In the restaurant business, knowing your target customers is really important. This helps you make the right food and marketing choices.
In this article, we’ll discuss how to figure out your restaurant’s target market, exploring the key factors that can help you reach your target customers and pave the way for long-term success in the restaurant industry.
Whether you run a fancy restaurant or a cozy café, discovering and connecting with your ideal market segment can be the recipe for sustained growth and customer loyalty.
Before opening a restaurant, conducting a market analysis to write a restaurant business plan is important. This is when you define your restaurant concept and conduct your target market analysis.
It is important to ask yourself:
- Who is your target customer?
- What is their age?
- What are their eating habits?
- What are their preferences?
Creating a restaurant business plan needs to start with conducting a market analysis, a crucial first step when preparing to open a restaurant.
If you are already running a restaurant, but it’s not profitable, the reason might also be the lack of marketing efforts toward attracting your restaurant’s target audience that matches your restaurant’s concept.
Let’s take a closer look at this subject.
What is a restaurant’s target market
A restaurant target market is a specific group of people it aims to attract as its main customers. It includes the individuals most likely to dine at the restaurant regularly and enjoy its offerings.
This target market is identified based on various factors, such as
- demographics (age, gender, income, location),
- psychographics (lifestyle, preferences, values),
- behavior (eating habits, dining frequency).
Understanding and catering to the needs and preferences of this defined target market for restaurants is crucial for a restaurant’s business and marketing strategies.
Why a restaurant’s target market matters
Identifying your restaurants target market is crucial for several reasons, including the following
- Effective marketing: Knowing your target audience helps you create restaurant marketing strategies that work well for your restaurant business.
- Customized menus and services: Understanding what your target market likes allows you to create menus and services that match their specific preferences, making your repeat customers happier.
- Competitive advantage: Focusing on the right customers gives you an advantage over competitors because you’re appealing to the people most likely to choose your restaurant over direct and indirect competition.
- Customer dedication: When you consistently meet your target market’s needs, it’s easier to build a group of loyal customers who keep coming back.
- Business expansion: Successful targeting can lead to more customers and income, helping your restaurant grow and last in the long run. According to Toast’s recent survey, approximately 29% of restaurants they surveyed say they are very likely to pursue restaurant expansion by adding new locations in the next 12 months.
The insights you gather about your customers will significantly influence every aspect of your business, including menu development, pricing strategies, and promotional tactics.
For example, your menu’s pricing must align with your target audience’s financial means to build a solid customer base.
Another example refers to the restaurant location. If you have not picked a spot, selecting one near your target market is important. If you already have a location, people living or working nearby should naturally become part of your potential customers.
How to discover your restaurant’s target audience
You can either hire an external company or do it yourself to identify your ideal customers. If you plan to discover your specific target market independently, follow the steps described below.
Step 1. Examine your direct competitors
The first step is to check the competition. Take a piece of paper and make a list of your direct competitors. Remember that by direct competitors, you can understand the restaurants which
- Serve the same type of cuisine (for example, both restaurants serve sushi)
- Offer similar dining experiences (for example, both are fine dining restaurants)
- Offer meals at a similar price range
- Aim to attract the same customers (for example, both restaurants target families with children or healthy food enthusiasts)
- Are located nearby (for example, at the same street or neighborhood, or in the case offering food delivery, deliver food in the same delivery zones)
On the other hand, indirect competition means all restaurants located in the same area but offering different types of cuisine or types of service. For example, a pizzeria’s indirect competitor could be a sushi restaurant.
Indirect competitors can offer substitute products or experiences that fulfill similar needs or desires. For example, a bakery specializing in pastries and coffee might indirectly compete with a breakfast cafe, as both serve breakfast items.
While identifying your target audience, focus on your direct competitors and visit them personally. Just go there for dinner or breakfast and make your observations.
During your visit, pay attention to the following details
- Restaurant menu – is it short or long? Is it formal or informal? Are there any menu descriptions? What menu items are available? Is there information on allergens? What is the pricing of menu items?
