Hai Di Lao Hot Pot From Employee Stimulation

The management of Chinese restaurant chains has for some time followed the western model while accommodating Chinese customers. The new Hai Di Lao Hot Pot Restaurant chain has established its own management style, pioneering chain catering management to help the Chinese restaurant industry establish a professional image, explore a local management model, and maintain high standards of food safety. The objectives of this case study are to introduce the Hai Di Lao managerial strategy, investigate the secrets of its success from a human resources management perspective, explore its innovative service, and assess why it has inspired both marketers and the catering industry. The results show that human resources management can change employees’ behaviour and emotional states by addressing a wide variety of needs. In addition, attention to service quality can improve customer satisfaction and retention

Journal of China Tourism Research ISSN: 1938-8160 (Print) 1938-8179 (Online) Journal homepage: http://www.tandfonline.com/loi/wctr20 Hai Di Lao Hot Pot: From Employee Stimulation to Service Innovation Chen Chen, Huawen Shen & Daisy X.F Fan To cite this article: Chen Chen, Huawen Shen & Daisy X.F Fan (2015) Hai Di Lao Hot Pot: From Employee Stimulation to Service Innovation, Journal of China Tourism Research, 11:3, 337-348, DOI: 10.1080/19388160.2015.1082526 To link to this article: http://dx.doi.org/10.1080/19388160.2015.1082526 Published online: 25 Sep 2015 Submit your article to this journal Article views: 147 View related articles View Crossmark data Full Terms & Conditions of access and use can be found at http://www.tandfonline.com/action/journalInformation?journalCode=wctr20 Download by: [University of Saskatchewan Library] Date: 02 April 2016, At: 09:18 Journal of China Tourism Research, 11: 337–348, 2015 © 2015 Taylor & Francis ISSN: 1938-8160 print / 1938-8179 online DOI: 10.1080/19388160.2015.1082526 Hai Di Lao Hot Pot: From Employee Stimulation to Service Innovation Downloaded by [University of Saskatchewan Library] at 09:18 02 April 2016 海底捞火锅：从员工激励到服务创新 CHEN CHEN HUAWEN SHEN DAISY X.F FAN The management of Chinese restaurant chains has for some time followed the western model while accommodating Chinese customers The new Hai Di Lao Hot Pot Restaurant chain has established its own management style, pioneering chain catering management to help the Chinese restaurant industry establish a professional image, explore a local management model, and maintain high standards of food safety The objectives of this case study are to introduce the Hai Di Lao managerial strategy, investigate the secrets of its success from a human resources management perspective, to explore its innovative service, and to assess why it has inspired both marketers and the catering industry The results show that human resources management can change employees’ behavior and emotional states by addressing a wide variety of needs In addition, attention to service quality can improve customer satisfaction and retention KEYWORDS Hai Di Lao Hot Pot Restaurant, service quality, service innovation, customer satisfaction 中国连锁餐厅的经营已有一段时间跟随西方的模式，并同时满足国内客户。海 底捞火锅餐饮连锁店已建立其管理风格，并开拓连锁餐饮管理，帮助中国餐饮 业树立专业形象，探索当地的管理模式，及保持高标准的食品安全。本案例的 目的在于引进海底捞火锅店的管理策略，从人力资源管理角度探讨其成功的秘 诀，探索其创新的服务，并评估它因何激发营销人员和餐饮业界。研究结果显 示，通过处理员工各样需求，人力资源管理能改变员工的行为和情绪状态。此 外，重视服务质量也能提高顾客满意度和忠诚度。 关键词: 海底捞火锅, 服务质量, 服务创新, 顾客满意度 Introduction China has a long history of serving traditional food, an activity which has both rich cultural connotations and enormous intangible value As China’s society and economy develop, so too is At the time of writing this paper, Chen Chen was a doctoral student at the School of Hotel and Tourism Management at The Hong Kong Polytechnic University, Hong Kong SAR, China He is currently a lecturer at Department of Tourism, Xin Zhou Teachers University, Shanxi, China (E-mail: rosanna.chen@connect.polyu.hk) Huawen Shen is a Lecturer at Faculty of International Tourism and Management, City University of MACAU, MACAU, SAR (E-mail: shenhuawen1980@hotmail.com) Daisy X.F Fan is a PhD student in the School of Hotel and Tourism Management at The Hong Kong Polytechnic University, Hong Kong SAR, China (E-mail: daisy.fan@connect.polyu.hk) 337 Downloaded by [University of Saskatchewan Library] at 09:18 02 April 2016 338 Chen Chen et al its catering industry experiencing rapid growth, with a profound impact on lifestyles The sales volume for China’s restaurant industry reached a record of $444.8 billion in 2012, employing 12.08 million individuals (Ministry of Commerce of the People’s Republic of China [MOFCOM], 2012) It is known that service quality can have an impact on customers’ behavioral intentions, enabling firms in