Segmentation for a Multiunit Restaurant Operation: Taking Location into Account When Advertising


As new restaurants enter the market and franchise operations continue to expand, restaurant owners and managers recognize that customers can vary greatly from one geographic market to another. Market segmentation is necessary to distinguish not only between regional locations but also between specific locations within local markets. This study examines the differences among restaurant customers dining at a downtown location compared to those dining at a similar restaurant in a suburb of the same city. Differences were found in patrons' average age, discretionary in come, reasons for dining out, loyalty, advertising-vehicle effectiveness, and the relative importance of restaurants' desirable attributes as defined by customers. Downtown diners tended to be younger with lower average annual incomes than suburban diners, but often used employers' money to purchase meals. Downtown diners desire good-quality food delivered in a convenient, timely fashion, while those in the suburbs want good service and value. Suburban diners tend to be more loyal over time and, more so than downtown patrons, are likely to take advantage of advertising vehicles that offer discounts and specials.


Business and Information Technology

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Article - Journal

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Publication Date

01 Jan 1997