The Importance of a Target Market
What Is a Target Market?
Finding a sustainable market niche will determine whether your restaurant succeeds or fails. It's the only way you can compete against larger, more established brands. However, to find your market niche, you must first find your target market.
Defining who your target market is and how to reach them is key to the success of any business. The restaurant industry is no different. It's important to decide is who your target market is if you're going to be successful.
What's a target market? If you run a restaurant, your target market consists of the segment of the dining population you hope to attract. They're the people most likely to become a regular customer, recommend your restaurant to others, post positive online reviews, etc.
Knowing your target market is essential to marketing a business. You can focus your marketing strategies and provide valuable insights into almost every aspect of your business operations. Your target market can help you decide what dishes to serve, the portion sizes, etc.
Finding your restaurant's ideal target market is going to take some work. There are many factors to consider. Knowing who your target market is and what they want will enable you to succeed in today's competitive restaurant industry.
A Target Market Gives You Something to Aim For: Your target market consists of your potential customers
The customers most likely to visit your restaurant are your target market.
A target audience should be a part of any business plan.
Why It's Important to Know Your Target Market
You might be tempted to believe your restaurant doesn't require target markets - everyone is your customer. But think about it - everyone isn't going to be your customer. If you run a steakhouse, chances are you aren't going to see a lot of business from the vegan segment.
This everyone is my customer mass-market approach could be a mistake. Your steakhouse will expend as much effort trying to attract die-hard steak lovers as it does vegans and others. This group has little interest in what you have to offer.
Instead, focus your efforts on the segment of the restaurant-going population that's most likely to visit your restaurant. The people who enjoy a good steak dinner. These people are your target market.
Identifying this specific target market is important. It allows your business to direct its resources towards customers that provide the greatest potential for sales and sales growth. Your restaurant's marketing budget is probably limited, so you need to spend that money as wisely as possible.
Keep in mind, selecting a target audience doesn't mean you're excluding everyone else. Of course, every restaurant wants to have as many customers as possible. Your target market forms the foundation of your customer base.
Finding Your Restaurant's Target Market
Knowing your restaurant's target market is a good thing for business. But how do you identify them? How do you go about finding your ideal customer?
If you've been in the restaurant game for a while, you have a good idea of who your target customer is. If you're just starting out, you probably have a general idea of who your target market is. That's a good place to start, but you'll need to do some research to know exactly who your target market is.
Take a look at your local restaurant scene. What are the most popular restaurants and why are they popular? What types of restaurants are under-represented and why?
What do you know about the local population, the people who make up your potential customer base? Are they old or young, high income or low income, college-educated, etc? The more you know about the demographics of your customer base, the more informed your decisions will be.
To determine what your customer base is looking for in a restaurant, you can analyze your customer base psychographic information. This includes information about their values, beliefs, attitudes, etc. This information will help you determine what your target market is looking for in a restaurant.
That's just the beginning. Google, Facebook, and others provide free market analysis to help businesses research their local potential customer base. The more you know about your customer base, the better you'll be able to find your perfect target market.
What are the Different Segments of Your Target Market?
Target marketing divides a market into segments to find who is most likely to want what you have to offer. Target marketing is essential to attracting new customers, increasing sales, and staying competitive. Having a well-defined target market allows you to concentrate your marketing efforts where they will be most effective.
To find your target market, you first have to break your market down into four segments. These segments include-
- Demographic segmentation,
- Psychographic segmentation,
- Geographic segmentation, and
- Behavioral segmentation.
Demographic segmentation uses statistics about a population's age, gender, income, and other basic information. Demographic segmentation tells you who your potential target market is.
Psychographic segmentation is another topic we've talked about. This segments a population according to socioeconomic class and lifestyle preferences. Psychographic segmentation helps you understand why a customer is looking for a particular restaurant.
Geographic segmentation is about segmenting a population based on its location. Geographic segmentation tells you where your customers are most likely to be, based on the metro area, city, etc. Where your restaurant is located will have a lot to do with its success.
According to CNBC, 60% of restaurants fail during the first year. The number one reason? Location.