the service industry to secure a competitive advantage (Berry, Carbone, & Haeckel, 2002; Cronin & Taylor, 1994; Hernon, Nitecki, & Altman, 1999) However, it is also well documented that restaurants have the highest staff turnover of all service industry firms in China, with a figure of 127% (overall) and 31% (management) (MOFCOM, 2012) Therefore, gaining competitive advantage in the catering industry means not just outperforming other firms, but also identifying how to motivate employees and offer better customer service Founded in 1999, the Hai Di Lao Hot Pot Restaurant is famous for its customer-oriented attitude and attentive staff This case study examines in detail how “treating employees like human beings” is so crucial to Hai Di Lao’s success and evaluates its service quality from a customer perspective It does so through a combination of participant observation and textual analysis of over 20,000 online reviews The rest of this article is organized into four sections The first of these sections provides a brief overview of the literature in service quality and discusses its relationship with customer satisfaction The sampling and data analysis methods are described in the following section, followed by the presentation of results evaluating both internal and external (customer-oriented) service quality Finally, the paper discusses future challenges for the firm in this case study Literature Review Service Quality In the early 1980s, the manufacturing industry as a whole implemented Total Quality Management (TQM) and similar approaches (Kim, 2011) A large number of studies have examined service quality in the hospitality industry and several models have been developed to conceptualize the construct (Cronin & Taylor, 1994; Kim, 2011; Parasuraman, Zeithaml, & Berry, 1985) Unlike in the manufacturing sector, service quality has been developed into a unique concept in the service context, based on models of consumer behavior (Kim, 2011) By placing emphasis on customer satisfaction, service quality can be defined as the difference between customers’ expectations of the service and their perceptions of the service actually received (Zeithaml, Berry, & Parasuraman, 1988) Lovelock and Wright (2002) show that service delivery in the hospitality industry involves a lot of interaction among customers, employees, and facilities Customers are often involved in the service, so a distinction needs to be drawn between process and outcome One of the challenges for service industry managers is to balance the need for routine and standardization with the need to treat customers as individuals Berry et al (2002) suggest that service quality is critical to business success or failure, which is rarely concerned with only one aspect of service but with the whole package Offering products or services alone is no longer enough; organizations must provide their customers with satisfactory overall experiences (Berry et al., 2002) In addition, positive employee attitudes promote stronger customer loyalty; thus, companies must attract and keep the best employees and oversee their long-term development (Briggsa, Sutherland, & Drummond, 2007) Journal of China Tourism Research 339 Downloaded by [University of Saskatchewan Library] at 09:18 02 April 2016 Customer Satisfaction and Service Quality Delivery The relationship between customer satisfaction and service quality in the hospitality industry has been examined in a number of studies (Cronin & Taylor, 1994; Oh, 1999; Tian-Cole & Cromption, 2003) There is a broad consensus that they are different constructs (Tian-Cole & Cromption, 2003) Service quality deals with customer satisfaction, whereas satisfaction itself is transaction-specific and focuses on the customer’s personal and emotional reaction to the service they have received (Oh, 1999; Zeithaml, Berry, & Parasuraman, 1996) Schneider and Bowen (1999) suggest that satisfaction consists of two components; a service encounter and overall service satisfaction It has also been suggested that emotions play an important role in perceptions of service quality and satisfaction (Dube & Menon, 1998) In the past, many businesses selling products have been satisfied with meeting customers’ adequate expectations, but nowadays more and more service industry companies place an emphasis on customer satisfaction A few service organizations seek to exceed customers’ expectations and achieve excellence through customer delight, on the basis that the strength of the competition now means that merely satisfying customers is not enough to retain them (Schneider & Bowen, 1999) Terrill and Middlebrooks (1996) suggest that many businesses continue to promise exceptional service and to focus on providing better product and services, but