The Research of Service Innovation on the Base of
Catering Service Process
——Taking Haidilao as An Example
Zhiyuan Zhang, Lijuan Xu
School of Economics and Management
Beijing Jiaotong University
Beijing, China
14120733@bjtu.edu.cn
Abstract—People living standards have been improved as the
service industry advancements, which has become an important
part of national economy. Catering industry as one of the service
industry has its unique service management model. With the
development of economy, catering industry has achieved
significant development, but few breakthroughs in service
innovation. Especially the service process is mostly still in meal
service, which leads to catering service homogenization. Through
ten years of struggle, HaiDiLao, Sichuan hot pot brand business
model has developed into a big scale food chain relying on its
effective service innovation process. This article selects HaiDiLao
as the research object, finds the reasons of its rapid development
by analyzing its unique service process. And finally the author
makes rough study on how to implement service innovation and
copy the successful service model to other catering, thus pushing
overall development of service industry.
Keywords—Service Process; Service Innovation; Service Profit
Chain; staff management
I.
INTRODUCTION
Despots are everywhere in China's catering industry, not
only some foreign brands like McDonald, KFC, but also a lot
of domestic enterprises which is sufficient to combat foreign
brands, such as Little Sheep, Xiabu Xiabu and so on. These
catering industries have achieved a rapid expansion through a
standardized business model. But some problems coming with
the model like low table turnover rate, lacking food innovation
and superior customer service etc affect the enterprise
operational efficiency, reduce its core competitiveness,
moreover result in stagnation followed being caught up by
others, which makes these catering juggernaut headache. So
the important of “service” stand out, especially the innovation
in service become overarching concern for all catering
industry.
II.
THEORETICAL BASIS
A. The Concept of Service Innovation
Service innovation is to creative a new content to make
customers feel different from previous [1]. This innovation can
provide users with new experience which can’t be offered
because of the technique or resource limitation. In terms of
economy, service innovation is an economic activity to
978-1-5090-1102-5/16/$31.00 © 2016 IEEE
increase additional value of tangible or intangible products by
the nonphysical manufacturing means. Nowadays IT is
developing so quick that gradually lead to homogenization of
products’ technologies and functions, the restaurant can’t
achieve great breakthrough by means of improving the quality
of products and reducing production costs. So service is an
important successful weapon for enterprises in competitive
market.
Catering service innovation means in order to get an
invincible position in the future market competition, the
catering industry must pay more attention to innovation, and
then study how to achieve the innovation, finally apply into
the management decisions which conform to the service
concept [2]. Catering service innovation is multifaceted,
covering operation principle, management mechanism, serve
arts, dishes design, marketing approach etc.
B. The Significance of Catering Services Innovation
Catering service innovation is the key factor in the
development of catering industry [1]. The innovation can give
the consumers both benefits and delicious cuisine, namely
enjoyment of material and spirit. On the other hand, this
measure can provide the catering with huge profits and
sustainable development opportunities. Its mainly include the
following points.
1) The Nature of the Service Product Determine the
Necessary of Innovation
According to the theory of product life cycle, none of the
products are always popular, there is a certain time frame [3].
The catering services products are no exception. Different
consumers have different consumption tendency in different
periods. A recurring theme throughout all period is that the
product outdated or unable to meet consumer demands will
naturally be eliminated by the market. Market competition is
more brutal because the customers become more and more
mature and captious. If the enterprise wishes to occupy a space
in the society, the only way is to create esoteric service to
adapt the customers’ demand.
2) Service Innovation Can Meet Customers’ EverChanging Requirements
Innovations have to be carried out in order to meet
consumers’ demand and adapt the changes of consumption
environment. Along with the development of economic
globalization, people's standards of living have improved
quickly, the customers’ requirements become diversification
and individuation when they face the similar products.
Customs began to pay attention to practice consumer to find
their favorite. The content and purpose of catering service must
change to fit the new consumption patterns. The catering
service innovation is just to let the customers obtain the
memorable experience all the time.
3) The Influence of Service Process to the Catering
Industry
According to the study of service profit chain (Figure 1),
customer loyalty is the head-spring of obtaining profits and
sustainable competitive advantage [1]. The loyalty originates in
satisfaction. Whether the customer satisfied lie on the quality
of skill and function. Skill quality is means the output of
service process, that is to say the things that the customers
obtained during the service process, like the food’s color,
fragrance or taste.
III. THE CASE STUDY——HAIDILAO
A. Company Introduction
Sichuan HaiDiLao Catering Co. Ltd was founded in 1994.
