Your Restaurant Location and Demographic Evaluation (Part Two)
In part one of this post we discussed how to define your market and gather data to help evaluate your restaurant’s potential. This part of the article will identify the exact data to collect and the evaluations you need to make before opening a restaurant or to re-vitalize a marketing plan in an existing restaurant.
To facilitate and simplify the data collection process, we use a Checklist that should be printed and kept in front of you while reading this post.
After defining your market, you will need specific customer information like average age, income and family structure. Location data like traffic patterns, counts and foot traffic will ensure decisions about sufficient potential customers. Competitive information will help identify your strengths and weaknesses to capitalize on marketing tools you choose to use.
Each part of the Demographic Evaluation Checklist has each key data elements listed. The sections should be filled out as follows:
- Defined Market Data – each fact you obtain as shown on the checklist allows you to compare your concept to the people who live and work within your defined market. This data is used to evaluate your concept and menu for their relativity to your target customers. Some factors may not apply and can be ignored.
- Competition – ignoring competition is a terrible mistake and may limit your potential to grow and penetrate your target market. Putting an Italian restaurant in the middle of four or five other successful similar concepts will lead to further dilution and segmentation due to customer loyalties, convenience factors and customers’ varying tastes. Data collected should be collected on all restaurants operating in your meal period(s). To further refine the data, you should complete the data collection for each competitor in your price range with a similar concept. This will require one or more visits to each competitive restaurant and an open minded evaluation.
- Your Location Comparative Evaluation – this review requires your subjective, but honest, comparison from the data previous collected. The final product will help you determine what to highlight and down-play in communicating your message to potential guests. The checklist may point out factors in your operation that may need improvement or correction.
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Comparative Strength Scale – estimating your strengths in given parts of your concept points out the weaknesses that should be improved as compared to your competition. In marketing plans underscore your competitive advantages with downplaying your weaknesses. Keep the key reasons for choosing a restaurant that guests use as your priority. These reasons in the order of importance according to most restaurant customer surveys include:
- Food Quality
- Service
- Convenience
- Price/Value Ratio
- Atmosphere/Facility
Chain restaurants spend a considerable amount of time, effort and money to produce very sophisticated reports on all of the factors contained in this article. Their success rate for survival is only slightly better than the independent restaurateur. However, total reliance on factual based decisions without the underlying subjective thoughts cause them to make bad location and market decisions. You can avoid their mistakes by using your common sense approach to the data you collect.
Opening a restaurant is a risk. Perhaps the greatest risk of any type of business. Correcting the placement of your concept may be financially difficult or impossible to do. Make the right moves based on the facts and common sense. Placing a fresh seafood restaurant in the middle of an open desert would defy any sense of reality. On the other end of the scale, if you were the only restaurant within a half mile radius of Times Square, I will personally guarantee your success. Somewhere in between is the answer to your potential!
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