CHAPTER 7 - Harnessing AI to Revolutionize Market Research & Product Development
Case Study
Launch of Restaurant “The Melting Pot” in Bali, Seminyak
CONTEXT:
We are launching a Fusion Cuisine Resturant in Seminyak Area in Bali. We will use AI for our Market Research and Product Development.
Tools Used:
- CHATGPT, ScrapeHero (For Scraping Competitor Reviews),
- Midjourney (For Resturant and Menu Creatives),
- Looka (For Logo Design)
- HARPA AI (For Generating Midjourney Prompt)
STEP 1: Identify Competition and Business Opportunity in the Market
We can completement our own offline and online analysis with CHATGPT which can provide us a high level perspective of the competitive set, market size, business P&L and even a deeper level of business plan which we can refine further.
CHATGPT Output: Market Sizing
Based on the data gathered, here are some insights and opportunities for your new fusion cuisine restaurant in Seminyak, Bali:
- Tourism Recovery: Tourism in Bali is recovering and nearing pre-pandemic levels. As of April 2023, there were 1,437,740 foreign tourists visiting, compared to 1,819,644 in the same period in 2019. This recovery presents a significant opportunity for businesses in the hospitality sector, including restaurants.
- Tourist Demographics: The leading international arrivals in Bali in April 2023 were from Australia, India, China, England, and the United States of America, in that order. This information can be used to tailor your restaurant’s menu, ambiance, and marketing efforts to cater to these demographics.
- Local Consumption Trends: While specific data on local consumption trends wasn’t found, it’s important to note that Bali is a melting pot of cultures and cuisines. A fusion cuisine restaurant could appeal to both locals and tourists looking for a unique dining experience.
- Tourism-Related Business: Tourism-related business makes up 80% of Bali’s economy. This statistic underscores the importance of the tourism sector and the potential for businesses that cater to tourists.
- Location: Seminyak is known for its high-end market positioning with luxury accommodations, upscale restaurants, and chic boutiques. Your fusion cuisine restaurant could fit well in this environment, especially if you’re targeting the higher end of the market.
- Competitive Landscape: While specific data on the restaurant scene in Seminyak wasn’t found, it’s known to be a competitive market with a variety of dining options. It’s recommended to conduct a detailed competitive analysis to understand your competition and identify gaps in the market that your restaurant could fill.
- Cultural Considerations: Bali is the only Hindu-majority province in Indonesia, with 86.9% of the population adhering to Balinese Hinduism. This could influence dietary preferences and should be taken into consideration when designing your menu.
Additionally, here’s an estimation of the business opportunity for opening a restaurant in Bali:
- Market Size: Bali’s economy is predominantly tourism-driven, renowned for its strong hospitality sector (hotels, restaurants, beach clubs, cafes) and as a haven for tourists with 5,000,000 visiting Bali every year (pre-pandemic), with that number set to increase year on year. This indicates a large potential customer base for a restaurant business 1.
- Revenue Potential: According to Habitat Hospitality, a Bali-based hospitality company, small cafes with less than 65 seats can generate around USD 35,000 in net revenue per month with a 12-18% profit margin. Meanwhile, a mid-tier restaurant with more than 65 seats and 200-300 sqm in a good location can generate around USD 55,000 in net revenue per month, also with a 12-18% profit margin 1.
- Supportive Factors: The restaurant industry in Bali is thriving due to the high foot traffic and prime locations. Despite the fast-growing trends and market demand in Canggu, Pererenan, and Uluwatu, areas like Ubud, Sanur, and Seminyak also show strong post-pandemic recovery data 1.
- Costs: To set up a foreign-owned company in Indonesia (PT PMA), you need to commit an investment of $700,000 USD into Indonesia per business operation license. This investment can be done in stages and can be used as capital expenditure, such as land purchase or building lease, construction costs, equipment purchase, recruitment, etc 1.
CHATGPT Output: Competition
- Motel Mexicola
- Strengths: Offers delicious food, lively parties, and a unique Mexican fusion cuisine
- Weaknesses: May be more focused on the party atmosphere than on the food.
- Difficulty to Beat: 8/10
- Kilo Bali
- Strengths: Provides upscale fusion dining with a focus on Japanese cuisine
- Weaknesses: May not appeal to customers looking for more traditional Indonesian or Asian flavors.