only a few actually deliver excellence Service quality involves every aspect of an organization Furthermore, every business has both internal and external customers (Hernon et al., 1999) Hernon et al (1999) suggest that paying attention to both internal and external service quality and customer expectations will ensure that service quality meets or exceeds customer expectations, something that is increasingly important to succeed in a fiercely competitive environment This combination of paying attention to both internal and external customer service quality and identifying customer satisfaction is the focus of this case study Method The overall objective of this study is to assess the management of Hai Di Lao Hot Pot Restaurant, primarily by examining service quality (to identify the reasons for its success) and then by evaluating service quality performance in terms of customer satisfaction In order to this, the following activities were conducted First, a purposeful secondary research study was conducted to identify potential reasons for the success of Hai Di Lao Hot Pot Restaurant’s products and service from the perceptive of leadership and organization culture A participant observation study was then conducted in one of the Hai Di Lao Hot Pot Restaurant outlets in Shenzhen Since customer expectations and satisfaction as well as individual perceptions of a service are emotional responses that change frequently at multiple levels, they are complex and difficult to measure Participant observation can uncover details about the service quality and enable reality to be observed more richly by allowing the researcher to interact with employees and customers To complement the participant observation study, individual in-depth interviews were also undertaken with 10 observers, guided by an open questionnaire Since research into the use of online comments in the hospitality industry is still in its early stages, it makes sense to conduct a qualitative study to explore these comments Furthermore, a number of studies have used a similar qualitative approach to analyze an Internet comment forum in order to identify insights about customer experience and behavior This study therefore also used customer reviews to examine customers’ satisfaction with Hai Di Lao’s product and service The sample consisted of self-selected online customer comments 340 Chen Chen et al Table The Screening Process and Screening Criteria for the Customer Reviews Screening process Downloaded by [University of Saskatchewan Library] at 09:18 02 April 2016 All reviews Screening criteria 10,223 customer reviews from Hai Di Lao Hot Pot Restaurants in Beijing, Shanghai, Shenzhen, and Xi’an were obtained from dianping.com 10,223 customer reviews were selected based on length (>10 words) since shorter reviews cannot illuminate the customer experience drawn from the specialized online review website www.dianping.com This mechanism offers customers the opportunity to provide their perceptions of restaurants and other service organizations in China The website was chosen for this study because it is one of the largest online comment websites in China, with nearly 10 million monthly visitors (Xiao, 2013) Moreover, online comments posted on this website are relevant to the purpose of this research Dianping.com allows customers to rate their overall satisfaction with the product and service received using a 5-point Likert-type scale ranging from = Excellent to = Terrible Four Hai Di Lao Hot Pot outlets in Beijing, Shanghai, Shenzhen, and Xi’an were selected These constitute four metropolises in different regions of China and were chosen to minimize bias A total of 10,233 online comments were collected for analysis during a six-month period from June through December 2014, as shown in Table To better understand customers’ comments about their perceptions of the service quality, the service category was divided into four subcategories for coding purposes: (1) core product, (2) human element of service delivery, (3) tangibles of the service escapes, and (4) price (see Table 2) Case Study Background of Hai Di Lao Hot Pot Restaurant China is known for its rich culture and cuisine; but with a population of 1.2 billion people, patterns of food consumption have dramatically changed from meeting basic physiological needs to becoming a lifestyle or recreational activity The restaurant industry in China has rapidly increased fourfold, from $109.2 billion in 2002 to $444.8 billion in 2012 (MOFCOM, 2012) As part of this development, renowned hot pot restaurant brands continue to appear In addition, the concepts of quality, service, environment, and value imported by western fastfood chains have had a dramatic impact on local operators After observing the success