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Functional value signifies the ability or capability of a service to meet with given need. While status value is more of a percieved one from customer in terms of uniqueness and posession of the service based on users sense
Status value is added in the restaurant through high quality service and understanding the requirement of customers and make their service delightful. More than food they should leave the restaurant with a unique experience and that makes them more loyal to the restaurant. It helps in enhancing the word of mouth of publicity as well.
Improving the product needed more focused research which includes how their competitors do their business and how it can be unique with the help of special recepies and additional offers. Taste should have consistency and uniqueness and they can customise their recepies based on customers preference. Understanding the cultural significance of food and use authentic spice and other flavors which can give more freshness and uniqueness to their food.