In
order to attract a variety of consumers and increase revenue restaurants need
to focus on market segmentation. The restaurant industry is segmented by geographic,
price, demographic and psychographic (Thomas,
2011).
Many restaurants such as chains use
geographic segmentation to concentrate their focus on specific regions or
areas. Consumer preferences differ regionally, which is why geography is
important when aiming to market a product or restaurant. For example, a
restaurant could decide to market their product in one area of the country, but
not another. People from the South may prefer fried chicken, whereas people
from the North may prefer a different food (Thomas,
2011).
Price segmentation is a very common among
restaurants. Since income can vary widely based on households, customers are
looking for different products. Some restaurants offer cheap products, while
other restaurants will offer expensive products. The price displays the
difference between a fast food experience and a fine dining experience. Usually
lower income families will be attracted to fast food restaurants that offer
good food at low prices and wealthier families will be attracted to expensive
restaurants that offer very high quality food (Thomas,
2011).
Restaurants use demographic segmentation
to determine what customers want based on their age, gender, education level,
and income. These factors help restaurants determine the spending and eating
habits of customers. For example, families with larger incomes will typically
eat out more than those with smaller incomes (Frisch,
May 2006-2012).
Psychographic segmentation is used to
determine what customers want based on their values, opinions, culture,
behavior, and lifestyle. For example, if a large amount of customers live a
kosher lifestyle in the surrounding area, then a restaurant will want to make
sure that it can provide kosher foods, which may set it apart from other
competing restaurants (Frisch, May 2006-2012).
Restaurants use target marketing strategies to
gain a competitive advantage with Geographic, price, demographic, and
psychographic segmentation. This is a tool that restaurants use to help reach
out to specific customers. I believe that this is a very important aspect of
marketing because restaurants should completely focus on trying to provide for
the customer based on his/her interests and needs. These marketing strategies
help a restaurant eliminate competition, bring in revenue, and satisfy the
customer.
Cited Sources:
Thomas, J. W. (2011). Market segmentation. Retrieved from http://www.decisionanalyst.com/publ_art/MarketSegmentation.dai
Frisch, E. (May 2006-2012). Demographics for restaurants. Retrieved from http://www.foodservicewarehouse.com/restaurant-equipment-supply-marketing-articles/restaurant-marketing/demographics-for-restaurants/c28060.aspx
Frisch, E. (May 2006-2012). Demographics for restaurants. Retrieved from http://www.foodservicewarehouse.com/restaurant-equipment-supply-marketing-articles/restaurant-marketing/demographics-for-restaurants/c28060.aspx
The market segmentation of restaurants in very interesting. My question is that which of these do you think restaurants in the industry focus on the more. If I had to guess, I would say geographic segmentation. It seems like this factor would play a huge role in where companies what to serve their food and what type of food they want to serve.
ReplyDeleteErik in response to your question, I would actually say that they focus more on income because restaurants build their advertising techniques around their menu prices. For example,McDonald's calls a lot of attention to their low prices to attract consumers and those who do not necessarily offer that advantage have to redirect their strategy to focus on their strengths.
ReplyDeleteI think segmentation is the most easy and important way for customers to greatly increase their profit. Marketing a restaurant to the completely wrong demographic could certainly prove detrimental. So, to jump in with your conversation, Erik and Candace, I think psychographic segmentatoin is used the most. As Jenna said, if living a kosher lifestyle is what most in the community do, people NEED to have that as an option; they will not change their dietary need. I think that people will occasionally pay a little more or a little less for a restaurant product, though.
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