of international restaurant chains in China, many local entrepreneurs have developed a growing interest and experience in restaurant quality control and efficient human resources management within the Chinese culture While most competitors struggle to win clients’ approval in such a competitive environment, the Chinese chain Hai Di Lao Hot Pot is gaining popularity The hot pot concept is different from traditional Chinese cuisine It allows customers to participate in the cooking experience by offering different soup bases with a large selection of preprocessed food options While the hot pot is kept simmering, ingredients are placed in the pot and cooked on the table The cooked food usually goes with a dipping sauce Hot pot is one of the most popular foods in China and is typically based on the collectivized cultural background (Huang, 2013) The story of how Zhang Yong, the Journal of China Tourism Research 341 Table Factors Influencing Customer Perceptions of Service Quality Factor Core product cuisine Explanation Authentic Fresh Attentive Prompt Neat appearance Understand needs Courteous Knowledge of menu Exceed expectations The core product portrays the “content” of a product Refers to all aspects (reliability, responsiveness, and so on) that fall under the domain of the human element of service delivery Tangibles of servicescapes Environment Temperature just right Appropriate lighting Cleanliness Adequate parking space The tangible factors of service quality (equipment, environment, and so on) popularly known as the servicescapes Price Paid what was expected Price influences customers’ overall evaluation of Expensive service quality and their Paid more than expected satisfaction on services and products Human element of service delivery Downloaded by [University of Saskatchewan Library] at 09:18 02 April 2016 Item Note Adapted from Sureshchandar et al (2002, p 365) owner of the Hai Di Lao brand, has managed to turn a Hot Pot restaurant into an upscale service quality phenomenon has become very popular in the dining industry in China and in the general society Founded with 10,000 RMB in 1994 in the small city of Jianyang, Hai Di Lao, whose name roughly translates to “scooping treasure from the bottom of the sea”, has become the dominant hot pot restaurant chain in a country obsessed with hot pot (Zhao, McFarlan, & Zheng, 2011) In 2012, its annual turnover approached $6.6 billion and its net profit was 3.3 billion Yuan ($500 million) In 2014, the Hai Di Lao company owned 91 chains in China, one in Singapore and one in the United States; and has over 14,000 employees (Li, 2000; Lu, 2011) Such a legendary success can always be deconstructed into several underlying concepts In this case, the vital factor that has made the Hai Di Lao brand and service successful will be analyzed from the perspectives of both employees and customers The brand sells authentic Sichuan-style hot pot with exceptionally good service and offers to really spoil its customers Long queues are common in its branches Like most restaurants, its labor force is composed mainly of young professionals born in less-developed suburban areas Its entrepreneurial founder has instilled unique values and encouraged its staff to be enthusiastic and motivated to deliver extraordinary customer service in creative ways Thinking about this a little differently, could this service strategy give the brand an advantage over the competition? Can the successful example of Hai Di Lao give the service industry any inspiration? And what are the essential drivers of Hai Di Lao’s success? 342 Chen Chen et al Business Strategy Downloaded by [University of Saskatchewan Library] at 09:18 02 April 2016 Hai Di Lao’s business strategy can best be captured by its employee-centered values Its approach to human resource management has its origins in the company’s philosophy Therefore, we must look at how this value took root in Hai Di Lao and how it influenced its development Where the company management’s ideas come from? How are these ideas transmitted across 90 branches? How does this influence the organization, employees, and customers? These questions are all relevant to the transfer of the founder, Zhang Yong’s, Confucianism In an interview with Zhang Yong, Ma (2008) states, Hai Di Lao has imported American standards to our kitchen, which can control the temperature of our warehouse Hai Di Lao also uses washing machines and has a modern distribution system The biggest difference between Hai Di Lao and others is how they train their employees As a labor-intensive field, the entry level of employees in the restaurant business is not high; however, the high turnover rate is one of the most serious issues facing the industry According to a survey, the turnover