Market Environment: Market Analysis Of A Restaurant Business

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Market analysis of a restaurant business Analyzing the market environment of a particular business is a vital part of forming and running a business. This paper identifies various market dynamics that affect the business both internally and externally. It will also assist in making more informed operating and investment decisions (Glynn, Mark, Arch, 68)

Market environment analysis The market environment analysis is an essential framework in understanding external local, national and international forces that affect your business (Hutt, Michael, Speh, 105). These factors are normally beyond your control, but you can modify your marketing strategies to benefit from the opportunities they present

The target market can be subdivided into distinct homogeneous groups of consumers (Kotler, Philip, Keller, 17), an entity can segment market on the following bases; demographic, geographic, psychographic and behavioral segment.

Demographic variables The market is divided on the basis of several variables such as sex, occupation, age, marital status, social status, education, family size etc. These variables highly influence customers buying behavior and moreover these elements can be measured quantitatively. For example the restaurant can target individuals who are not married and with low income, this is dependent on the rate of services offered. Therefore, considering demographic factors while designing marketing plan is crucial.

Geographic variables In geographical segmentation the market is divided into distinct units like regions, population density, location size and climate conditions. This segmentation is based on the notion that individuals living in urban and rural areas have different needs hence different buying habits. For example the restaurant meals in rural and urban areas are different. Therefore, marketer should design products and services keeping in mind the different preferences for each

Psychographic variables include interests, opinions, self-image, values and attitudes. Consumer buying behavior is greatly influenced by personality and lifestyle. The lifestyle defines the way a person lives and do expenditures.

Behavioral variables Here, the segmentation is done on the basis of the consumer’s knowledge about the product and his attitude towards the usage of the brand. Behavioral variables include benefits, occasions, user status, loyalty status, usage rate, buyer readiness stage and the attitude. Consumers can be categorized as those who purchase the product occasionally, those who purchase products because of the benefits derived, ex-users, potential users, and first time users. Moreover, the market can be segmented on the ground of the usage rate of the customers such as light, medium and heavy users. Therefore, segmentation assists companies to group the prospects into small sub divisions who have unique needs and consequently strategize on the right marketing plan (Kotler, et al, 89). This assists firms to act on a particular marketing plan