Market Segmentation in the Restaurant Industry

Marketing segmentation is a big part of the marketing strategies of firms in the restaurant industry.  For the most part, the restaurant market is segmented based on the speed of service and the amount of service offered to the customer.  The four major market segments in the restaurant industry include full service, quick service, eating and drinking place, and retail host.

The full service segment is made up of restaurants that fully prepare the meals and serve the customers.  Restaurants typically feature menu options based off a certain cuisine type.  Customers of full service restaurants typically are not in a rush and they are expecting a more high quality experience, which results in a higher price for their product. An example of a full service restaurant is any sit-down restaurant, such as the chains owned by Darden Restaurants.  According to Chron.com, who quoted the National Restaurant Association as saying, “This restaurant industry segment experienced the largest drop in sales volume following the economic decline in 2008.” (Akers)

The quick service segment is made up of restaurants that offer buffets or take-out service.  Most restaurants prepare the meal immediately after the order is placed, and the food is often prepared in front of the customer.  Customers tend to have customization options when it comes to the preparation of their meal.  Quick service restaurants still tend to focus on one type of food, similar to full service restaurants. Quick service restaurants can be relatively inexpensive, and some examples include Subway and Chipotle.

The eating and drinking place segment includes caterers and stand vendors.  Food served by these companies is typically consumed right then and there.  From Chron.com: “For example, a catering company may prepare and serve a meal for a company’s sales convention at a hotel. Unlike a full service restaurant, the convention’s attendees may partially serve themselves and select food from a buffet-like assortment. Refreshment vendors may sell food at entertainment venues that patrons consume immediately.” (Akers)

The retail host segment is made up of franchises located within gas stations or grocery stores.  An example is a McDonald’s located within a Walmart.  According to Chron.com, who quoted the National Restaurant Association as saying, “In 2010, the retail host segment experienced some of the restaurant industry’s solid growth.” (Akers)

 

Akers, H. (n.d.). Major Segments of the Restaurant Industry. Retrieved from http://smallbusiness.chron.com/major-segments-restaurant-industry-25986.html

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One thought on “Market Segmentation in the Restaurant Industry

  1. Andrew, you bring up good examples of market segmentation. Since there are so many different ways to segment the market, there are also many ways in which restaurants can differentiate themselves from one another and offer different ambiances. In this sense, it it difficult to compare restaurants like a small local fine dining restaurant and a multinational fast food restaurant. Even though these restaurants are so different in the eyes of the consumer, its interesting how alike these restaurants are when it comes to looking at financial statements or how the business is run.

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