- Location – where is the restaurant located? For example, it could be located in the city center, suburban areas, shopping centers, tourist areas, or the business district. Is there any foot traffic? Are there any other restaurants near the dining establishment you visit?
- Atmosphere – is there a lively atmosphere, or is it rather elegant or cozy? How do people feel in a restaurant? Is the customer experience good? Who visits the restaurant? (for example, families, friends, coworkers). Are there more men or women visiting a restaurant? How are they dressed? What age are they? What are they ordering mostly? What are their spending habits?
Don’t forget about analyzing your competitor’s online presence. Start with checking if they have their restaurant websites.
If yes, do they use an online ordering system to enable customers to order food directly from their websites?
Do they use food delivery apps? Do they sell on platforms like Doordash or Uber Eats?
While considering offering online ordering in your restaurant, look for an online ordering system that enables restaurant owners to define their delivery zones specifically.
In UpMenu, you can easily draw delivery zones and, for each one, set up the minimum order value.
You can enable and disable each delivery zone anytime you need. You can also set up different delivery hours for different delivery zones.
Step 2. Organize the notes you made on the customers
Having visited and analyzed at least your three direct competitors, note any recurring themes or commonalities in your observations.
- Have you noticed that in all the places you visited, a restaurant menu is informal with the funny names of the dishes?
- Do all restaurants offer an online ordering feature?
- Do you consistently find that the atmosphere leans towards an energetic vibe?
- Do men or women stand for most of the restaurant’s customers?
- Are diners frequently dressed in formal or rather casual clothes?
- Do diners frequently order a main dish and a dessert?
- Is the background music always classical?
- Does the restaurant offer happy hours, and do many customers visit the restaurant during this time?
You can then organize the notes in a way that helps to see the customer segments and the patterns you notice concerning this given customer type. Check our example below.
Let’s say you plan to open a fast food restaurant, and you visited three fast food establishments in the location where you plan to run your restaurant business.
Based on your observations, a customer profile could be the following:
Demographic information:
- Age range: People between 25 and 40 years old.
- Occupation: Office work, store employees, students, and some parents.
- Probable income: People in this group have varying incomes, but most earn an average amount.
Behavior:
- How often they visit: These customers come to the fast-food place quite often, maybe a few times every week.
- What they order: They usually get burgers, fries, and drinks together. Sometimes, they choose chicken sandwiches or salads for something healthier.
- When they come: On weekdays, they often come for lunch between 12:00 PM and 2:00 PM and dinner from 6:00 PM to 8:00 PM. Families from this group might visit on weekends for lunch or early dinner.
- What they wear: They might wear nicer clothes like slacks and a shirt on workdays. On weekends, they dress more casually with jeans and T-shirts.
- How much they spend: These customers watch their money and usually spend around $8 to $12 for their meals. They like food that’s both cheap and quick.
Organizing your notes in the customer profiles will give you valuable insights into the restaurant target audience segments.
Step 3. Check census data
Once you organize your notes and create your customer profiles, it’s essential to evaluate whether a sufficient number of potential customers reside in or around your location to sustain your restaurant.
For that purpose, you can check Census Data, where you will see the information on, among others,
- The population demographics:
- age distribution
- gender breakdown
- ethnicity and race
- citizenship status
- marital status.
- household composition (e.g., number of family members, non-relatives)
- The economic data:
- employment status
- occupation and industry of employment
- income levels and sources of income
Restaurant owners can also get information about the target market for a restaurant based on:
- Reports with consumer data provided by the National Restaurant Association
- Creating and conducting a customer survey to identify restaurant market segments
- Hosting a focus group to identify market segmentation for restaurants
Focus groups are small gatherings of selected participants who discuss a specific topic under the guidance of a moderator. These discussions generate qualitative data, offering insights into participants’ attitudes, beliefs, and experiences.
Focus groups are valuable for understanding diverse perspectives, gathering in-depth feedback, and informing research, business development, target markets, marketing tactics, and policy decisions.
Step 4. Determine your buyer personas
Once you gathered information on the competition and checked census data and other reports, it’s time to create buyer personas.
A buyer persona is like a made-up character representing the ideal customer.
