4.6: Classroom Preparation Assignments

Segmentation Exercise \(\PageIndex{1}\)

1. Introductory paragraph
2. Segmentation strategy
3. Broad or narrow segmentation
4. Age groups including psychographic ‘face’.
5. The total segment demand in the area
6. Your share of the segment demand – market share & business mix variance.
7. Provide examples where applicable

Example

Marketing Strategies Example
RESTAURANT OVERVIEW

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THE AIM OF MY RESTAURANT IS TO CREATE A NEIGHBORHOOD INSTITUTION FOR ALL THE LOCALS OF THE NASHVILLE DISTRICT THE GULCH TO BE A GO-TO SPOT SERVING INEXPENSIVE MEALS WITH FRESH, LOCAL INGREDIENTS AND A VARIED MENU THAT KEEPS THE LOCALS COMING BACK TO SEE WHAT’S NEW.

However, no matter the envisioned menu of the restaurant concept, the success of the restaurant will depend on the marketing techniques used to gather this customer base of locals. I need to examine marketing techniques that will affect my target markets.

TARGET MARKETS

My target customers will primarily be locals of two generations: first, the young working class who are educated, currently in or just graduated from college, and have a lower income. Second, the older working class who may be old enough to receive Social Security benefits but have not yet retired yet. Additionally, this area receives a good bit of tourism from the hotels nearby and from the tour busses that pass through the neighborhood on their ways Downtown or to Music Row.

By analyzing these groups individually for marketing strategies that would best fit them, we will build a local name for our restaurant as the go-to spot in the neighborhood.

Younger Working Class

As explained in concept 1, a large percentage of locals in The Gulch live in the numerous apartment and condominium buildings in the district. This means, potentially, some of them will be living right above my restaurant. Most of these locals are of the young working class: those without families who are in their twenties and maybe early thirties, most have college degrees but who have not spent enough time in their respective industries to reach higher income status yet. This is one reason why it is crucial for our menu to be inexpensive. Our restaurant must be one where the locals keep coming back, not one where it is a special treat to go.

The younger working class I speak of is highly connected to the internet, so a social media following may be the best way to connect to them in the end. However, we must build up the social media following first, so perhaps we can offer something free, like a drink or a dessert, to anyone who shows us they have ‘liked’ our Facebook page or followed us on Twitter. However, in addition to this, we must ensure that our social media posts are quality, which our market will actually want to see our posts in their feed and not consider it “just another advertisement.” Besides our daily specials, maybe we can make posts about fun facts about our ingredients, or where they come from, or posts about events going on in the area.

Older Working Class

The older generation, however, is not as connected to the internet as their younger counterparts. I will need to rely on a different technique to gather this customer base. Perhaps once a month or so, we can send out flyers to all the locals with coupons offering tastings of perhaps our desserts or maybe $2 off an entrée or something similar. We can also post these flyers on street poles near the bus stops in the area. Perhaps during certain hours of the day, like in the early afternoon, we can also offer one free cup of regular coffee with every meal, if it is financially sound to do so—sort of like a happy hour for the older generation who might want to eat earlier in the day. Finally, I would like to have a chalkboard or a whiteboard clearly visible on our storefront so that we can advertise one of our specials. The older generation in this area does not tend to drive, so perhaps we should let our store advertise itself when they walk by.

Out-of-Towners

Though our primary market is the locals, I do not want to pass up the possibility of getting business from non-locals and tourists as well. The Gulch is home to a couple of hotels, so I would like to talk with the owners of those businesses to include flyers or coupons for my restaurant in their Nashville guides or at their front desk. The Nashville Scene is also the go-to magazine that locals and tourists alike read to see what is going on in the city. As we’re gearing up to open, and periodically after that, I’d like to place ads in that magazine to garner some business from all over Nashville, not just in The Gulch.

Discussion Questions \(\PageIndex{2}\)

1. What is market segmentation?
2. What are the steps in the segmentation process?
3. What is hyper-segmentation and what marketing advantages does it provide?
4. What is a differentiated strategy?
5. Five main factors affect a company’s segmentation strategy discuss the importance of each.
6. The ‘family life stage’, a demographic variable, would affect marketing decisions how?
7. What are the typical behavioral variables?
8. What are the major criteria to determine an ‘ideal market segment’?
9. Describe the market segments decision process.