Y2.U7.2Market Analysis

What• Are the basic types of research methods used to gather

information?

• Is market segmentation?

• Can an operation do to create a unique market identity?

• Are various ways to communicate a message to the market?

Market Research Methods- 4 basic Methods• Experimental Method• Try out a product for a limited time with a limited group

• Observational Method• Observing how customers react in a natural setting toward

a product

• Survey Method• Gathering information using questionnaires.

• Sampling Method• Testing a product with a small group of people, sometimes

called a focus group

Market SegmentationTarget Market: the people an operation intends to pursue as customers. Every operation needs to be customer driven.

Mass Marketing treats everyone in the market as having the same needs and wants. Wasteful and should be avoided.

Target Marketing

• Treats people as different from each other, trying to make a focused appeal to a distinct group

• Focuses resources toward the people who buy the products

Market Segmentation• Demographic Segmentation• Looks at individuals in a given location• Age, gender, ethnicity, marital status, income, size of

household, educational level- U.S. Census

• Geographic Segmentation• Where customers live, work and what kind of

transportation they use

• Product Usage Segmentation• Capitalizing on or reacting to brand affinity

Market Segmentation• Lifestyle Segmentation• Looks at the activities, hobbies, interests, hobbies of a given

target market

Segments are often used in conjunction with each other

Once a target market is established, need to work on a value proposition

-a statement of value customers will experience when they purchase the product or service. “Are the benefits worth the cost?”

Market SegmentationTarget Marketing Steps

• Identify groups you want to serve• Who are the customers you want to attract and why

• Identify groups you are actually serving• Survey

• Perform a situation assessment (Customer Profile)• Do your targets reflect reality?

• Continually work to refine message

Market IdentityPositioning

• 3 steps• Identify possible ways to differentiate the operation within

the market• Select the right mix of differentiating aspects• Communicate the chosen identity to a specific chosen

market

• All about standing out from the crowd• Offering a product no one else does, or in a way no one else

does

Market IdentityWays to Differentiate an Operation: Product, Physical appearance/aesthetics, Service, Location, Image

• Product• …the food is a time-tested way, but, given how difficult it is

to produce something so unique, so much better than the competition, more than just product is needed

• Physical Appearance/Aesthetics• The look: modern, cozy, formal

Market IdentityWays to Differentiate an Operation: Product, Physical appearance/aesthetics, Service, Location, Image

• Service• How will staff be dressed?, How will guests be greeted?

Delivery?, Take-out.

• Location• Geographic and other segment considerations

• Image• Image first, then make product and service decisions that work

toward achieving the image

Market IdentityWays to Differentiate an Operation: Product, Physical appearance/aesthetics, Service, Location, Image

Selecting the Right Mix

• One differentiation point? (maybe not enough), many differentiation points? (could dilute the message)

Communicating Chosen Identity

• Are customers getting the message?

Market CommunicationsThe process of communication is called the Promotional Mix

Advertising

• Paying to present or promote an operation’s product, services or identity (television, radio, newspaper, storefront, internet)

Sales Promotion

• Limited, short term incentives to entice customers to patronize an operation (2 for 1, Wednesday wing)

Market CommunicationsPersonal Selling

• Always key to an operation’s financial success, well-trained staff goes a long way to communicating an operation’s message

Public Relations (PR)

• Process by with an operation interacts with the community at large (sponsorship, charity event)

Direct Marketing

• Connect directly with a segment of the market (mailing, email, phone call, web site feedback, tableside feedback)

Sales PromotionsSpecial Pricing

• Limited time reduced prices

Frequent Shopper Program

• Benefit in exchange for continued patronage

Premiums

• Free or reduced price merchandise (pen, cup)

Special Event

• One time or periodic event

Sales PromotionsSamples

• Free small tastes of food items

Contests and sweepstakes

• Games/programs that involve customer and provide a prize

Promotional MaterialsSignage

• Menu boards, directional signs, other signs

Flyers

• Paper notices distributed in a specific location

Premiums

• Token gifts, giveaway items

Carry out and door hanger menus

• For use outside the restaurant

Promotional MaterialsApparel and Branded Merchandise

• T-shirts, etc.

Point of Purchase (POP) materials

• Menu boards, video, print pieces, other display items near the point of purchase

Merchandising materials

• Table tents

Direct mail, Email

Cooperative Sales promotions

Public RelationsTo engage the public, an operation should employ both Community Relations and Media Relations

Community Relations create a positive image, build credibility, build relationships, create a network, generate positive publicity, promote the operation

• Offer discounts for good grades (limited time)

• Donate a percentage of sales to a charity

• Offer discount for bringing in a donation

• Sponsorship

• Offer facility for fundraiser

Public RelationsMedia Relations include newspapers, magazines, television and radio

Press Release a brief presentation of promotional information written to sound like a news article

Press Kit (media kit) is a packet of information given to media representatives to answer questions they might have about a business or organization

Public RelationsPress Kit

• General information about the operation

• Menus

• Any recent articles or press releases

• Any recent awards

• Photos of the operation and its menu items

• Operation’s mission or goal statement

• Contact Information for spokesperson

• Other promotional materials

Public RelationsEvaluation of media types and vehicles

• Does it reach the target market or people who can influence market? How much of market?

• How likely is it there is interest in the story?