It worked for them, but not me. identifying your market
You just read an article about an amazing idea that a competitor of yours is doing and you say to yourself, we should do the same. Months go by and you notice that very little to no leads have been generated form this awesome idea that you discovered, but why?
This is a common issue shared amongst small and medium sized businesses. The missing piece is the extensive market research.
Let’s meet Chef Johnson, the owner of a high-end local Italian restaurant. He has worked in some of the finest restaurants across the United States including Miami, New York, and Las Vegas and has decided to leave the major cities and raise his family in Richmond, VA, his hometown.
Chef Johnson is by no means a master marketer but has learned a few tricks from the marketing departments at the restaurants where he previously worked. He has also researched other articles on Google for how to market a restaurant. The chef decides to implement some of those tactics to open his restaurant.
After 3 months of opening, the chef is barely able to pay the bills and is wondering why he is failing. Let’s analyze his situation a little more.
The three cities he previously worked in, Miami, New York, and Las Vegas either have residents with higher income than most of the country or attract tourists and business travelers that are willing to pay top dollar for a meal.
According to Census.gov, the median household income is approximately $15,000 less than the national average. Richmond is also not a top travel destination. Chef Johnson’s biggest mistake is opening a high-end restaurant in a low-income area.
As a business owner, you must study your ideal target market to be successful. The first thing you must do is know your demographics. Demographics include age, gender, income level, and buying behavior. Chef Johnson would have been more successful opening a high quality but lower priced Italian restaurant because of the income level and buying behavior of his market.
The next thing to determine is location. Location influences the type of business that will be successful in that area. Chef Johnson’s reputation and skills allowed him to cook in some of the best restaurants across the US, but those locations attracted the customers he needed. Location spans beyond just the city you operate in but also the type of environment as well. Do you think the chef would be more successful in a rural part of town, or with a location closer to downtown? Downtown is right.
The next step in the process is evaluating your competition. We suggest picking 3 close competitors. These should be businesses that are almost identical to yours. Chef Johnson should choose 3 other high-end Italian restaurants to compare his business to. If there are none, he must choose other high-end restaurants to evaluate. It is important to choose businesses that compare closely to yours to see how they perform in that market and where you can beat them.
When marketing to your customers, determine which avenues and messaging works best. Chef Johnson should research the channels his customers research restaurants. If he has an older demographic, he may want to use avenues like Facebook instead of Tik Tok to reach those potential customers.
Local market research is extremely important to predict your potential success, but you also should have knowledge about what your industry is doing. Hypothetically, if restaurants are beginning to shift to cash only, the chef must determine if he will follow the trend.
Lastly, focus on your service. Product and profit margins get company only but so far, your service should be what sets you apart. Listen to your market and your customers and adjust accordingly.
If you are having trouble knowing where to begin to research, contact us. We specialize in conducting extensive research to know exactly how we should attack certain markets.