It serves mainly Sichuan style hotpot while mixing the pick of
other style hot pot. The company has opened 137 restaurants
in Beijing, Shanghai, Xi’an, Zhengzhou, Tianjin, Nanjing,
Hangzhou, and Shenzhen etc [6]. The management delivers
the philosophy of “hands change fate”, and creates equitable
environment for each employee. It also implements humanbased management and affection management, to promote
employees’ value. It has the top priority of ensuring the
customer satisfaction by providing the best service and best
food. The company values innovation and encourages
personalized service. With all the service innovation,
HaiDiLao has successfully become a famous branding
enterprise.
B. The Service Process of Haidilao
The primary advantages of HaiDiLao are its service and
brand positioning. It’s known for its high-grade service but
Exterior: Customer
Interior: Staff
Operation strategy
Service concept
loyalty
satisfa
ction
productivity
Target market
Satisfaction
Service value
loyalty
Service quality
Income
growth
profitability
capacity
Workplace design
Quality and productivity
Job design
High service quality
Information and Communication
Lower cost
Reward and appreciation
Improve product
Suitable service tools
Fig. 1. Service profit chain
While function quality refers to the service process, namely
the staffs deal with the customer. So the staffs’ behavior,
attitude even their clothes will affect customers' perspective of
service quality [4]. It is necessary to respond timely, offer
delicious food and clean service facilities for a catering
enterprise. But if the enterprise wants to maintain customer
loyalty, it should realize differential and knowledge-intensive
service. This means that the enterprise should not only
guarantee the high quality basic service during meal, but also
establish a creative, comfortable and humanized service
process to satisfy the individual and personalized needs of each
person.
In conclusion, a perfect service process helps to improve
customer satisfaction, increase customer loyalty, reduce the
drawbacks and the detail error during the service, thereby gain
ongoing revenue stream.
Design service to meet
customer demands
Repeat sale
Recommend
managing with general price, which let many working families
and students enjoy the five-star hotel service and first-class
food. According to the latest ranking about hot pot shop in
Beijing City on Dianping.com(see Figure 2),we found that
HaiDiLao stands in the first place in taste, service,
environment.
A word has spread on blog, the earth people can’t prevent
the development of HaiDiLao. Speaking of HaiDiLao, people
would say highly of its service. Why? Because it not only does
fragmentary service details supremely well, but also forms its
own unique perfect service process. HaiDiLao service begins
before you enter the door, by the end of you going far away.
What they do make you feel enjoy God-like service all the
time. Many detail mistakes and service drawbacks can be
avoided by HaiDiLao perfect service management system.
Through field observation and interview, the author
summarizes its service process shown in Figure 3.
140
120
100
80
60
40
20
0
taste
service
environment
average
consumption
DongLaiShun
17.7
12.4
14.2
75.7
HaiDiLao
26.1
31.9
23.5
71.8
Little Sheep
23.8
19.2
18.9
63.4
KouFuJu
18.5
13.5
17
66.7
Dolar Shop
22.5
22.5
27.2
76.5
HuangChengLaoMa
21.6
21
22
125.6
Xiabu Xiabu
20.9
14.5
14.6
31.7
Fig. 2. The latest ranking about hot pot shop in Beijing city
Disinfect
sofa,Manic
passage,Di
ed
ure,recreat
sinfected menu, pen
Tablewar
ional
Tableware
e
facilities
Parking
reception
desk
custo
mer
arrive
go into
wait
seat
order
recep
tionis
t
say
hello,
Valet
Parki
ng
say
hello,
Confirm
booking
polish
shoes,
nail
salons,
snacks
ask
about
prefer
ence,
Guide
seat
offer
drinks
and
dishes
sugges
sion
backoffice
suppo
rt
suppo
rts
proce
ss
register
table,
fill in
message
Parking
vehicles,
placing
keys in
classified
s
clean
the car,
car key
manage
ment
system
reserva
tion
system
prepare
related
accesso
ries
and
dishes
busine
ss
inform
ation
manag
ement
system
dishes
invoice
serve
eat
pay
send,
report,
put
dishes
change
tablewa
re,
add
drink
leave
say bye,
change
the car's
key
print bill,
collect
money,
invoice
convey
the order
prepare
dishes
offer
bill,
help
to pay
parking
change
things
on the
recepti
on
continu
ously
cashier
desk
clean
the
table
Fig. 3. HaiDiLao service processes
Its service processes are interpreted as follows:
1) Before Eating
First of all, when you approach HaiDiLao, whether you go
inside, the service personnel will say hello with smile and ask
what he can do for you, even maybe someone will clean your
car for free. When they find a taxi within the range of their
vision, they will welcome you warmly and open the door for
you. Then at the moment you walk into HaiDiLao, a smile
service will be accompanied by your entire dining process.
