Finding a recognisable point of difference is vital for restaurateurs in an overcrowded market, writes Andrew Mckenzie.
If you search for Thai food on the Newtown precinct website, you’ll find 27 options—most along the single strip of King Street and Enmore Road, and all within walking distance of one another. So, how do they compete?
“People are always saying there are a lot of Thai restaurants around King Street,” says Greg Richardson, co-proprietor of Chedi Restaurant on King Street. “But that is not necessarily a disadvantage. If you want Chinese food you go to Chinatown, or for Italian food, Norton Street.
It can be an advantage.”
So how do you differentiate yourself from competition when you’re all essentially offering the same thing? How do you find a point of difference that builds your market share with so many similar offerings?
According to the classic marketing school definition, consumers make their choice based on the four Ps: Product, Pricing, Promotion and Placement. But what does this mean for your restaurant sitting alongside a lot of competition?
Franco Favaro, founder and proprietor of one of Adelaide’s best-known Italian restaurants, Chianti Classico, says it is essential that you are unique if you want to keep people coming back to the restaurant.
When Franco first opened Chianti Classico 24 years ago it was into an increasingly crowded market of Italian restaurants and it was a challenge to establish a good reputation.
“Within six months of opening we were in trouble,” he says. “If we didn’t do something quickly we were simply going to be out of business. We decided to completely focus on our customers and provide exceptional service. Food is always important, but I think it is stand-out service that people talk about later.”
A home-style, personal service is what Chianti Classico is now known for, but it took some time.
“Word of mouth is always the best marketing any restaurant can have,” he says. “To achieve this we were always prepared to go to the next level of service. Our menu might not have been that different to our competitors, but the service always was.”
For example, Franco says one customer always requested “steak and chips” even though, unsurprisingly, it wasn’t on Chianti’s menu.
“More than 24 years later that man is still a regular customer and has become a close friend,” Favaro says.
But service is not the only way you can differentiate your restaurant.
When Michael Mah first founded Melbourne’s Lemongrass restaurant some 18 years ago, Thai food was already becoming popular in Australia. However, having grown up in South East Asia he knew that there was far more to Thai food than was currently being offered in the market.
Thai cooking came in a variety of categories and the most exclusive variety of all, ‘Royal Thai Cuisine’ was a world away from what many people at the time thought of as Thai food.
“As far as I know, when we opened 18 years ago we were the only restaurant in Melbourne offering the Royal Cuisine style,” he says. “Most people don’t appreciate that there are five or six different styles of cuisine in Thailand, and Royal is the most developed and elegant. Even throughout Thailand, it is only available in a few select places and is still quite upmarket.”
Mah says he adopted this style for Lemongrass because of an association with the “high priestess of Royal Thai cuisine”—the late Boonchoo Pholwatana, as well as well-known media personality and former food and wine director at Bangkok’s Oriental Hotel, Chalie Amatyakul.
“We have been very fortunate in securing the services of several chefs who trained in Bangkok under Boonchoo, which is really the pinnacle of Thai food training. We remain one of very few restaurants that specialise in this style and it is quite a valuable upmarket position.”
However, Mah admits it’s a challenge to educate the market and claim they still need to ensure the Lemongrass menu does not get too far ahead of the tastes of its customers’ often rudimentary knowledge of Thai cuisine. They also try to communicate with the market through periodic special promotions.
For example, last year Lemongrass Thai celebrated its 17th year in business by introducing a guest chef to the kitchen—Boonchoo’s daughter, Ancharee—which garnered immediate press coverage and led to a Restaurant & Catering Association award for best Thai restaurant in Victoria.
“Being in Carlton, there is a lot of competition, but we have improved our menu and service over many years to be widely recognised. We have a unique position in the market.”
Building a unique position quickly can be challenging, particularly when you are taking over an existing restaurant site.
Greg Richardson owns Chedi Restaurant with his wife Shanya. Even though Shanya ran her first Thai restaurant in Sydney in 1990, the couple took over the current site from another Thai restaurant just two years ago. For the previous decade, they had been the major distributors of Jurlique cosmetics in Thailand, giving them strong marketing experience from their close work with some of the top hotels throughout South East Asia.
Richardson says when they took over the restaurant they were very aware of branding and consciously tried to differentiate it from its
“We realised there were lots of restaurants called ‘Thai that and Thai this’ so we didn’t want to include the word in our name. Having just arrived back from Thailand, we thought people would recognise our logo and the Chedi name as being Thai. In Thailand, a chedi is a Buddhist stupa, and a universally recognised symbol. But back in Australia, some people didn’t recognise it and mistook the brand for an Indian symbol. We’ve since been placing a greater emphasis on the Thai element, because although we are a world away from many of the Thai takeaways that occupy King Street, we are still a Thai restaurant.”
Richardson says they initially adopted a number of strategies to entice people to trial the restaurant, including maximising Google searches and introducing local sponsorships like the Newtown Jets rugby league team. It has also tried promotions with local theatre and music centres, such as the Seymour Centre and The Vanguard, offering patrons discounts and complimentary entrées.
At the end of it all, Richardson says he doesn’t believe advertising plays a significant role in creating a point of difference. He agrees with Favaro of Chianti Classico that delivering good service is the key to customer loyalty. In this vein, Richardson applies some of the expertise developed serving international hotels throughout Asia in his restaurant—particularly in relation to offering complimentary products and services.
“Service is everything,” he says. “The food has to match the service, but it’s service that people talk about later.
“An important part of this for us is the simple things like saying thank you to our regular customers with something complimentary. This might be just a coffee at the end of the night or an entrée at the start. People like to feel appreciated and they certainly like to get something for free.”
However, location also differentiates a restaurant. Are you better off to be directly alongside your competition, or moving further away? Favaro says that when Chianti Classico first opened on the west side of Adelaide at Light Square, they thought the area would take off as a restaurant destination, but their prediction was slightly wide of the mark.
“We needed to become a destination point and although we succeeded, it was hard work. I don’t think it was an advantage to be away from our competition.”
After eight years in its original location, Chianti Classico moved to its current location in the heart of Adelaide’s “eat street” and within a short walk of four rival Italian eateries.
“Within two weeks [at the new location] we had doubled our turnover in a site that was half the size,” Favaro says. “Competition never concerned me. It can be very positive.”
However, Michael Mah of Melbourne’s Lemongrass Thai says there is a definite downside to having too many of the same types of restaurants close by.
“Even though 98 per cent of our customers would never go to the cheaper Thai restaurant down the road, it does tend to put some downward pressure on our prices,” he says.
“The extra competition also pushes some restaurants to marketing measures that can damage the entire area. For example, we now have spruikers out the front of restaurants, which I think damages the whole Lygon Street restaurant district.”