When thinking about the restaurant industry, one must
understand that there is a wide variety of products offered. Different companies provide different
products to different markets. Whether
they use demographic, psychographic, or geographic segmentation to divide these
markets, they try to make their product more appealing than those of similar
restaurants. Some of the main types of differentiation used are the type of
food (origin, style, and quality), the cost of the food, and the experience
while dining (quick service, fast casual, or full service). Another thing that many restaurants keep in
mind is the health factor of their menus.
Restaurants
differentiate themselves first through their dining experience. A quick service establishment, such as
McDonald’s, will typically offer unhealthier, lower quality food than other
restaurants, and, according to Mealey (2012), they attract customers for their
speed, convenience, and cheap prices. Fast
casual restaurants like Panera and Chipotle tend to be more upscale than a
quick service restaurant (Mealey, 2012), but not as high quality as a full
service restaurant. The fast casual
restaurants offer quicker service than the full service restaurants as
well. Full service restaurants, such as
Olive Garden or Red Lobster, will usually offer waiting services and will be
more family oriented. Their food also
tends to be a better quality than either of the other restaurant types.
Another type
of differentiation would be the type of food that is provided at each
restaurant. Some companies offer
burgers, wings, and fries, while others have a broader approach, choosing
Italian or Chinese food for their restaurants.
This helps create options in an industry where everyone essentially
provides the same thing: a place for people to get food. Some restaurants are known for having better
quality foods, and others are known for providing a lot of food per meal.
Many
restaurants differentiate themselves through their pricing. Companies choose to either offer lower quality
food at a lower price, better quality food at higher prices, or anything in
between. This allows companies to target
certain demographic segments to maximize profit.
As I mentioned earlier, many
restaurants are offering more healthy and organic foods in order to satisfy the
wants and needs of today’s consumers. The
companies who do this are set for growth in the future.
Cited Sources:
Mealey, L. (2012). About.com. Retrieved from http://restaurants.about.com/od/restaurantconcepts/tp/Different-Types-Of-Restaurant-Concepts.htm
I believe that in order to have a successful restaurant in this industry, product differentiation is vital. From my own research, I know that Chipotle differentiates itself from others by providing healthy and relatively low priced foods. I feel that restaurants will constantly be changing the way they provide their service and goods because the needs of customers are constantly changing as well. Restaurants need to find ways that separate themselves from competitors.
ReplyDeleteI think product differentiation is probably the hardest part about running a restaurant business. As Jennna said, because the needs of the consumer are constantly changing, so are the products by these restaurants. Based on a lot of the research I did, McDonald's did not have those healthy choices--like smoothies or fruit cups--up until about a few years ago. This is due to the rising obesity and diabetes concerns as well as an interest in a more organic, healhty lifestyle.
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