Unfortunately, there are too many people; you have to wait for
table. Don’t worry. It’s a pleasure moment. The receptionists
will offer you all kinds of fruits, snacks and drinks, such as
watermelon, apple, peanuts, soybean milk and so on. In
addition, you can play gobang, read books, wipe your shoes,
enjoy nail salons. All these services are free. Generally
speaking, waiting for table is the most boring thing for
customers because of the traditional waiting way. But in
HaiDiLao, it evolved the boring into a great enjoyment relying
on these characteristic services.
2) During Eating
The staff will ask your requirements and preferences about
the dinning environment like prefer sitting near window or in
the corner when having empty table. And then they guide you
to the seat feeding to your liking. The waiter will pour drinks
for you and give you some suggestion about the dishes in the
meantime. The most praised thing is that the staff doesn’t
suggest you expensive or excess food for their profit, but they
will remind you not to order too much to avoid waste on the
contrary.
HaiDiLao has a timely dinner service, for example, the
staff will provide the apron for each customer to prevent the
oil or dishes falling accidentally. A waterproof bag will be
given to customers to put their mobile phone in to facilitate
using cell phone during dinner without any worry. Of course,
it’s common to see a string and small hairpin for long-hair
women, cloth for people with glasses. There will be hot towel
to wipe your hands in time when you sit. Not only that but the
waiters tell you their name and remember your name and
birthday. When you go to the bathroom, there also has
dedicated staff delivering hand soap and towel for you, even
toothbrushes, toothpaste and cosmetics for women to satisfy
their beauty requirement. The consideration of dinky place and
show consideration for those who bring a person, besides
convenient, more the lukewarm thaw of extremely fine point
is touched.
3) After Eating
When you have finished you dinner hoping to sit for
resting and chatting, someone will give you free fruit and
snacks. A costumer said, ”Someone once desired to package
the rest watermelon, the waiter told them they won’t packaged
the fruit having been cut. But a complete watermelon has been
packaged when the guest paid the bill.”
IV.
Ordinary restaurants service processes start from the time
you get into the restaurant. The service is restricted to pour tea,
deliver the menu and change the dirty plates. The service of
HaiDiLao has surpassed the traditional service system; it’s
more forward-looking and backward-looking. Their services
begin with the customer in the staffs’ line of sight; end up with
sending to the “thousands of miles away”. On the basis of the
questionnaire, we came exactly to that conclusion that
majority of the customers favor HaiDiLao because of the
service, few focuses on dishes type and convenient transport
(see Figure 4).About the question “which serve attract you
most?” in the questionnaire, 80% respondents choose the
service before eating. And then we survey which service the
guests prefer. The author allows the interviewees to choose
three top services in the order of their preference, and then
assign one for their favorite, two for second and three for third.
According to the results of questionnaire, men and women
have different interests. The results are shown in Figure 5.
Nail services fit the women psychology of pursuing fashion
and beautiful, which let the young woman become the main
consumer groups. “Touch each customer” has become
HaiDiLao service characteristics, and formed the source of
their innovation drive at the same time.
Fig. 4. The conclusion of why the customer go to HaiDiLao
THE CONSIDERATION TRIGGERED BY THE CASE
A. The Success Reason of Haidilao
The main product of HaiDiLao, Hot pot, main products is
common dishes. The condiment and side dishes are likely
similar. But HaiDiLao can turned these common ingredients
into delicious food by their unique perfect service quality,
showing national well-known pot style in Sichuan. Through
HaiDiLao live experience at Xidan and the Great Bell Temple
and interviewing front-line staff, we attempts to find its
success tips. And the author distributes questionnaires to the
people who have eaten in HaiDiLao to find out what attract
them mostly. The results from the investigation indicate that
the secret of their success is their both forward-looking and
backward-looking service process and high-quality cordial
service personnel.
1) Forward-looking
Process
and
Backward-looking
Service
Fig. 5. The preference of customers
2) High-quality Cordial Service Personnel
None of enthusiasm and high-quality staffs, even the
perfect service process can give Haidilao no active help. So in
order to serve well, you need to satisfy the service staff to let
them be happy to serve customer. We ask fifteen staffs the
same three questions, their answer and the conclusion are
shown in Table. HaiDiLao knows well of the important of the
staff for catering service industry. The managements firmly
believe employees are the creators and delivers of the
enterprise value [1]. Only if the staffs work hard and are
satisfied with the enterprise, they will have enough passion to
put to work [5]. The philosophy of HaiDiLao is that the staffs
are also their customer. HaiDiLao have confidence in their
staffs, they especially respect them, so HaiDiLao adopts the
system of promoting from within. And they give the staffs
opportunities to fulfill their potential capabilities by opening
new branches for the best employees. Indeed, it's the wealth of
opportunities that will prove to be the most effective
stimulation tool.
TABLE I.
Question
Do you feel happy
here?
Can
you
participate in the
management?
Do you think you
have
been
respected by the
enterprise?
