2.6: Defining Customers – Where to Begin

A study of the potential customers available in a trading area is actually a study of the location and the potential customers. The primary questions you seek to address include “What is the 'description' of the potential customers available in a market?

Table 1.3 depicts the necessary customer demographic information to gather regarding a trading area. In essence, you are gathering information to help determine the appropriate way to segment groups of individuals.

In essence, you are gathering formation to determine the appropriate way to segment groups of individuals to target. You will use the demographic information you gather to define your 'approach' to the segment(s) you select to target with your restaurant concept. First, you define the potential customer base, and then, you identify the segments within that base that appear to be a good fit for your operational strengths.

Table: 1.3 Customer Study Inclusion

Population Size	For at least a 3-mile radius. This represents a normal trading area for a restaurant.
Age Groups	You may target one segment or multiple segments in a small city. This includes children, teens, young adults, middle-aged adults, and older adults. Each have different characteristics. Include a psychographic definition for an age group
Male/Female	Understand the percentage of each is important as each group has differing dining habits, and lifestyles that a restaurant must accommodate.
Income	Disposable income is an important consideration. Income drives behavior and behavior translates into frequency. The foodservice industry typically functions on a 'nice' to have basis rather than as a 'need' to have. People must be able to afford your concept.
Single, married, household	This figure can affect the distribution of restaurant traffic and how people will arrive at the restaurant - as a couple, a group of four, someone alone, and so forth. It will eventually speak to the table layout in your dining room.
Education	Education speaks to the frequency of dining out. The higher the education, the more meals consumed away from home.
Occupation	Education, income, occupation, tend to influence each other - blue collar and white-collar populations have different lifestyles and eating patterns.
Other relevant information	Consider ethnic origins, regional differences and so forth, as these are other important factors. Customers must have an affinity for the cuisine the restaurant offers.

How can we match customer needs and preferences with a proper menu?” In essence, you are gathering formation to determine the appropriate way to segment groups of individuals. The demographic information you obtain will be useful to define your 'approach' to the segment(s) you select to target with your restaurant concept. First, you define the potential ‘customer base’ you identify the segments within that base that appear to be a good fit for your operational strengths.

You are conducting a feasibility study to predict the potential of a business using demographic, psychographic, marketing (city, state, and so forth), and personal knowledge, your own or others to determine 'who' you will target. The study should include a detailed discussion or summary of what you found concerning the following elements: (1) size of the population; (2) age groups; (3) male/female; (4) income; (5) single, married, household information; (6) education; (7) occupation; and (8) other relevant information. Use charts and graphs to condense information into more useable collectives. Also, include the sources for the information you obtain which helps to support the credibility and accuracy of your findings.