Why restaurant marketing segmentation is important
Restaurant marketing segmentation
A business cannot be all things to all people. To market its products cost-effectively, it must clearly identify its customers and the market segments they belong to. Without this clear identification of the businesses’ market, its whole marketing activity is wasted in terms of time, resources and finance.
Your market can be divided into segment or sub-groups of the whole market, with each segment having different characteristics and needs. Imagine the concept rather like a pie. The whole pie is divided into slices (segments). Each slice is divided into bite-sized chunks which are your ‘target markets’.
There are four main factors to help you identify your target market geographic, demographic, psychographic and behaviour.
Geographic factors
Where people live:
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- Region: national, State
- City: by population or number of houses
- Urban/rural: town or country
- Climate: tropical, dry, wet, hot, cold and so on.
For example, in Australia, we have cold weather in the southern regions, wet weather in the northern and coastal regions and dry weather in the interior. Such information would obviously be taken into account by a cafe with alfresco dining.
Another example is a fish and chip shop may draw most of its custom from a two or three-kilometre radius, while customers may be willing to travel ten times that distance to a specialised quality restaurant.
Demographic factors
Refers to such characteristics as:
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- Gender: male or female
- Age: child, teenager, adult, retired.
- Family life cycle: young, single, married, divorced, and so on.
- Occupation: professional, managerial, clerical or trade.
- Education: primary, secondary, tertiary qualifications, trade qualifications.
- Family size: number of children.
- Nationality: English, Italian, Chinese and so on
- Income levels: $25,000-$39,000, $50,000-$75,000 or any groupings needed.
Specific market segments may be identified in the food industry according to their age. The younger 18-30 age group are more willing to experience new ideas, they like to dine and be seen in fashionable restaurants and bars. The older age group may experiment less but could form a large part of a restaurant’s repeat business. The higher the disposable income, the higher the propensity to spend more on going out.
Psychographic factors
Psychographics looks at personality characteristics. It helps you to understand how potential customers will perceive your product/service.
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- Social class: upper, middle, lower, and so on.
- Personality type: ambitious, self-confident, aggressive, sociable, introverted etc
- Lifestyle: physically active, health-conscious, environmentally conscious, hobbies, interests and so on.
- Usage rate: non-user, light user, the heavy user.
Behaviour factors
Behaviour looks at the purchasing behaviour of customers, the when, how and who of purchasing decisions and motives for purchasing products/services. For example, how far customers will travel to a cafe, why they choose a particular cafe and whether they just have a coffee or buy lunch.
Generally, potential customers will fit into more than one of the above market segments. There are many different ways to segment the market and combinations of geographic, demographic, psychographic and behavioural segments are most useful in obtaining an overall picture of your likely customer base.
Restaurant Marketing Plan
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