I was walking along Lorong Mambong today and I noticed a vacated 16A, which used to be occupied by Alto Taberna Tapas. The signboard is still up but the interior appeared stripped.
It’s a pity because I remembered an eager young man (presumably the owner or one of the owners) discussing interior layout with a designer earlier this year. I was sitting next to them at the food centre, so I can’t help but listened to bits and pieces of their discussion. I thought to myself, “Here is another budding entrepreneur taking on the government’s cue to take risk – and with the support of relatives and friends too. This is encouraging.”, I thought to myself.
Having had many years of experience in the retail trade, including an F&B outlet, I am aware of the reality of such a venture and how much is at stake – well, at least a couple of hundreds of thousands. It is not easy to come up with a cost control formula (cost of goods, rental, labour) and a revenue sustaining strategy that will work continuously – especially in the face of so many established, experienced and well-known competitors here in Holland V – and in the face of the ever-changing government policies that will affect the prices of goods, labour and rental. If your gross margin is not at least 20%, there will be a problem managing costs and cash flow.
When Alto Taberna became operational, and especially when it became evident to me that it was another Tapas restaurant, I knew it would be a difficult venture. That was because a similar restaurant, which opened two years’ earlier along Lorong Mambong (what was it called? .. i can’t remember the name now but it was opposite Tango’s and was opened by two budding entrepreneurs who operated a novelty shop in Far East Plaza), had closed just a few months’ prior.
During that time, I could see a few fundamental marketing mistakes made by the owners of the earlier tapas restaurant, which were repeated by Alto Taberna:
Selling tapas without authentic Spanish tapas expertise and psychology was an uphill task. Crystal Jade in Holland V did not call itself a restaurant precisely because they are aware that if they did, many of their more discerning customers would be disappointed. The restaurant is not exactly serving typical Chinese restaurant cuisine if their list of extensive menu items, which enumerated an unending list of Cantonese snacks and meals, is anything to go by. In fact, they don’t even refer to themselves as a restaurant, if you had noticed that. But if anyone were to perceive them as a Chinese restaurant, that would not be a disadvantage to them either!
After all, they have to assume that people who come to Holland V to wine and dine travel a fair bit and are exposed to a variety of cultures and tastes, so it would be disappointing for them if they did not get what they had expected.
Selling a product, especially one which is intertwined with a service, such as that of a restaurant, requires one to go beyond the tangibles. In fact, for a tapas restaurant, this requires an authentic Spanish essence, which should be reflected in it ambience, cutlery, service staff, music and food (presentation, portion, taste, etc). Most importantly, the culture which surronds the offering must be clearly projected. If the potential customer did not get any clue of this before entering the restaurant, he will not enter at all. This brings me to my next point.
With the right product and the right ingredients for such an experience, projecting the right imagery is the next hurdle. This is a skill which only professional marketing communication people can create for you. Too many business owners reduce branding to nothing more than having a nice name, some sleek looking brochures, a nice web site, smiling staff and an outlet which looks like the real thing but which in fact is empty at its core. It is more sophisticated, fundamental and subtle than most people want to think. In deed, a good understanding of consumer psychology and the strategic process of product positioning are necessary in order to arrive at a workable branding and imagery.
Deciding on the restaurant’s target group is the most basic ingredient in marketing. Knowing their values, mentality and lifestyle is the PILLAR of effective marketing – and to grasp these requires extensive exposure to the target group. If the business doesn’t get this right from the beginning, it will result in pricing that is too high for students and an inadequate wine selection to go with the sophistication of those who love tapas – just to name a few possible basic positioning errors.
If you try to be everything to everyone, which is what most desperate businesses do after the first few months of depressed sales, you can be sure that you have lost your competitive edge even before you start building one – and even if your branding and everything else are correct at that point.
There are clearly multiple reasons, including macro economic ones, why both tapas ventures failed. However, the key reason underlying their failures is fundamental in nature, as in many businesses which failed. This is the failure of marketing, as cited in the above impromptu list.
I wish both owners better luck in the future.Disclaimer: The views and conclusions in the above article are opinions of the writer and are based on his personal observations of the subject matter. They do not necessarily reflect the position of www.holland-village-singapore.com . The information provided may or may not be factual but they have not been verified. If you have a question, you may post for assistance on our Forums. For special deals, please visit our Holland-Village-Singapore Facebook Page.