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T.G.I. Friday’s Corporation: Delivering Added Value Essay

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Updated: Jul 29th, 2022


Purpose of report

This research is claimed to compare, analyze and estimate the theories of added value by examining the T.G.I. Friday’s Corporation. After the research is made, it will be possible to compare TGI Friday’s corporation with the other companies of the fast-food industry, thus making an important contribution to the development of economic science and market analysis. Investigating the issues of the relevant added value theories, and the presentation of T.G.I. Friday’s, added value concepts will be evaluated and analyzed within the organization, and also recommendations and conclusions will be given. One of the primary aims of the report is to highlight the vital importance of delivering added value in the sphere of a hospitality business.

Importance of delivering added value

The obviousness of delivering added value is quite open and understandable. Any enterprise which practices the DAV concepts has much more chances for success incompetence, as the main aim of these concepts is to help to succeed. The concepts of added value have always been regarded comprehensively as the marketing strategies in order the corporation or enterprise could be competent within the hospitality industry, and it is important to find the location for the organization with added value in the market, in order the significant benefits could be achieved. The value concept is usually defined as the price of some definite achievement or object in relation to the needs of an individual (or organization) at the exact time. de Chernatony, Harris, and Riley (2000) implied the three categories of value, which integrated pricing, consumer behavior, and strategic value. As customers attain the top level of value, they are willing to stay with the enterprise. It is suggested that customers care about the relations with a service organization where they found that is important, and it is also provided that they expect to gain extra benefits from the related costs.

The added value concepts specify how the company builds up steady and stable relations with customers. It identifies the necessary contribution that corporations can make to improving services.

Moreover, service enterprise needs to grow stably in the concerns of fast-changing trends and globalization; delivering added value can be the instrument for positioning and supporting its brand. A strong brand allows customers to recognize the top value of the services or goods, hence, it can retain existing customers and attracting new customers (de Chernatony et al. 2000).

Overview of added value

Delivering added value concepts start their existence in the 1970s. The first attempt to implement something likely to that had been called The Value Reporting. It gained popularity within most European countries. The United Kingdom became the first country that started theoretical researches in the sphere of accounting and arranged the first accounting institutions to research the issues of added value.

The first report was made by Accounting Standards Steering Committee in 1975. It offered the key statements, including how the benefits may be distributed among the employees, investors, and state. In particular, it contained the following statements:

  1. The easiest and the most rapid way of putting revenue into appropriate perception visà-vis the whole corporation as a group attempt by capital, administration, and staff is by the arrangement of an account of value-added. Value-added is the prosperity the reporting unit might have been able to generate by its own and its staff’s hard work. It usefully complicates the revenue and expenditure of accounting and may be viewed as the best way of describing performance.
  2. The concepts of added value provide the means to succeed in calculating the activity The DAV may be the indicator of the success of net and teamwork

The report caused enormous growth of the companies, offering the Added value statements, and that growth helped the trade union to set up the standards of the DAV’s.

Ahmed Riahi-Belkaoui in the book (p.3, 1999) provides the formula of an added value statement, which can be extracted from the income statement:

R = S – B – DP – W – I – DD – T (1)


R = retained earnings
S = sales revenue
B = bought-in materials and services
DP = depreciation
W = wages
I = interest
DD = dividends
T = taxes

The added value in the market is an up-to-date method of attracting customers. Evaluating the market of nowadays, T.G.I. Friday’s also offers sustainable suggestions of surviving in business.

There are hundreds of suggestions published and practiced in real life that prove the competitiveness of the hospitality industry. Service management is a big structure that has been built by means of tries and mistakes and has been developed into a threateningly strong management tool without which business itself would not survive. These are the eight main components of service management: product elements, place and time, process, productivity and quality, people, promotion and education, physical evidence, price, and other costs of service. Every each of them is an important component that doesn’t have as much value existing alone as it has in a powerful mix.

Added Value concept is aimed to improve the use of the company’s inner resources in gaining success and financial benefits by distributing these resources among the staff. Hence, if profit is gained by one working group, the financial benefits are allocated among all the workers. The added value may also be regarded as the pretax profit addition to the income interests.

T.G.I. Friday’s offers millions of people services which they convince to be of good quality, meeting all the customers’ expectations.

Company profile (T.G.I Friday’s)

T.G.I Friday’s is a domestic market for snacks alone, where growth is driven primarily by the implementation of innovative products, which was estimated to be approximately $60 billion in 2004. Salted snack products – account for nearly 40% of the market, with the balance consisting of cookies, candy, crackers, bars, and other baked goods, etc.