Behavioral market segmentation provides insights into how a customer decides what restaurant they want to eat at. This can include their spending and purchasing habits. Knowing your target's behavioral habits allows you to more effectively convey your message.
The Different Kinds of Target Marketing Strategies
There are different marketing strategies to reach different segments of a customer base. Which one works best depends on several factors. You don't want a marketing strategy that goes after too broad an audience or one that's too narrow.
Mass marketing is a one-size-fits-all approach. For a restaurant, mass marketing can be inefficient. A more targeted approach usually produces better results for restaurants.
Segment marketing is marketing that focuses on that segment of the population that consists of your target market. It's very effective for attracting new customers and building sales. Breaking a market down into segments allows you to tailor your message to fit a specific audience.
Niche marketing is another marketing strategy. Niche marketing targets a very small segment of the market. Be careful not to create a niche so specialized that it hampers your ability to grow sales.
Micromarketing goes after an even smaller segment of the population than nice marketing. This marketing strategy caters to the whims, tastes, and wishes of a select few customers. Micromarketing is most effective when targeting individuals rather than groups.
Local marketing is an effective strategy for a restaurant to use to reach its target market. Like its name, local marketing is about marketing to customers who live or work near a business. For a small neighborhood restaurant, local marketing may be enough.
Examples of Successful Target Marketing
We've discussed how to find a target market and marketing strategies that can be used to reach this target market. But how does it work in the real world? Here are some examples of successful target marketing-
Big Ben's Burgers is a successful burger restaurant located near a large university. Their target market is local college students. There are three older, more established burger restaurants nearby, but Big Ben's is the most successful.
The owners took the time to really study their target customers and tailored their business to their needs. Since college students are usually strapped for cash, so Big Ben's menu includes several low-cost menu items. Students also keep later hours than other groups, so Big Ben's stays open later than the competition.
Big Ben's marketing strategy is mixes local and niche marketing. They've had a lot of success working with student organizations co-sponsoring special events and promotions aimed at college students. This has created a lot of positive buzz on local social media, attracting more customers to the restaurant.
Cindy's Subs is a sandwich shop located off a highway. Their target market consists of adults with low to moderate incomes who want a fast food meal that's filling. This includes a lot of the motorists who pass by the shop.
To reach their target audience, Cindy's relies on a highway billboard sign. It emphasizes Cindy's low prices and meal deals as well as providing directions. The billboard also features race cars and other visual images to convey Cindy's speedy service.
The Impact of Digital Technology on Restaurant Target Marketing
Every restaurant owner wants their customers to enjoy a pleasant dining experience. It's what keeps people coming back. Digital technology provides restaurants with the tools to ensure their guests have the best dining experience possible.
Digital marketing technology has revolutionized the way the dining industry does business. Digital technologies allow restaurants to engage with their target market on a whole new level. And it's just not advertising and marketing - technology is changing every aspect of the restaurant industry.
Digital technology is a great investment for a restaurant since it allows you to do more at less cost. Digital marketing tools can provide you with the data and analysis to know how to best reach your target audience. It also provides new and innovative ways to engage with your target market.
A good example of this is the booming online food ordering and delivery services being offered by many restaurants. Online delivery reduces errors due to miscommunication and provides them with a forum to upsell to the customer. The introduction of mobile apps has made the online order process easier for both restaurants and customers.
The restaurant industry is built on traditions. Traditional is great for menu items, but not for promoting and marketing your restaurant. Today's most successful restaurants are the ones embracing the advantages offered by digital technology.
The Importance of Target Marketing- Conclusions
Finding and reaching your target market is one of the biggest challenges restaurant management face. It may take a little work, but the rewards make it worth the effort. The following are are some key takeaways to remember about target marketing.
- Your target market is the segment of the population most likely to be your restaurant's customers.
- Finding your target market is important because it allows you to more effectively utilize your marketing resources.
- There are many factors to consider as you set out to find your target market.
- Market segmentation helps you find out the who, why, where, and how of your target market.
- Target marketing has helped many restaurants succeed.
- Digital technology is changing every aspect of the restaurant industry, including marketing.