Lessons in branding. pricing & start-up from fish and chips
December 4, 2014
By Matthew Tukaki
You might be asking yourself why would we ask a question about whether people prefer old style fish and chips versus new style? In fact what do those things even mean! For our North American and Asia readers some context: Fish and chips is the original take away food and dates back to the 19th century as Britain’s industry began to rise around its many ports. People needed something cheap and easy – Fish and chips was born.
As a fast food they have been a staple in countries such as Australia, New Zealand and the United Kingdom for years and recently they have had a resurgence. Old style refers to the product being wrapped in paper or news print, taken away from the shop and eaten at home or on the go. New style is where you sit down and have them in a restaurant or a bar, they come on a plate accompanied by salad and normally a whole range of condiments.
Confused? Read on.
When we surveyed 800 people the overwhelming majority (87%) said they preferred old style. Admittedly the surveyed group consisted mostly of Australians and New Zealanders but there are lessons in this data for entrepreneurs and start-ups:
The overheads and cost involved in running a takeaway fish and chip shop can actually be much less than a traditional pub or restaurant: This is because the square meter age required is much less if you do not offer a sit down and eat option. Less tables and seating requires less floor space which means less rent, less power and less on wages (you don’t need as many waiting staff etc). There are also less costs when it comes to serving of the product – many people expect their fish and chips to be wrapped in paper whereas in a restaurant they come on a plate, you need knives and forks, multiple salt and pepper shakers and then there are the dishes that the condiments come in.
People can be convinced that a high premium product can be charged at a higher rate: that can be a flaw because when you try and put some sophistication into a product that is a family favourite because of its simplicity then the market may not respond in volume. We surveyed three fish and chip ships and Sydney (Australia) and Wellington (New Zealand) and we found that the cost of an average take away meal was less than $10. When then surveyed three restaurants in the same locations and often a product tagged as premium because it was merely served on a plate came in at above $25.
Coming back to the survey where 87% of consumers said that they prefer old style fish and chips to new school the reality is that they are in favour of the lower cost and more familiar option. The majority still want their food on the go. Even those in favour of the new school option indicated they would expect a lot more “bang for their buck” with several people commenting that the fish “better be a decent size and the plates better shine.”
Of course, this means that the traditional fish and chip shop is not at risk of going bust because of a lack of customer demand! But, what lessons can entrepreneurs and startups learn from this exercise?
Always understand your market and what they are prepared to pay for. This is even more important when considering the demographics of the area you want to get established in. One fish and chip shop in the suburb of Redfern (Sydney, Australia) spent a significant amount on fit out recently. The product they were offering was reasonably expensive at just under $15 for a basic meal as well as a selection of fresh options. The problem was its location. It was at the wrong end of a suburb that has two income extremes. At one end is a high density high unemployed demographic near to a significant amount of public housing. At the other end houses go for above $1 million with a high rate of disposable income. Unfortunately the shop probably chose the wrong location and would have been situated in the suburb closest to the richer end of town with higher disposable incomes.
Always research the completion in the local area: test what others are offering and what they are charging. Match this with your research around the demographic you want to tap into and you’ll invariably find your sweet spot when it comes to pricing
Prepare to market: just opening a business won’t draw the crowd in. You need to go out there and find the crowd and draw them to you.
Don’t try and innovate on a product or try and change a traditional favourite unless you have such a great way of improving it that it would be hard for the new idea to fail.
It appears that the old style fish and chip shop still has life yet and maybe such intense loyalty has led to its survival – unlike the old milk bars which are now a thing of the past.
About the Author: Matthew Tukaki is editor of EntreHub.org and an abashed fan of old school fish and chips. You can follow him on Twitter HERE
The survey was carried out across EntreHub's membership group in Australia and New Zealand and invited responses across oursocial media feeds and networks. The survey ran between the 2 -3 of December 2014
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