The Company’s successful introduction of T.G.I. Friday’s brand snacks give an ability to combine nationally recognized licensed brands with their abundant and unique manufacturing and marketing capabilities to create high-impact niche snack food brands.

The Company’s strategy is to complement rather than compete with Frito-Lay, Nabisco, and other large food companies by creating niche brands. In the Company’s view, many smaller snack food manufacturers emulate Frito-Lay products and thus compete directly against them without a competitive advantage and do not possess the Company’s product innovation or branding capabilities.

The company had been chosen by the author as one of the leaders in the fast food industry in the USA and throughout the world. In spite of its comparatively short history (the first café appeared in 1977), its net and quality levels have been developing steadily, and 30 years anniversary the company has been celebrated by more than 500 restaurants.

Findings and Analysis

Target Market

The Target Market of the TGI Friday’s corporation is providing high-quality fast food services. It is oriented to youth, primarily students, and young families. The company steadily distributes and develops its activity throughout the whole world.

Friday’s is looking for franchises with considerable hospitality practices operating multiple (3+) restaurant positions and the ability and infrastructure to apply an aggressive growth strategy. Although additional markets may be available, Friday’s proclaimed the following target markets for potential franchises: Alabama (Montgomery), Georgia (Savannah, St. Simons Island, and Valdosta), Hawaii (Kauai and Maui), Louisiana (multiple markets throughout La.), Mississippi (Jackson and Meridian), Montana (Billings, Bozeman, Great Falls, and Missoula), New Mexico (multiple markets available), Oregon (Bend, Eugene, Roseburg, and Medford), Texas (El Paso, McAllen, Harlingen, Lerado) and Wyoming (multiple markets available). (T.G.I. Friday’s® Media room, 2007).

Market Segmentation

In the service industry, segmentation is an important feature for adding extra value to the products and services. As Ferrell and Hartline (2005, p. 151) point out “Fragmentation means the creation of differences in the company’s service offerings and production that shift it off from contending submissions and different features of the production, extra services, or other features”. As the quick-service menu is applied to the entire restaurant’s world wide, and it is a simplified and standardized chain restaurant, that create the distinctions with other conventional or family-owned restaurant (Powers and Barrows, 2006).

The segmentation is the following: crisps and French fries, Savoury snacks, Nuts and peanuts, Mini savory biscuits.


The positioning of goods and services on the market is the set of instruments and measures, which help to provide the enterprise’s competency on the market. In order to gain it, the product or service must be unique, principally new or just well known and popular among the customers. TGI has all the chances as a successful enterprise for victorious service positioning. The popularity of this restaurant net within the American youth is tremendous. The variety of meals and beverages tend to increase each year, and now more than 150 meals and 30 beverages (both alcoholic and non-alcoholic) available. Innovations in the services are the inevitable factor of company growth and competency maintenance. Thus, for example, this spring, T.G.I. Friday’s pronounced what it called an “unprecedented move in the casual dining industry” when the café chain began offering smaller portions at lower prices for some dishes. Called the “right portion, right price” menu, it involves six new smaller entrées–such as Asian-glazed chicken with fresh greens and cedar-seared salmon with pasta–and also began presenting smaller portions for four of its long-standing menu favorites like shrimp Key West and baby back ribs. These “right portion” menu options offer about one-third less food than regular-size orders. The price of these “right portion” meals is also about one-third less, ranging from $6.99 to $8.99 each.


There are three various stages of products identified by Palmer (2005). The first inner stage is the main product, which includes meals and beverages served in the restaurants. The second stage is the tangible products, which is usually the presentation of their staff, restaurant, courtesy, serving, and interior. The third and highest stage is enlarged product level, such as special menu every season and in different countries, small gifts and the gift vouchers, holding birthday parties for children and donation to charity.


The name is taken from the expression “TGIF”, or “Thank God It’s Friday.” The restaurant chain is known for its appearance, with red-striped canopies, brass railings, Tiffany lamps, and frequent use of antiques as decor (Wikipedia, 2007).

Schultz and Barnes (1999, cited in Grönroos, 2000, p. 289) underlined different brand contacts in the services of TGI, which included “the employees, advertising, word of mouth” etc. TGI Friday’s Charities is held for helping sick children, as for example the annual Friday car show, aimed to raise funds to help children with leukemia decrease. Corporation also sponsors various childish arrangements. In this case, customers are not only consuming a meal but also an extra value of helping children.

The interior of any restaurant on the net is unique. Everybody is able to recognize it from afar by the red and white striped tents, and the same colored banners.

