4 Tactics to Leverage Market Research for a Restaurant Business

Authored by Novus Insights 03/10/2022

Given the fierce competition in the restaurant sector, restaurateurs, café owners, and other eatery entrepreneurs must appreciate the importance of market research consulting. The restaurant sector is dominated by shifting consumer preferences and, every day, more eateries pop up, further increasing the level of competition. To survive such fierce competition, there is a pressing need to focus on improving customer experience. This is where market data research can be uniquely beneficial. Hiring the ideal market research company can help you to conduct a thorough examination of your prospective customer's preferences and gain an understanding of your rivals. The big question is, how do you approach market data research as a restaurant owner? In this article, we will take a look at some of the best market research tactics that top restaurant businesses implement to stay ahead of the competition.

Why market research is important for a successful restaurant business

Let’s be honest! The COVID-19 pandemic has had a devastating impact on the global restaurant industry. Although the pandemic has slowed down and things have started getting back on track, people’s dining habits have changed significantly. Consequently, if you are still relying on age-old practices to run a restaurant business, you might well be just one step away from failure. To flourish in the modern restaurant space, it is crucial to gain a thorough understanding of the latest market trends. This can be achieved by identifying consumer pain points and figuring out exactly what they are looking for. This is the most effective way to maintain a competitive edge. For that, you need a proven market research company by your side that can conduct the best market data research. By conducting market research, restaurant businesses can learn about the essential demographics of their prospective customers. A thorough market analysis provides insights on how best to target each customer to meet their wants and win their loyalty.

4 tactics for effective market research

Now that you know the importance of effective market research for restaurant businesses, let’s dive into the best research tactics you must deploy to gain actionable insights.

1. Understand your Target Market

Just like any other industry, the secret to running a successful restaurant business is understanding your target market. There are many ways to do so. For starters, you might want to figure out the preferences of your ideal customer. Monitor their eating habits, follow their social media check-ins, and understand the reason behind their specific behaviors. If you are planning to open a steak house in the city, you should first identify whom you should cater to. Many factors can influence your decision, such as average cuisine price and restaurant concept. If you aim to attract high-paying customers, it might be a waste of time to advertise to school students. Chances are high that they can’t afford to pay for a medium rare tenderloin at a high-end eatery.

2. Identify your customers

Although you may have a notion of what type of customers you want to target or who your usual client is, the people who are most likely to eat at your restaurant may not look anything like you imagine. Clarify your idea of a target market, then use market research to stress test it in order to keep your business viable. If you already have a certain concept in mind, find a market where your uniquely-styled restaurant will succeed. For instance, if you open a non-veg restaurant in a location that is mostly occupied by vegetarians or vegans, no matter how extravagant your restaurant is, it won’t succeed.

3. Consider market saturation levels

Once you identify your target market and customers, it’s time to figure out market saturation levels. Is there any other restaurant chain operating in your preferred location? Are these restaurants driving as much foot traffic as you desire? Remember that the “population to restaurant seat ratio” may not always provide a complete picture. For instance, urban or metropolitan areas with many rich couples without children may dine out more frequently than suburban communities with a higher concentration of lower-income families and children. Signs that your local market is over-saturated include a significant turnover in restaurant ownership and the number of restaurant closings relative to new launches.

4. Research your competitors

There are two distinct types of competitors to consider while researching the competition for your restaurant concept. They are:

Primary competition: Local eateries that provide cuisine, pricing, services, or ambiance, similar to yours.
Secondary competition: This includes any neighboring restaurants that, regardless of not having anything in common with your menu, generate bills of a similar size.

When researching competitors, a leading restaurant market research company generally aims to figure out answers to the following questions:

Are your primary competitors formal or casual?
Does their location offer them any advantages or disadvantages?
Are competing restaurants easy to find and access?
Are their waiting areas and parking lots full? If so, what are their peak hours?
Do they offer takeout and/or delivery?

Final Word

You will probably agree that one of the biggest obstacles that restaurant businesses are facing in the post-pandemic period is the changing customer sentiments and preferences. The best way to stay ahead of your competition is to leverage the services of the best marketing consulting companies. Premier business consulting companies can help you analyze consumer behavior through various market research models, deriving actionable insights that can assist you in outperforming your competition. When searching for a proven market research firm, look no further than Novus Insights. We are one of the leading marketing research agencies that can help you establish a firm footing in the new post-pandemic normal. Call +91 1244142292/ +91 7428225350, or email contactus@novusinsights.com. You can also fill out our contact form, and we will get back to you at the earliest.