could at an time, reduce prices to
capture the market.
* It takes approximately 5 to 10 years to resource capital
investment in lodging facilities. This is a long time to show
profit in the financial report.
* In the lodging and foodservice operations, vary often,
there is increase in labor cost without increase on
productivity.
* There will be problems arising from social and crowding
and competitions for scarce natural resources because of
overpopulation.