Introduction
XYZ restaurant is a new restaurant that offers a fusion of Asian cuisines. The restaurant atmosphere and ambiance is stylish and modern; chic, simple but never boring. The food is authentic Asian foods with a touch of creativity. XYZ is more than a place to dine or eat. It offers a brief reprieve in a hectic day; a chance to relax and unwind. Among the establishment’s top priority is delivering consistently good experience through sumptuous meals and warm and friendly service. Currently the restaurant is strategically located inside a shopping mall in the business center of the city. The location is also accessible to young married couples who live nearby.
Market Segmentation
According to (2000), segmentation is a market technique which can help firms find ways of establishing a competitive advantage. A market segment is a section of a market which possesses one or more unique features that both give it an identity and set it apart from other segments. Market segmentation amounts to partitioning a market into a number of distinct sections, using criteria which reflect different and distinctive purchasing motives and behaviour of customers. Segmentation makes it easier for firms to produce goods or services that fit closely with what people want ().
Segmentation Variables
More than one variable can be used when segmenting markets, and indeed, the more variables the better since it helps to focus on a tighter target market. Tighter targeting means less waste, more relevant offers to appropriate customers and higher customer satisfaction ( 2000).
In order to segment a market, characteristics have to be identified which distinguish among customers according to their buying preferences. Profiles of market segments reflect different combinations of these characteristics then have to be constructed.
To target the users, the financial appeal of all segments should be assed and segments that have the greatest appeal should be selected for targeting.
Age
A consumer’s age is often a strong determinant of their product choices and consumption practices. Age has an impact on purchasing decisions.
Life cycle Stages
Age and life cycle stages are often combined in order to study markets. Life cycle position is an important determination of buying behaviour.
Marital Status
Specific marital status groupings such as singles, single parents and dual-income married couples should be taken to consideration.
Income, education and occupation
Income has long been an important variable for distinguishing market segments. Income is often considered to identify the capacity of the market segments to purchase a product or service. Occupation and economic circumstances influence consumption patterns. Educational achievement is another variable that explains purchasing decisions and is closely associated with occupation and income.
Lifestyle
Lifestyle is an important psychographic variable composed of a combination of factors such as activities and opinions. Lifestyle patterns are changing.
Description of the Target Market
The target markets of the restaurant are extensive in terms of age. The restaurant caters to all age groups. However, the focus of this report will be on young professionals, and young families. These market segments live a modern lifestyle and love to experiment with new taste of food. They love to munch and chat and relax in good atmosphere. They are willing to pay extra for fine food and service. Young professionals are well-educated college graduates interested in their personal fulfillment. They participate more in physical fitness activities, utilize convenience products and services, are interested in satisfying their personal needs regardless of price, and are emotionally secure relying on themselves. They tend to be materialistic and desire the best of everything. At the same time, they value home and family and have a strong concern for work and career.
Consumer Needs and Motivation
Maslow suggested that human needs are ordered in a hierarchy of importance. The most important needs are those to do with physiological needs, whereas the least important ones are to do with self actualization. Maslow contended that people would not seek to satisfy the less important needs until the more important ones were satisfied (2000).
Maslow’s Hierarchy of Needs
Abraham Maslow suggested that human needs can be divided into five basic categories:
- Physiological – include hunger, thirst and sex
- Safety – range from security and protection
- Social Esteem – cover affection and a sense of belonging; include recognition, status, and self esteem
- Self Actualization – range from self development to self accomplishment
According to Maslow’s hierarchy of needs, after physiological and safety needs have been realized, social needs, esteem needs, and finally self-actualization needs take priority. Self-actualization is our highest need. There is overlap between each level since no need is ever completely satisfied. For this reason, the lowest needs remain as prime motivators that influence consumer behavior (2003).
The focus of the marketing efforts for the XYZ Restaurant is the consumers’ physiological needs (hunger). The restaurant is accessible to its targets markets who have busy and dynamic lifestyles. Another focus is the self-esteem needs of the consumers. The restaurant is not just a place to dine but also a place to relax and chat with friends and loved ones. The relaxing ambiance and friendly service make the dining experience at XYZ Restaurant enjoyable.
- Product/ Service – quality products and service that satisfies the consumers physiological and self esteem needs; positioning on benefits that create attractiveness and preferences
- Price – enhance intention to purchase by creating attractive value for customers
- Distribution/ Place – the location of the restaurant is easily accessible to the target markets, secondary markets and potential markets; adequate availability and service to facilitate purchase
- Promotion – the focus is on the benefits that the consumer will receive (e.g. sumptuous meals, quality service, chic and modern ambiance, relaxing and enjoyable experience; create awareness pf product and its benefits
The motive that will be on focus is physical survival. The food will be given emphasis in the marketing campaign of the XYZ Restaurant. According to (1996), food is one of the primary elements of the Physical Survival Motive. Along with the physical survival motive is the family values and spiritual motives. Experience is considered as a motivational factor for consumers to patronize XYZ Restaurant. Therefore, the consumer experience must be special, unique and different. Each consumer must be treated uniquely.