THE CONCLUSION OF THE INTERVIEW
Answer
Yes 11
No
4
Yes
14
No
1
Yes
15
No
0
Conclusion
Yes
Yes
Yes
Measures
Good
food
and
accommodation conditions;
High salary;
Good suggestions named
after the presenter;
Make decisions when have
quality problem
Spending a lot of money on
education
and
health,
including their families;
Open new branches for the
best employees.
B. The Suggestion of Catering Service Process Innovation
1) Extend the Existing Process by Internet.
Majority of the existing catering service processes still
stop at the service during eating. The form of services is also
same. At present, the homogeneity phenomenon of the
catering service is comparatively serious. If the enterprise
wants to stand out from the competition, it must optimize their
service processes, from only serving during eating to serving
before-during-after eating, forming an integration services
system. With the land resources reducing and family cars
increasing, parking has become a major problem for the
customer, and this problem drives away a lot of customers. So
offering more space for parking can attract more customers.
The solution of this question is related to the location of
enterprises, and the management strategy. With the
development of the Information Age and the rise of groupbuying, catering can cooperate with the surrounding
merchants such as video game, nail salons, pedicure salons.
They can set up a site and give the waiting customers the
privileges——pay very low price than the ordinary guest to
obtain the equal quality service. And then enjoy other service
during waiting. It can not only realize joint development, but
also reduce the customers’ negative emotions because of
waiting. About postprandial process management, remind the
customers to take away their belongings at first, then
forwardly ask the customer whether they need to call for taxi
or other service, finally give some little gifts. The enterprise
should abandon the rigid service thinking and advocate the
service that exceeds the process. Treat guests like their
families so that making customers feel beauty, pleasure,
enjoyment and satisfaction by consciousness stimulation.
2) Humanization Manage Employees
The employees are the first customers and soul of the
enterprise [5]. The quality of the catering industry service is
determined by the staffs since they are the performers of
service and the producers of products. Only after the staffs
being satisfied can the customers feel happy. Moreover,
encourage the staff to innovate actively and put forward their
own suggestions daringly. At the meantime, the managers
cannot rest on the laurels of a few "acts of heroic protection"
while ignoring the customers’ suggestions. And the enterprise
can invest the staffs some rights of the discount. They can
determine to give some discount or gifts to the customers
according to the site condition when the customers feel
unsatisfied because of waiting for table too long, the quality of
the dishes and so on. It’s an effective method calm the
customers mood, engender a better atmosphere for love and
promote the brand popularity. Of course, the company should
adopt some regulatory measures and review, gather, submit
the discount to the management every day to prevent the staffs
using discount rights freely. Being entitled to the discount
right and come up with the management suggestions, the staffs
feel being trusted and respected. The strong sense of
participation multiply their awareness of master, which lead
the staffs and the enterprise unite with one heart and one mind.
V.
CONCLUSION
HaiDiLao started from four men and four chairs in Sichuan
Jianyang has been followed and emulated by numerous
Chinese catering even other countries’. In major forums as
well as micro blogs, it has been elevated to the same height of
Ultraman, a cosmo-wide cartoon hero, because they can
satisfy whatever the customers require. Its serves system also
has been referred to “HaiDiLao Model”. HaiDiLao deals with
all aspects of the service profit chain successfully using its
characteristics perfect service process, so that their service
profit chain is at the positive cycle condition and its services
achieve innovation. Therefore, China's catering industry
should reference the successful experience of HaiDiLao,
innovate their service to win the market. For the sake of the a
virtuous service profit chain cycle, all the restaurants have to
rack their brains trying to extend the existing process and
focus on staffs management at the same time. Giving the staffs
certain powers and encouraging them to participate in the
innovation process can brainstorm even better ways to get
good word of mouth.
REFERENCES
[1]
[2]
[3]
Fei Li, Bu Mi, Hui Liu, “Path of Successful Business Model Innovation
in Chinese Retail Enterprises: A Case Study of HaiDiLao Catering
Company”, China Soft Science Magazine, vol09:pp.97-111,2013
Yin Wang, “Research of Innovation in Hot-Pot Business Model under
Informationalized Condition”, Beijing University of Posts and
Telecommunications,2010.
Soteriou A et al, Operations, quality and profitability in the provision of
banking services. Management Science, vol45,no.9, pp.1221-1238,1999.
[4]
[5]
Huan Liu, “Strategy Research on Employee Management of Service
Industry from the Perspectives of Emotional Labor ——A Case Study
on Harbor City”, Ocean University Of China,2013
Yajun Wu, Yingying Zhang, “Towards a Sustainable Humanistic
Enterprise: HDL Mode and Its Theoretical Implications”, Journal of
Management Case Studies, vol1,pp.1-19,2015.
[6]
Liu Li, “Research on employee engagement of Ningbo HaiDiLao
restaurant” , NingBo University, 2015