- Difficulty to Beat: 7/10
- Summer Queen
- Strengths: Offers a luxurious setting
- Weaknesses: The food is reportedly average.
- Difficulty to Beat: 6/10
- Teatro Gastroteque
- Strengths: Recognized among the best Asian fusion restaurants, provides an old-fashioned European charm
- Weaknesses: The European influence may not appeal to all customers.
- Difficulty to Beat: 7/10
- Mama San
- Strengths: Offers diverse Asian fusion cuisine in a popular location
- Weaknesses: The restaurant may not differentiate itself enough from other Asian fusion establishments.
- Difficulty to Beat: 7/10
CHATGPT Output: Business PNL Outlook
STEP 2: Gather Customer Reviews
We will use ScrapeHero in this case to scrape the reviews for Summer Queen Bali, which we will extract as a file which we then feed to CHATGPT.
Additionally, We will Focus on reviews from the past six months to ensure the data reflects recent customer sentiments.
Refer the Sample Scraped List of Competitior Reviews Here. We can also automate this process at scale using APIs and downstream funnel to have a continuous feedback loop.
STEP 3: Sentiment Analysis with ChatGPT
• Majority of the reviews indicate positive sentiment towards the competitor, highlighting aspects like food quality, service, and atmosphere.
• Address any negative reviews by improving pricing, taste preferences, and dishes that didn’t meet expectations.
CHAT GPT PROMPT I USED:
Act as an expert in data science and market research with deep experience in field of hospitality. I am launching a fusion cuisine restaurant in Bali, Seminyak and currently want to identify my Customer Persona, Segments, Likes, Dislikes, Preferences, What menu items I should have, How should I have the look and feel of restaurant, dishes etc., which days will be busier, what timings etc. what are the opportunities i can leverage as low hanging fruits for my launch – Here is the data from 250 customer reviews for my key competitor. I want to you to analyze this and use your own expertise to craft 1. Customer Persona and Segments i should target, 2. Sentiment Analysis, 3. Customer Preferences, 4. Menu Table – with dishes, description and prices which I should keep to win in the market, 5. Any other areas I should consider. Make it very specific and detailed. I will feed you the customer reviews of my key competitor in batches – please respond just with “I understand” if you understand and don’t have any questions. Once done, i will mention “Let’s go” for you to analyze and provide output.
CHATGPT Output: Customer Personal and Preferences
STEP 4: Customer Persona and Preferences
• Target customers: Tourists visiting Bali, food enthusiasts, and locals seeking a unique dining experience.
• Customer segments: a) Tourists looking for a blend of Indonesian and international cuisine. b) Food enthusiasts who appreciate innovative and flavorful menus. c) Locals seeking a contemporary and trendy dining atmosphere.
• Customers highly value good food quality, attentive service, and a vibrant yet comfortable atmosphere.
• Preferences identified from the reviews: a) Fusion Flavors: Create innovative dishes that combine Indonesian flavors with international cuisines. b) Seafood: Offer a variety of fresh and well-prepared seafood dishes. c) Vegetarian/Vegan Options: Include a selection of vegetarian and vegan dishes. d) Craft Cocktails: Develop a unique cocktail menu with creative and well-balanced flavors.
MIDJOURNEY Prompt I Used:
An artfully composed depiction of a luxurious fusion cuisine restaurant nestled amidst the idyllic landscapes of Bali. The restaurant interior is a work of art in itself, featuring an eclectic mix of contemporary and traditional elements. The walls are adorned with large, vibrant paintings that reflect the vibrant Balinese culture, while the furniture showcases unique, sculptural designs. The space is filled with an abundance of natural light, accentuating the colors and textures throughout. The dining tables are embellished with handcrafted ceramic plates, adding a touch of artisanal charm. The image is rendered in an artistic style, reminiscent of a watercolor painting, with soft, flowing brushstrokes and vibrant hues. The camera perspective is set to a medium shot, capturing both the intricate details of the interior design and the inviting atmosphere. –ar 1:1
CHATGPT Output: Product Ideas
STEP 5: Menu and Product Development based on Competitor Analysis
Restaurant Look and Feel:
• Create a contemporary and inviting ambiance with a fusion of Balinese and modern design elements.