rate of frontline catering employees in China is as high as 40%, which reflects the low salary but heavy labor intensity and bad working conditions The job duties of frontline employees are monolithic and employees lack the authority to make decisions Moreover, the incentive mechanisms in most restaurants are deficient, with a negative impact on employees’ creativity and initiative (Ma, Qu, & Njite, 2011; Qu, 1997) Like most other restaurants in China, the majority of frontline employees of Hai Di Lao come from rural areas in China and most have not received higher education However, its monthly frontline staff turnover rate is just about 10%, which is far below the national average; at the management level the rate is almost zero Human Resource Management Zhang Yong suggests four reasons for the low turnover rate: (1) developing a motivational system for the workforce; (2) offering competitive compensation; (3) showing workers that they are respected and valued; and (4) providing rewards tied to performance Developing a Motivated Workforce Unlike other dining enterprises, Zhang Yong argues that the best way to attract and keep employees is to create a company culture in which people are treated with respect and consideration at all times (Huang, 2013) According to the Hai Di Lao cultural precept, “the value of fairness and taking fate into your hands”, the company not only favors employing the young and well educated, but also selects according to essential qualities such as honesty, a hard-working personality, friendliness, helpfulness, and so on New employees in Hai Di Lao are required to work through a month’s trial including days of orientation to help them understand the company culture and undergo skills training In an attempt to motivate them and create enthusiasm, all managerial positions are filled by internal promotions In addition, anyone who wants to be promoted at Hai Di Lao must rotate through other positions and receive a certificate of approval from each of them, a move intended to guarantee that managers understand the needs and expectations of customers and employees (Huang, 2013; Zhao et al., 2011) Offering Competitive Compensation In China, front of house jobs (such as waiters or waitresses) are normally regarded as unstable and of low social status However, Hai Di Downloaded by [University of Saskatchewan Library] at 09:18 02 April 2016 Journal of China Tourism Research 343 Lao stands out from the crowd, and its employees contribute to its outstanding market performance by being enthusiastic and creative They normally report high levels of satisfaction as the company offers competitive compensation Based on “the value of fairness and taking fate into your hands”, Hai Di Lao retains and motivates employees by providing better conditions and more structured payment levels than other enterprises and providing more opportunities for career development (Hong, 2011; Huang, 2013; Ma, 2008; Zhao et al., 2011) All employees are allowed to live in rent-free apartments with air-conditioning, Wi-Fi, washing machines, televisions, and even nannies Those who have worked as assistants or higher-level managers for more than six months can also receive a subsidy for their parents Furthermore, Hai Di Lao has a Family Care Team and sets aside a budget of 100,000–200,000 RMB each year to help employees with family crises and emergency needs (Zhao et al., 2011) Based on Zhang Yong’s collectivist orientation, Hai Di Lao is viewed as a family by its employees The principles of impartiality, equity, fairness and justice, organizational and employee wellbeing, and participation are embedded in ancient Chinese texts However, Hai Di Lao has turned these principles into practice Taking the main characteristics of Confucianism and familybased collectivism as the main value base of Hai Di Lao ensures that employees and their families feel cared for, respected, and trusted; and they operate as a family Respecting and Valuing Employees In Hai Di Lao, the principle of interpersonal trust strongly motivates passion and service innovation amongst employees There is no KPI or balanced scorecard; but in terms of Taoism it is believed that if you trust and respect people, they will trust and respect you in return Zhang Yong believes that employees should be respected and trusted (Huang, 2013) Empowerment raises the efficiency of employees’ interactions with customers in Hai Di Lao For example, frontline employees are granted the authority to make decisions about whether to offer free appetizers or discounts to customers, enabling them to respond quickly to unexpected situations Providing Performance-based Rewards As noted above, Hai Di Lao motivates employees by providing better compensation and living