This character is based on lots of research about real customers. It includes details like
- age,
- what they like,
- what they want,
- what their problems are
Businesses use buyer personas to understand their customers better. This helps them create better products, marketing, and customer service. It makes customers happier and helps businesses do better.
Meet John, a 28-year-old single male. He works full-time in a busy office and has a moderate income. He lives in an urban area and is always on the go, juggling work and social life. He values convenience and prefers quick and tasty meals that he can grab on his way home or during lunch breaks.
John frequently visits fast-food restaurants and orders combo meals with burgers, fries, and a soft drink. He tends to dine quickly or take his food to-go, appreciating the speedy service and low prices.
Meet Emily and James, a married couple in their mid-30s with two children. They are both professionals with a high household income and reside in an upscale suburban neighborhood.
Emily and James enjoy upscale dining experiences and value special occasions, quality service, and a sophisticated atmosphere. They often go out to eat when celebrating something special or having a romantic night out.
Emily and James visit fine dining restaurants infrequently but with high expectations. They tend to order several courses of delicious food and matching wines. Sometimes, they even make reservations because they want their dining experience to be extra special. They don’t mind spending more on a great meal and excellent service.
How to connect with your target customer
Restaurants target market is chosen, and you already know your target audience. Now it’s time to think about which marketing efforts will help in local marketing and attracting your right target market.
A successful restaurant uses a variety of marketing strategies to reach its target restaurant market segment. A target audience for restaurants could be attracted in many ways, including
Building your restaurant website
Create a restaurant website with an online ordering system to facilitate placing orders. For that purpose, you can use an intuitive restaurant website builder, choose one of the available restaurant website templates, add your menu, and enable online ordering.
Loyalty programs
A restaurant loyalty program is designed to reward repeat customers. These programs typically offer incentives such as discounts, free meals, or exclusive perks in exchange for customer loyalty.
When customers join a restaurant’s loyalty program, they can experience cost savings and exclusive benefits, fostering a lasting and meaningful connection with the restaurant.
Activities on Social Media Platforms
Creating social media accounts (e.g., Facebook, Instagram, TikTok for restaurants) and posting regularly is a great way to buzz about your restaurant and gather customer feedback.
You can inform customers about current promotions and special offers. What’s more, you can check which posts have the greatest interest of your customers.
To read more, check out our article on restaurant social media marketing.
Email campaigns
Restaurant email marketing is about sending promotional emails or newsletters to a list of subscribers, highlighting menu updates, special offers, or upcoming events.
A restaurant might send a monthly newsletter to its loyal customers, offering exclusive discounts and sharing news about upcoming themed nights.
SMS campaigns
Restaurant SMS marketing, often called text message marketing, is a strategy where restaurants send promotional messages, special offers, and updates to customers’ mobile phones through SMS (Short Message Service) or text messages.
A restaurant could send the following message to its customer base:
“Special Weekend Treat! Join us this Saturday for an Italian Feast at House of Pasta! Enjoy a complimentary dessert with every pasta order. Bring your friends and savor the flavors of Italy! See you from 5:00 PM to 9:00 PM. Reply ‘YES’ to confirm your reservation. Don’t miss out! “
Examples of Restaurant Target Markets
Below, we described three target market examples of a restaurant.
Downtown quick-service cafe
Your quick-service cafe caters primarily to busy office workers and professionals. It is located in the heart of a bustling metropolitan area and operates weekdays from 7:00 AM to 4:00 PM. It offers a range of breakfast and lunch options.
Customers typically favor takeout or delivery to their workplaces, with a few opting for a speedy dine-in experience. The lunchtime rush, from 11:30 AM to 1:30 PM, sees the highest restaurant foot traffic.
This establishment remains consistently busy throughout the year, thanks to its proximity to the downtown business district.
Family-friendly suburban restaurant
Your restaurant is in a suburban neighborhood, welcoming families with open arms. Open daily from 11:00 AM to 9:00 PM (with extended hours on weekends), it attracts local residents and diners from nearby areas.