• Utilize natural materials like bamboo, wood, and stone to enhance the tropical atmosphere.
• Incorporate warm lighting and comfortable seating arrangements.
• Consider adding subtle cultural touches to showcase the fusion concept.
Recommendations based on negative reviews:
1. Pricing: Address complaints about high prices by offering a range of affordable options on your menu. Consider including:
• Lunch specials priced between $8 and $15, featuring dishes like fusion-inspired rice bowls or noodle dishes.
• Dinner entrees priced between $18 and $25, offering a variety of fusion main courses with unique flavor combinations.
2. Taste Preferences: Analyze negative feedback regarding specific dishes and ensure your menu items are well-executed and deliver on flavor. For example:
• Refine the recipe for a fusion appetizer like Crispy Calamari, ensuring it is perfectly cooked and seasoned to please customers’ palates.
• Pay attention to the seasoning and cooking technique of a dish like Wagyu Beef Tataki, ensuring it remains flavorful and juicy.
3. Service Improvement: Train your staff to provide attentive and friendly service, addressing concerns mentioned in the reviews. Consider implementing the following measures:
• Conduct regular staff training sessions on hospitality and customer service to improve overall service quality.
• Emphasize the importance of product knowledge, ensuring waitstaff can confidently describe dishes and make recommendations.
4. Ambiance: Create a comfortable and enjoyable dining experience by maintaining a consistent ambiance. Consider the following suggestions:
• Install dimmable lighting to create a cozy atmosphere during evening hours.
• Pay attention to cleanliness and ensure tables and seating areas are well-maintained.
Must-have menu items based on positive competitor reviews:
1. Signature Fusion Dishes:
• “Fusion Explosion”: A creative dish combining flavors from different cuisines, such as Asian spices with a Western twist. Price: $22.
• “Seafood Symphony”: A seafood platter featuring fresh catch of the day, including grilled prawns, seared scallops, and a tangy citrus glaze. Price: $28.
2. Fresh Seafood Selection:
• “Spicy Tuna Poke Bowl”: A refreshing combination of marinated tuna, fresh vegetables, and Asian-inspired dressings. Price: $16.
• “Seared Sesame Salmon”: A perfectly seared salmon fillet served with a ginger-infused sauce and a side of stir-fried vegetables. Price: $24.
3. Vegetarian/Vegan Menu:
• “Miso Eggplant Stack”: Layers of grilled eggplant, tofu, and miso glaze, topped with fresh herbs and sesame seeds. Price: $18.
• “Vegan Pad Thai”: A plant-based version of the classic Thai dish, featuring rice noodles, tofu, and a medley of colorful vegetables. Price: $15.
4. Craft Cocktails and Beverage Pairings:
• “Sakura Martini”: A floral-infused cocktail made with premium gin, cherry blossom syrup, and a hint of citrus. Price: $12.
• “Mango Tango Mocktail”: A refreshing non-alcoholic beverage blending fresh mango, lime, and sparkling water. Price: $6.
STEP 6: Pricing Strategy and Key Menu Items
STEP 7: Customer Surveys and Feedback
CHATGPT Output: Launch Ideas
STEP 8: Product Launch Testing and Refinement
Peak Days and Timings:
• Based on the competitor’s reviews, weekends and evenings tend to be busier, especially during dinner hours.
• Adjust staffing levels and resources accordingly to meet the demand during peak times.
Opportunities and Low Hanging Fruits For Initial Launch
• Leverage the fusion concept as a unique selling point to attract both tourists and locals.
• Highlight the use of fresh and locally sourced ingredients in your dishes.
• Engage with customers through social media platforms, sharing enticing food images, positive reviews, and promotions.
• Collaborate with local influencers and bloggers to increase visibility and create buzz.
• Offer special promotions during off-peak hours to attract customers during slower periods.
STEP 9: Iterative Improvements
• Continuously monitor customer feedback, reviews, and ratings after the launch of your fusion cuisine restaurant.
• Use AI tools to analyze the data and identify areas for improvement, such as menu adjustments, service enhancements, or introducing new dishes.