standards; moreover, its performance evaluation system is based on customer satisfaction and employees’ passion for their work Assessment includes not only the service quality during the meal, but also greetings from waiters, the ordering process, the dining experience, the post-meal service, and much more For instance, in order to encourage service innovation, every Hai Di Lao restaurant compiles employees’ ideas and suggestions on a monthly basis and reports them to the company’s creativity team The creativity team then evaluates the ideas and selects those which are practical for implementation Those who proposed the ideas are rewarded with bonuses Service Quality and Customer Satisfaction Every customer is bound to have their own perceptions of what they expect from a restaurant As mentioned above, customers play an active role during service delivery Accordingly, it is important to investigate the service offered by Hai Di Lao Hot Pot Restaurants and the effect on customer experience There is no doubt that customer service management is the critical factor in Hai Di Lao’s success Therefore, participant observation in this study focused on how staff of Hai Di Lao offer exceptional service to their customers and how service innovation contributes to the business The main purpose 344 Chen Chen et al Downloaded by [University of Saskatchewan Library] at 09:18 02 April 2016 of the online comments analysis was to understand customer satisfaction with the chain’s products and services Exceeding Customer Expectations Customers’ perception of value and satisfaction begins with the initial purchase and continues throughout actual ownership and the overall service experience Normally, the queue for a table at Hai Di Lao is long, so advanced reservation is necessary In general, the Hai Di Lao telephone operator is careful to ask for every customer’s particular taste in order to facilitate good preparation Once the customer arrives, free parking and a free car cleaning service are available When the customer arrives at the restaurant entrance, he or she will be warmly welcomed by ushers who will introduce extra services such as complimentary manicures, board games, and a play area for children Once all members of the party have arrived, each will receive an apron to protect their clothes from food stains Extra care is taken to ensure that their belongings are protected from food For customers with long hair, hair bands and clips are provided to prevent their hair from falling into the food Guests with glasses are given a lens cleaning cloth to deal with steam from the hot pot On a buffet table nearby are a wide range of condiments and sauces All drinks come with free refills In addition, all the dishes can be ordered in half portions During the observation, it was noticed that as customers ate and talked, different servers came in and scooped away the layer of oil that gathered on the top of the soup, gave details of the specials, and served and refilled drinks A highlight of the menu is the Sichuan Opera face changing (an ancient Chinese dramatic art that is part of the more general Sichuan opera), which is performed at the tableside in front of the customer A customer was observed to ask the waiter for some watermelon, and after a few minutes the waiter brought two trays of hand-cut fruit, which was a surprise and much appreciated by the customer After the dinner, Hai Di Lao provides two flash photographs per customer for free All customers participating in the observation thought that the whole experience was very enjoyable Not only was the food fresh but, more importantly, the customers felt relaxed and cared for, with consistently outstanding service The observers, for example, commented, “I thought that was very considerate of them!”, “I have to say, this place really lived up to its name of providing the best service and excellence is really in all the tiniest details”, and “we had such an enjoyable time; we had a four-hour lunch there! Yet none of the staff ever pressurized us to leave, and it was all considerate” Service Innovation in Hai Di Lao The importance of service has been widely recognized by corporations, institutions, and governments Service innovation is essential to create value and maintain competitiveness However, it is difficult for many firms to shift from innovative concepts and process into practice For Hai Di Lao, the reality is that it is easy for competitors to imitate their shoe shine and nail polish stations, even if the chain is legendary for its customer service In China, good service is rarely found outside private dining rooms in formal banquet restaurants However, to maintain competitiveness, service innovation and standardization remain important According to the participant