Issues: Eat2Eat as a restaurant reservation service is experiencing difficulties in penetrating the personal market in order to obtain a critical mass. This barrier is caused by a resistance to use new technology, fear of supplying personal information on the web and a lack of marketing promotions due to funding shortages. Furthermore, obtaining additional funding is becoming a concern due to poor financials, which is common for internet companies in its infancy.
Customers: Customers are attracted to using Eat2Eat acting as an infomediary [Appendix A] for restaurant reservations providing value added information such as type of cuisine, price range and reviews for a wide variety of restaurants. 1st Order Effects of E-Markets is evident with reduced transaction cost in booking a table in real time and reducing transcription errors. The main barriers to customer adoption are resistance to change existing booking procedures, giving personal information online and lack of awareness of Eat2Eat.
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Restaurants: Restaurants are motivated to sign up for Eat2Eat to attract a larger market of potential customers, keep up with the competition and outsourcing the reservation system to a third party. Barriers to adoption are the commission fee and the fear of being exposed with negative reviews to Eat2Eat members. Recommendations: The focus of Eat2Eat should be to obtain a critical mass of restaurants and customers. One critical area to increase customer adoption is to reduce the fear of supplying information on the web.
This can be reduced by not forcing customers to put in more information than necessary for a restaurant reservation which should only entail a name and phone number. Although other information will be useful for web analytics, it should be optional and can be entered after a customer is more familiar with the Eat2Eat website. To aid customers in transitioning to new technology, usability studies should be conducted on the Eat2Eat website to ensure that the user interface is not cluttered and easy to use. In addition, Eat2Eat’s can increase its customer value proposition by adding Service Functionality eatures such as adding maps and directions and reservation reminders [Appendix B]. The marketing strategy for Eat2Eat is an area for improvement. Eat2Eat should not be relying on traditional marketing channels such as a newspaper but to embrace social media and online marketing campaigns. This is a less costly alternative and people who are already online will be much more likely to click on a link than those who have to remember the website domain name in a newspaper or credit card statement. To increase revenue Eat2Eat needs to leverage the effects of 2nd Order Effects of E-Markets.
This is a huge opportunity to work with the restaurants to collect customer spending and eating habits. Imagine the value of business intelligence that can be provided if Eat2Eat was able to increase a type of customer’s chance of ordering wine, dessert or a more expensive entree. To make this happen, Eat2Eat can decrease commissions to restaurants and focus on garnering critical mass and mine as much information as possible on customer behavior. Otherwise, based on the current financial statements it is difficult to justify investments in Eat2Eat.