Market Considerations and Target Market

When you decide to open a restaurant, it will be a considerable financial obligation. It is imperative to do your research in advance to help ensure a profitable and successful business venture. You will need to identify your target market  and do research to make sure there is enough business to make your concept successful. You will need to be able to define your customer; who they are, what they are looking for and where they are. You can’t be all things to all people. Different people are looking for different things when they are dining out. For example if a couple is out to celebrate an anniversary with a high end meal, they likely do not want a family with young children next to them. These two groups are looking for different things with pricing, menu choices and atmosphere. You must come up with a plan to serve those you are trying to reach. The menu must cater to the group(s) you are trying to reach.

• Identifying your target market starts with looking at:
• Who will be your main customers?
• What are they looking for?
• Where is the best place to start your business?
• When should you open, and what should your hours be to meet his need?
• What should your price points should be?
• What are the interests and dining habits of people in that area?
• What type of atmosphere are your trying to convey?

Demographics

Demographics is the study of location and the potential customer. If you look up demographics in a dictionary you will see it is “the statistical data of a population, especially those showing average age, income, education, etc.” We are trying to see who the existing customers are in our market. You can create a concept in the location of your customers, or you can build a restaurant concept for the existing customers.

Demographic Surveys:  Listing of the general population for an area by:

• Age group
• Ethnic origins
• Religion
• Household types
• Marital status
• Occupation
• Education
• Housing
• Income
• Number of vehicles
• other related data

Demographic Trends:  What are some of the Likes and Dislikes of the following groups?

These lists are always changing but contain many pertinent characteristics. Understanding and adapting to these items will help compete in a flooded market.

Children Trends

• Often help choose destination
• Special menus that are colorful and contain pictures and games
• Prizes or toys
• Bite size foods
• Dipping sauces
• Small portions of adult meals
• Healthy options

Teens

• Beginning to mature
• Market of their own
• Burgers, appetizers, french fries
• Not always interested in unique foods
• Convenience or quick service
• Sustainability

Young Adults/Singles, Couples

• Unique sandwiches
• Strongly defined flavors
• Food delivery options and food apps
• Instagram-worthy food
• High quality but affordable options

Middle Aged Adults

• Traditional Items
• Value, quality and uniqueness
• Customizable selections
• Larger portions
• Healthful “options”

Older Adults

• Balanced meals
• Senior portions
• Comfort foods
• Quieter dining rooms with sufficient lighting
• Homemade foods
• Low prices or discounts; value conscious in many cases
• Easy-to-read menu
• Service
• Hot serving temperatures
• Doggie Bags

Personal Knowledge

A person’s knowledge of an area can be a starting point for looking at where to put your business and who it should serve. Even though it is unscientific, in can be valid and valuable information to add to your business plan.

A Market Survey is a detailed study of the people, the community, and the exact location of a food service establishment.

It looks at:

• Does the community possesses enough positive factors to support the establishment?
• Who is the target market?
• What are the community’s needs?

Where to get Information for a Market Survey or a Feasibility Study?

• NRA
• WRA
• Chamber of Commerce
• Economic Development
• US Census www.census.gov
• Hire someone to do a market survey for you.
• Do a survey yourself

Survey for……

• Number of operations in area
• Categories/types in area
• Pricing structure of each
• Don’t necessarily copy what others are doing, but use the information for a base
• Three Areas of Analysis
• The Customer
• The Community
• The Competition
• The Customer
• The type of customer desired
• Age Group
• Amount of disposable income
• Food preferences
• Social habits
• Religious/Ethnic Orientation
• Education Level
• The Community
• Growth Rate
• Availability of liquor licenses
• Existence of competition
• Public services provided
• Requirements of Health Dept.
• Number of families
• Advertising possibilities

The Competition

• Direct Competition
• Similar cuisine
• same type of décor
• check averages
• capacity
• theme

Indirect competition and Broad Competition

What other businesses are competing for the same customer? This includes any business that sells food.(Grocery stores, corporate foodservice, meal kits, convenience centers, festivals with food, etc.)

Direct or Strict Competition

Any food service that sells a similar product at a similar place to a similar market segment. You need to serve the customers better than your competition to retain their loyalty. Healthy Competition is positive because it promotes value and forces restaurants to excel to succeed.

Know Your Competition; Think about doing a survey in the area where you intend to operate. Doing a market survey is imperative to predicting success of your restaurant.

Example:  A Northwoods Market Survey…..

• What groups of people are represented in the Northwoods?
• What are the food interests of these people?
• What groups are not having their needs met in the Northwoods?
• Can we KNOW without doing research?