observation and secondary data analysis, the founding principles of innovation in Hai Di Lao can be characterized as having two levels: service- and firm-level innovation Since 2013, Hai Di Lao has been operating 24 hours a day and providing takeaway service Customers place orders on the phone and Hai Di Lao delivers the food, an electromagnetic pan, an induction cooker, a wiring board and so on, to their homes, helping customers to mix the seasoning, and then collects everything the next day In Downloaded by [University of Saskatchewan Library] at 09:18 02 April 2016 Journal of China Tourism Research 345 terms of firm-level innovation, empowered employees are likely to be more cognitively active and able to modify their own behaviors and attitudes towards customers They internalize customer feedback into their personal conduct and analyze the effects of different behaviors on outcomes To motivate employees’ service innovation, each Hai Di Lao restaurant compiles employee ideas and suggestions on a monthly basis and reports them to the company’s creativity team The creativity team evaluates the ideas, chooses the practical ones and implements them The ideas are posted on the staff intranet and follow-up assessments are conducted every three months after implementation Hai Di Lao creates an open-minded platform to enable employees to contribute their ideas and suggestions based on their practical experiences During the participant observation, it was noted that Hai Di Lao provides a Sichuan Opera face changing performance during the meal When a customer orders noodles, the chef will offer a noodle-pulling demonstration at the tableside Customers can take pictures and print them out at the restaurant Customer Satisfaction It is commonly said that what is not measured is not managed Service quality can be used as a measure of how well the service level delivered matches customer expectations; but it is difficult to measure due to the unique characteristics of services: intangibility, heterogeneity and inseparability (Zeithaml et al., 1988) Customer satisfaction alone is sufficient to generate repeat purchases Indeed, it is a basic prerequisite in the highly competitive restaurant industry According to Zeithaml, Parasuraman, and Leonard (1990), customer satisfaction is measured by items related to the service, food, and overall feeling about the experience The intangible nature of restaurant services makes the industry heavily dependent upon the image of companies and word of mouth for generating repeat and recommended sales (Bowie & Chang, 2005) Although it is essential for service providers to know and understand what customers want, it is still difficult for them to meet these needs and deliver high-quality service The gap between service providers and customers still exists in practice (Wildes, 2007) Customer satisfaction depends on how well the service received by customers matches their expectations (Zhang, Zhang, & Law, 2014) Online user comments and reviews have therefore become important inputs to consumer decision making as well as a means to express satisfaction, particularly for restaurants The preliminary analysis of customer reviews performed for this study indicated that most comments focused on the service received in a Hai Di Lao restaurant Some reviews specified the name of the waiter or waitress in order to personalize their experience and to express their customer satisfaction when the employee had made their dining experience unforgettable Table lists the four main thematic categories of the positive comments posted online (Sureshchandar, Rajendran, & Anantharaman, 2002) The reviews indicated that a large number of customers were impressed by the service quality of Hai Di Lao, which was considered the main reason to dine there Meanwhile, the factors characterizing the excellent service received in the four selected restaurants were very similar to those identified in the participant observation It was also apparent that customers were impressed by service that had exceeded their expectations, and that this was more likely to motivate their emotional relationship with the restaurant For example, some online comments referred to having a birthday dinner for their parents at a Hai Di Lao restaurant and being well cared for and offered special services and gifts This encouraged the commenter to be loyal to the brand Some customers preferred Hai Di Lao due to the relaxed, enjoyable, and pleasant social atmosphere created by the service It was also apparent that customers who received service beyond their expectations tended to provide more details about their experiences, such as 346 Chen Chen et al Table Customer Comments about the Four Factors of Service Category Core product (2 items) Downloaded by [University of Saskatchewan Library] at 09:18 02 April 2016 Human element of service delivery (8 items) Tangibles of servicescapes Price Item Example quotation Authentic; Fresh Great taste, especially delicious mashed shrimp wah Tomato pot is my favorite Attentive; Prompt; Neat The food is delicious, and the service is appearance; impeccable Understand needs; Hai Di Lao has very humanized services Courteous; with valuable price Knowledge of menu; Service is still as superb as always Exceed expectations It is one of my favorite restaurants, and I especially like the service here A waiter with glasses was always warm, smiling, and understood our needs The ramen performance is attractive and interesting I like Hai Di Lao since it allows me to order half portion, and I can return the food if it is too much The main reason I always have hot pot here is due to the thoughtful service They are sincerely improving the customer experience from all aspects Even during the waiting time, we enjoy the service in Hai Di Lao Environment; The food and service are good, and the Temperature just environment is also very nice right; Appropriate It’s a good restaurant for family dining lighting; Cleanliness; We always come and the environment Adequate parking is very good space Paid what was It’s a little bit more expensive than other expected; Expensive; hot pot restaurants, but dining in Hai Di Paid more than Lao is more comfortable and happy expected Everything is good, except that the price is getting more expensive Cheap and affordable, but always a long queue Note Based on a sample of 10,233 online customer comments about Hai Di Lao Hot Pot restaurants located in Beijing, Shanghai, Shenzhen, and Xi’an on www.dazhong.com what they had eaten, the waiters/waitresses’ names, a specific service that had impressed them, their sensations and feelings, and so on This is probably because the reputation of Hai Di Lao’s service is such that customers attend with certain expectations, with the legendary service mentioned in a large number of the online customer comments Journal of China Tourism Research 347 Downloaded by [University of Saskatchewan Library] at 09:18 02 April 2016 Looking Forward Although it is essential for service providers to realize what customers want, it is still difficult for them to realize customer’s desirable needs The gap between service providers and customers still exists in practice Hai Di Lao provides a typical example of managerial practices that motivate employees to express enthusiasm based on the nature of their background and the organizational culture The Chinese service industry, particularly in catering, is fiercely competitive While other brands are now learning from the Hai Di Lao experience, Hai Di Lao has also prepared for its own future by expanding its market into the United States and Singapore It is also investing in information technology to control raw resources and continually improving customer satisfaction Despite having a solid staff and customer base and focusing on innovation, Hai Di Lao’s future development will still take time and face the pressure of competition The demands of both internal human resources and external customer expectations are high given the rapid expansion of the brand and risk inhibiting development, therefore Hai Di Lao’s product and service standardization still faces challenges Ultimately, the success of the company depends on the performance of its employees Nonetheless, with increasing labor costs and more “Generation Y” entering the labor market in China, human resources management will remain a big challenge for Hai Di Lao Disclosure statement No potential conflict of interest was reported by the authors References Berry, L., Carbone, S., & Haeckel, H (2002) Managing the total customer experience Sloan Management Review, 43(4), 85–89 Bowie, D., & Chang, J C (2005) Tourist satisfaction: A view from a mixed international guided package tour Journal of Vacation Marketing, 11(4), 303–322 doi:10.1177/ 1356766705056628 Briggsa, S., Sutherland, J., & Drummond, S (2007) Are hotels serving quality? 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Lao hotpot, “You can never learn his way!” Retrieved from http://press.emerson.edu/imc/2011/12/19/a-new-fairy-tale-of-chain-restau rant-HaiDiLao-hotpot-you-can-never-learn-his-way/... Chinese chain Hai Di Lao Hot Pot is gaining popularity The hot pot concept is different from traditional Chinese cuisine It allows customers to participate in the cooking experience by offering different... Jianyang, Hai Di Lao, whose name roughly translates to “scooping treasure from the bottom of the sea”, has become the dominant hot pot restaurant chain in a country obsessed with hot pot (Zhao,