Once, I asked my client, who ran a Pizzeria in Dubai: “Who is your target customer?” He said: “All pizza eaters.” In that moment, I realized that I had to start, not from a web marketing plan, which was the reason I met him, but from the rudiments of marketing. There is no worse thing in the restaurant business than trying to appeal to everyone because, at the end, you will get no one. Determining the exact restaurant target customers is crucial for any manager who wants to reach the top.
To say that we are all different might seem trivial; however, in the marketing and business field, it is one of the most important statements. The same product can attract a person and may not appeal to another or there may be different customers, who go to the same restaurant to eat the same dish, but for different reasons.
Take a couple of minutes to understand why defining the right restaurant target customers, namely who is most likely to enjoy your establishment, is crucial for reaching success.
Let’s make some preliminary remarks.
What is a market?
Although over the years, the term “market” took on various meanings; in marketing we refer to the whole of current and potential buyers of a product, and in particular, in the food retail business to the people who are likely to dine at the restaurant, as well as the actual ones.
In today’s context, regarding your prospects, it is not feasible to get all of them, at least, not in the same way.
To put it simply, when you go fishing on boat, all the fishes around you represent the market. But not all them are the same: there are amberjacks, groupers, octopuses, morays, and so on. With the same hook and bait, you might catch some species, but not all; you can’t take an octopus with rod and live bait. An experienced fisherman knows which species to fish for and how to catch each one.
Prospects are very different from each other; they vary in needs, tastes, and habits. Until not long ago, big companies spent significant sums of money to attract everyone in the market.
Subsequently, they realized they have to take into account the differences among customers, and therefore, they moved from what is called Mass Marketing to the Niche Marketing. In particular, they went through three stages:
1. Mass Marketing. According to this approach, companies produce, distribute, and advertise only one product to the mass. For example, McDonald’s provided just one-sized hamburger for the whole market, in the hope that he could please all.
The argument in favour of mass marketing is that it should reduce production costs and create a broader potential market. The problem is that the more the competition increases, the more the customer will look for more specific products.
If you open a Pizzeria in a place in a city, where there are no competitors, you can sell only the Margherita and try to get everyone. But if another pizza seller opens close to you, making more kinds of pizza, things get complicated.
2. Differentiated marketing. Companies offer two or more products with different quality, features, sizes, etc. For example, McDonald’s provides standard hamburgers, Big Macs, and those of one hundred grams. Doing so, companies offer a varied product to the same customers, rather than attracting new segments.
The argument for differentiated marketing is that customers’ tastes vary over time; therefore, this strategy allows to get customers’ loyalty. Often, however, those who adapt this strategy only centre on one segment, failing to get others.
3. Niche Marketing. Companies that detect different market segments, select one or more, and develop products designed for the characteristics of each of them. McDonald’s has included salads on the menu to meet the needs of healthy customers. This is the most advisable strategy to adapt, especially if you have a small restaurant.
Identify your potential customers, gather them into one or two segments, and direct your attention on them. For example, if you open your restaurant in a district where 20% of people are vegetarian and 10% are students, it may be more effective making only salads, pizza, and sandwiches, attracting the 30%, rather than the remaining 70%.
Unless you are a million-dollar, chain of restaurants, company, I recommend going for the third approach, Niche Marketing, to survive in the modern business environment. In simple terms, through this approach, you divide the whole market – people are likely to come to your restaurant – into different categories/segments. So, you will not look at your market as made up by only “Paul”, but by the “housewife Pamela”, the “Doctor George”, and the “entrepreneur Mark.”
Defining exactly to whom you should be marketing will make you lower the cost to reach your prospects and be more effective. Going for a mass marketing strategy may be risky and expensive.
How to identify your niche market
The niche marketing approach helps you to define your exact target restaurant customer. The three main steps of niche marketing are:
1. Market segmentation. It divides the market into different buyer groups that require distinct products. There are several ways to segment the market, and they are based on variables. The main variables through which to segment the customers are:
– Demographical (age, gender, occupation, household composition, etc.).
– Geographical (city, province, size of centre of residence).
– Psychographic (concerning lifestyles, regardless of demographical and geographical).
You have to start doing some research in the area of your business. Your city has likely published the population census online; look into it and find out the age, gender, income, profession, education, lifestyle, spending habits, etc. of people in your area.
2. Define the target market. Here, you evaluate the attractiveness of the segments and pick the one or more you intend to hit. Simplistically, the target market is the types of people, who are most likely to enjoy what you want to offer. Once you’ve determined the variables by which you identify the various customer segments, you have to evaluate the size and the importance of each one. Then, you should have at least two different types of potential guests, the “primary” and the “secondary.” For example, you can have the following situation:
Age: 28 – 35
Marital Status: Single
Age: 40 – 50
Marital Status: married
Children: 1 to 3 children
3. Product positioning. Here, you communicate the products’ attributes to the target market, based on their needs and the available communication channels. Make sure your marketing is communicated in a way that your target can understand and broadcast via a means that it uses.