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Marketing research makes for smart business

April 15, 2012
By ANITA HANABURGH , For The Leader Herald

One of the important elements in the success of a restaurant has to do with how well the restaurant markets their product. Before a business can sell its product, they must make sure they have the right product.

Some restaurants go crazy with promotions and advertising, but neglect to thoroughly research the need for the product they are selling and they could be selling the wrong thing. If you don't know about it, it doesn't work.

Marketing's first job should be to design and decide upon a product that will meet the demands of the customer. In other words, find a product that is wanted or needed by a good size group of customers.

In food service, the "product" is many things. Obviously, it is the food. It is also the style or speed of service; it's the dcor, the table setting, the location, the theme, the packaging, prestige etc. At the chain "Macaroni Grill'' the product includes the Tuscan hot bread, the noisy atmosphere, the homemade pasta, the paper tablecloth to write on and the open bottle of wine.

So how does a restaurant decide what food or style will be successful? It does this by conducting research. Marketing research is frequently neglected by anxious restaurant buyers. Too often, restaurants are started because the owner makes a great chili when chili might not be what the customers are seeking. Unfortunately, many existing restaurants reopen with the same food or style that has already failed. New owners think they can do better.

Marketing research makes so much sense. You wouldn't buy shoes before you knew what size would fit. Research determines what food gap, if any, is needed to be filled. For example, a diner serving a hearty breakfast would be successful next to a factory where the shift changed at 7 a.m. There is probably no need for an ice cream stand next to a ski resort.

Not only does marketing research create and develop the food-service operations primary product the food, it also sets the prices that will turn a profit and will sell.

To do this, research must identify local opportunities.

The people: Who will be eating at this restaurant? How old are they? What are their interests, food habits, religions, occupations, nationalities, sex, and marital status? A family restaurant will not succeed in a city neighborhood of single young professionals.

The place: What is the weather, geography population, traffic, income?

The competition: What is already there? What is not? Marketing research should identify all the competition, other restaurants as well grandma's Sunday meal or school football games on Friday night.

Large chains hire a company to compile the statistics of a particular region. Information will be gathered as detailed as to the best side of the road to put the restaurants. The first KFC failed when a highway access road cut off entry to the restaurant. Research could have avoided this.

Can a restaurant owner do his or her own research? It is possible. It is proven that the stronger research conducted before opening a business, the more successful the business. Research is also recommended for existing restaurants.

This demographic information can be found at county or city offices. Planning offices tell where the community is going. Tax rolls tell about the age and stage of residents. The library has census reports and other local information. Real estate businesses are great sources for information on community size, growth or new businesses. The department of transportation can give information on traffic patterns or numbers of cars traveling different roads. An office of economic development can help get much community information.

Many restaurants use surveys to get needed information. Surveys attached to menus or the bill can help. Phone surveys are good and personal surveys work best. I had my students take a survey of what was needed in the college cafeteria. The result helped eliminate unwanted products and many great ideas were added. Recording business activities, customer comments and complaints add to one's knowledge of the customer.

Market research also will identify limitations:

Economic conditions: One can't sell if there if no money to buy. What can this community afford or what are people willing to pay.

Geographic size: How large is the population in the area? How far will people travel? One can't increase its sales if the number of residents is limited. "Build it and they will come" will not work if there aren't enough people to come!

Public Environment: What are the zone regulations and tax environment?

To stay alive, a restaurant must solidify its relationship with its clientele. The more it knows about that clientele the stronger the relationship and the more loyal the customer.

Don't miss: The Celebrity Chef Dinner on Monday is at the Holiday Inn of Johnstown. This most successful event in Fulton County will be celebrating its 20th year with the attendance of 15-plus area restaurants. Come and taste the best dishes of the best chefs and support scholarships for local students; you won't be disappointed. For reservations, call Debora Kolsrud at 848-3552 or email me.




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