Onsite dining is the preferred choice for most loyal customers, who appreciate the family-friendly atmosphere and a menu that caters to children. Evenings on weekdays and all day during weekends are the peak hours, making it a popular choice for family gatherings and casual dining.
Its customer base remains steady year-round, with slight variations during holidays and special occasions.
Beachfront seafood grill
Your seafood restaurant is right by the beach and has beautiful views. It’s open every day, and during the busy tourist season, it’s open for longer hours. People who love seafood, tourists, beach lovers, and locals come here to eat.
Most customers prefer dining onsite, enjoying fresh seafood and outdoor seating during good weather. It’s most crowded in the late afternoon and evening during the summer when many tourists are around.
In the off-season, it’s quieter, but regular customers keep returning. This restaurant’s success depends a lot on the time of year when more people visit the beach.
Key Takeaways
- Understanding your restaurant’s target market is the foundation of an effective marketing strategy. Identify market gaps to create tailored experiences.
- Restaurant market segments can vary widely. By segmenting your audience, you can focus on attracting the customers most likely to enjoy your offerings.
- Tailoring menus and services to match your target market’s preferences enhances customer satisfaction and loyalty.
- Targeting the right audience gives your restaurant a competitive advantage by concentrating on customers more likely to choose your establishment.
- Consistently meeting your target market’s expectations helps build a loyal customer base, fostering repeat business and positive word-of-mouth.
- Identifying and catering to your restaurant’s ideal market segment can drive increased revenue, contributing to long-term growth and sustainability.
Frequently Asked Questions (FAQ)
What is the target market for restaurants?
Restaurants choose their target customers based on factors like the type of restaurant, location, food, and overall style.
Restaurants typically consider the following factors when defining their target market:
- demographics (e.g., age, gender, income level)
- psychographics (e.g., lifestyles, interests of potential customers)
- the restaurant’s physical location
- behavioral characteristics of customers (e.g., frequency of restaurant visits, preferred dining occasions, spending habits)
- the type of cuisine offered
- the restaurant’s atmosphere, decor, and ambiance
- pricing
- local trends
- competition
- seasonality
Who is the target market for fast food restaurants?
Fast food restaurants attract a wide range of customers. Below you can find examples of fast food restaurants’ target audiences.
- Busy people: Those in a rush, like workers and parents with little time.
- Savers: People looking for affordable meals.
- Teens and young adults: Fast food chains appeal to teenagers and young adults due to their affordability and popularity.
- Drive-through customers: Fast food restaurants with drive-through facilities target customers who prefer ordering from their vehicles.
- Late-night eaters: Night shift workers and late-night snackers.
- Families with children: Fast food restaurants with play areas and kid-friendly menus target families with young children, offering a convenient dining option for parents.
- College students: Students near campuses seeking budget-friendly meals.
- Tech users: People who like ordering online or through apps.
Who is the target audience for fine dining restaurants?
The target audience for fine dining restaurants typically includes:
- Affluent diners: Fine dining establishments often cater to individuals with higher disposable incomes willing to spend more on a premium dining experience.
- Celebration and special occasion seekers: Fine dining restaurants are popular for celebrating milestones such as anniversaries, birthdays, weddings, and other significant events.
- Business professionals: Executives, entrepreneurs, and businesspeople often choose fine dining restaurants for business meetings, negotiations, and entertaining clients.
- Couples: Fine dining restaurants create a romantic ambiance, making them appealing to couples.
- Food enthusiasts
- Tourists and travelers: Upscale tourists seeking memorable dining experiences often gravitate toward fine dining restaurants, especially in tourist destinations.
- Wine and beverage aficionados: Fine dining restaurants with extensive wine lists and sommelier services attract wine enthusiasts.
What market are restaurants in?
Restaurants operate in the broader food service industry, which can be segmented into several specific markets or sectors. These markets include, among others:
- Casual dining
- Fine dining
- Fast food
- Fast casual
- Cafes
- Coffee shops
- Restaurants specializing in cuisine from specific regions or countries (e.g., Chinese restaurants, Italian trattorias, sushi bars)
- Food trucks
- Pizzerias
- Bakeries and pastry shops
