THE MARKETING VALUE OF BRAND AND LOCATION OF AN EATING ESTABLISHMENT

Abstract

Eating out is a popular past time among Singaporeans. As a result, the food industry offers lucrative business opportunities. However, it registers the highest rate of business failure too. It is reported that on a worldwide basis, every three out of five restaurants failed. To gain a foothold in this feverishly competitive industry, most food businesses capitalize on strategic locations. Others emphasize on building up a strong name for the goodwill it brings in the long run. Both strategies are sound, but which is better? This study therefore proposes to examine the effect of brand and location cn the consumer's choice of an eating-place, along with other marketing variables. Based on the new economic theory of Lancaster and the market share model of Cooper and Nakanishi, the proximity of an eating establishment is found to be more significant than its brand name in affecting the consumer's choice of eating-place. It is hoped that the findings may be useful in providing suggestions for the marketing strategy of a food business.