Another motive that will be included in the marketing strategy of XYZ Restaurant is spiritual survival. Spiritual survival is a strong motive that carries consumer influence. When a dining experience is positioned at the spiritual level, it is postured as a romantic, ardent, loving, passionate, and amorous experience. The XYZ Restaurant offers a place for everyone to be with his or her family, friends and loved one.
Consumer Personality
Consumer innovativeness – how receptive consumers are to new products, new services or new practices is quite important to both consumers and marketers for both can benefit from the right innovation.
Consumer dogmatism – a personality trait that measure the degree of rigidity consumers display towards the unfamiliar or towards information that is contrary to their established beliefs.
Consumer Social Character – inner-divested consumers tend to rely on their inner values or standards in evaluating new products and are likely consumer innovators. Other-directed consumers tend to look to others for direction on what is right or wrong, thus they are less likely to be consumer innovators.
Need for uniqueness – people who seek to be unique avoid conformity to others’ expectations or standards, either in appearance or to their possessions.
Consumer personality influences consumption behaviour.
Application of consumer personality concepts in the marketing mix will result to a more effective market segmentation and product or service communication. Consumer Personality can be applied in the product positioning, which is accomplished with the marketing mix variables. Product and service design and marketing communications is important. The whole of the marketing mix is important in developing effective positioning, as attributes of the offering must be closely in line with the targeted customers’ expectations and needs, as must be associated price points and channels of distribution.
- Product/ Service – the XYZ restaurant offers innovative products and dining experience. The restaurant is also a place for variety seeking consumers because of the wide product selection. The target markets of XYZ Restaurant are mostly inner-directed individuals and consumer innovators.
- Promotion – the personality of the consumers is important in formulating advertisement and promotion strategies. The target markets of XYZ Restaurant are Inner-directed individuals who tend to rely on their own inner values or standards in evaluating products. The promotional advertisements of XYZ Restaurant will stress the features of the products and the benefits since these type of consumers respond to these ads.
Studying the consumer personality is important in formulating a marketing mix for a product/ service. XYZ Restaurant is a new restaurant with quite an innovative concept and products. In order to achieve consumer acceptance it is important to understand the possible responses of consumers to XYZ Restaurant’s innovative product (food, service, ambiance, experience).
Consumer Perception
Consumer perception is an important factor in positioning the product in the consumers’ minds. One of the goals of the marketing mix is to use the consumers’ perception to make a product and service attractive. The aim is to portray an image for the product or service that will match with how one wants the product to be visualized in people’s minds. Image is not only reflected in the promotional messages which are directed towards the market target but also in the pricing strategy, the mode of distribution and, the appearance of the product or service itself.
Consumer Perception and Product Positioning
The position of a product in the market reflects the way consumers perceive it in relation to its competitors. The particular attributes of the product, and the way it is promoted, form the ingredients of the strategy a marketer will use in positioning it for its target segment of the market (2004).
- Product/Service – Perception is important in the marketing mix of XYZ Restaurant’ marketing mix. In terms of Product, the “perceived quality” of the product/service affects consumer behaviour. Quality according to Proctor (2000), reflects differences among products or differences among services. Product differences are an important factor in marketing. Perceived quality differences affects how the consumers view a product or a service. Quality is a relative value that people attribute to things. It reflects people’s perceptions concerning a product or service and how well it will provide the various benefits they require from using it.
- Price – anything that can impact the perception of the product or service features can impact the price that potential consumers will be willing to pay. If the consumer perceives more than justifies the price, he will not purchase (2001). The perceived value of the product or service affects the price.
- Promotion – Insight about consumer perception is an important basis for developing effective promotional campaigns for XYZ Restaurant. The promotion of the products should focus on the perceived benefits that the consumers are expecting to get from the products.
Conclusion
Understanding consumer behavior and other issues such as consumer needs and motivation, consumer personality and perception is important in making an effective marketing strategy. Market segmentation requires a careful analysis of the market. Markets are segmented into a number of distinct sections, using different variables which reflect different and distinctive consumer motives and behaviors. In formulating a marketing strategy the consumer needs and motives must be thoroughly studied. Motivation, personality and perception affect consumer behaviour. The product’s marketing mix must be able to address these issues in order to make a favorable product position.
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