The owners of the TGI brand use it for lots of purposes, such as:

  • Brand management
  • Intelligence in the sphere of competence
  • Segmentation and trend analysis of the market
  • The development and promotion of new products
  • Elaboration of corporate strategy
  • Relations with customers
  • Exploration of new markets

Physical evidence

The features which help to define TGI from any other fast-food restaurant or café are partially enlisted in the chapter “Branding”. These are red and white striped tents, and the same coloring of corporative wraps and packages. The cozy interior distinguishes it from any other fast food restaurant, as the others strive to decorate the rooms in modern technological style. TGI is also differed by the variety of meals and beverages (especially alcoholic cocktails under the brand name of TGI Fridays).


The human factor in added value concepts can be separated into two categories, staff and visitors/customers.


In the hospitality business, service comes across the interaction between the staff and guests; though, one of the attributes of services is variability (Egan, 2004). That means the service attained by every customer may differ from each other. Thus, the ‘moment of truth has to be well regarded and it affects the distinguished quality of service (Lovelock et al., 1999). With the intention of delivering added value to the guest, organization of service encounters and management of service employees are necessary. To reveal with Friday’s, managers are well experienced and well trained within the company’s training programs. Therefore, the staff is inspired to serve and work, and so the visitors are more guaranteed to get a positive service experience.

The HRM practices require hiring the right people, empowering them by training, and energizing them. As for the right people, the best variants for such companies are to hire unqualified staff, such as students, willing to earn their pocket money, or provincial people or immigrants, who are seeking a better life in the cities and do not have the higher education diploma.

Training courses for the waiters are the common practice within fast food corporations. It happens so, because the managers try to reduce the turnover, and by training attach the employees to the company.

Energizing is fulfilled by corporative parties in the cases of successful work, or in honor of some holidays.


Customer attracting

Customer attraction can affect the run of services in fast food commerce. Since the services of the corporation are building up a communication channel with the visitors, positive relations can be attained, therefore, the guests are encouraged to share their impressions with the service providers and friends, and also augment the positive talks. Clients feel engaged in the process of servicing, (Grönroos 2000, p.290) so they may be the important marketer for the organization.

The service provision model is the outline of visitors’ involvement in the purchasing of services or goods, and how to delivery bundle of benefits. (Warnaby and Davies, 1997) There are two main points within the model, tangible and intangible parts, the tangible one is the physical factors of an enterprise involved in the hospitality industry, it can be the interior of restaurant, menu, table setting or service providers. The intangible elements are the supporting services or goods, which can be the organization structure or system. As the visitor not only plays the role as the consumer but sometimes the co-producer in the service. The customers’ participation in the process can impact the nature and quality of services, and even may participate in self-service (Martin, Horne and Chan, 2001).

The TGI Friday’s corporation also anxious about their customers’ satisfaction, and eagerly create positive talks of the customer, therefore, a worldwide duty-free hotline is set for collecting feedback from guest. For example, in the USA, a toll-free number (715-833-6796) exists in order for the customers could contribute their comments, book the table, or get acquainted with the menu.

TGI Friday’s CRM

Delivery Service

The delivery service of the TGI Corporation is closely connected with the services by Takeout Taxi. Demand for off-premises dining continues growing. According to the NPD Group, a Port Washington, N.Y. research firm, Takeout and Delivery orders have increased 6% in the last year and makeup 10% of the overall volume at casual-dining restaurants. With key national Restaurant Partners such as California Pizza Kitchen, Chevy’s, Chili’s, Damon’s, Hamburger Hamlet, Romano’s Macaroni Grill, and T.G.I. Friday’s, as well as popular local and regional restaurants, the Takeout Taxi operators are well-positioned to take advantage of this trend.

To find and book the Restaurant Delivery Service industry by Takeout Taxi customers may visit the Restaurant Marketing and Delivery Association (RMDA) website at www.rmda.info

Internet Marketing

Lots of potential TGI’s visitors are travelers who usually just want to have a bite. “Many of our guests like to visit our restaurants while traveling,” said Stacy Baw, Internet marketing manager for Carlson Restaurants Worldwide. “Since many U.S. cities have multiple TGI Friday’s locations, the restaurant locator enables wireless device users to highlight the closest one, even if they’re unfamiliar with local surroundings.”


The added value conceptions play a significant role in the marketing strategy of the hospitality business, which aims at the customers’ satisfaction of the extra benefits. The added value factors have been analysed, and those are product (goods and services) and people (customers / visitors and staff). For products which include the definition of goods and services, commercial and social responsibility, and building up the brand name. For employees who are the service encounters, and customers’ involvement of service process.

The analysis of the T.G.I. Friday’s Corporation revealed that the company can be described as triumphant in delivering added value, either to the staff, customers, and their products and service offerings. However, some improvements can be implemented, therefore, to provide higher added value to the customers.


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