Marketing Research Applications in the Restaurant Sector
Introduction
In this article I’ll cover some applications of marketing research in the restaurant world. Competition in this industry is fierce, and survival belongs to the most worthy and the smartest. The article isn’t aimed only at restaurant owners but also at owners of outlets selling fresh consumer products — juice bars, cafés, and so on. It is not meant to explain each type of research in detail, but to serve as a guide — giving you a sense of the research type and its keywords, so you can later choose the one that fits you and look into how to execute it, either yourself or through specialized agencies. Some types are linked to resources explaining the research in detail for those who want more.
Before Opening
Desk Research
An investor runs many desk-research studies before opening a restaurant’s first branch. Most of it follows the typical desk-research pattern in which the researcher gathers information about local regulations and laws, the licenses required to begin operating, design requirements, and so on. All of this is usually available on the official websites of relevant government bodies, or by visiting those bodies directly if it’s not online. Part of the desk research also includes searching for suitable human resources, and if these aren’t locally available, the person begins researching recruitment laws and procedures. From there they move on to researching tools and equipment — prices and types. No aspect should be neglected in desk research.
On that note, I recommend restaurant owners purchase the report prepared by Euromonitor International dedicated to the restaurant sector, priced at $990.
Concept Testing Research
Forget regulations and laws — all of that comes later. Do you have the right concept? Have you studied the market and understood tastes? Have you decided which world cuisine your dishes will represent — or are you just looking to invest by buying franchise rights and using a particular brand? Even if franchising is your choice, you cannot do without marketing research to understand the market and put together marketing strategies targeting specific segments. The “one size fits all” principle does not feature in the success equation under fierce competition. Concept testing research is often paired with name testing (the restaurant’s name) to measure the impression it leaves on the sampled audience — and I have a separate article on naming and brand research.
Perhaps you have a new restaurant concept you want to bring to market, but before that you’d like to test how the community will react to it before sinking massive investment into it. You can run a concept-testing study. Worried about idea leakage? Keep it within a trusted inner circle — but proceed with a guide.
Consumption Habits Research (a.k.a. Usage and Attitude Research)
Restaurant owners and consumer-goods producers run many studies to understand the drivers and barriers behind consuming certain products, and to identify why some products are preferred over others. The same applies to restaurants: what are the habits of different community segments when going out to eat, what are their drivers, and what is their definition of quality? Answers to these questions will help the marketing department tremendously in building successful marketing strategies.
Competitive Landscape Research
If there are competitors in the type of restaurant you want to open, have you analyzed them in the market? Their strengths and weaknesses, their menu pricing, the kinds of human resources they rely on, their marketing strategies? Then think about what will be different in your offering — what competitive edges you want to provide to capture a larger market share.
After Opening
Mystery Shopping Studies
You’ll find governance in global restaurant chains at its best: there are documented procedures for everything staff or chefs must do, which calls for specific measures to gauge adherence to those processes and policies. One such measure is mystery shopping research. The restaurant either contracts with a research firm to execute it, or does it more cheaply by enlisting friends or relatives. The mystery shopper visits the restaurant’s multiple branches (if any), acts out a specific scenario as if they were a real customer, and once the experience is over, writes up their observations and ratings on a dedicated survey. As a restaurant owner — especially if God grants you success and you expand — you won’t have time to monitor every branch yourself, and assigning a full-time monitor can be expensive. I know a fast-food chain that hired a research firm to evaluate its meals across different branches; all the researcher had to do was buy the same meal at several branches and then evaluate it. You might be surprised at how much attention some operators give to ensuring taste and quality are identical across every branch.
Product Testing Research
Want to introduce new, unfamiliar dishes? Worried about whether the community will accept or reject them? Before you put any dish on your menu officially, test it. No customer will mind trying a new dish if you offer it to them free. Let them enjoy the meal, sit beside them, and record observations from their reactions. After they finish, ask them product-testing questions. Do this with a sample of customers who represent the community that comes to your restaurant — age, gender, nationality. Ten to twenty customers. Then decide whether to adopt the new dish, reject it, or modify it and test again. If you feel this will take too long, ask your friends to volunteer their mouths to try your new dish and apply the same method.
Digital Marketing Research
Being present on directory sites — Maktoob, TripAdvisor, Qaym — as well as social networks like Twitter, Facebook, Instagram, and so on — and encouraging audiences to participate in specific ways, is essential for hearing the voice of the customer. Especially since the current generation has a strong tendency to share their experiences and produce content about them. Encourage customers to write on social networks or check in on Foursquare, for example. Some restaurants have tied their loyalty programs to customers’ social-media activity. I started by mentioning presence and activating networks because you won’t be able to run dedicated research analyzing social-media content unless you are already present and active. This research uses specialized analytics tools to summarize what’s happening in the world of social media and gives you statistics about post characteristics and snippets, since you can’t realistically analyze every post individually.
Site Selection and Expansion Research
This is specialized research for selecting locations to open or expand. It is very expensive, and I’m not aware of any firm in Saudi Arabia capable of executing it. What some firms currently do is more akin to a census of retail outlets, recording all the details related to each outlet. Because the cost is very high, multiple parties share the cost — a principle called syndicated research.
This research considers several criteria when selecting the best coordinates: target audience, social class, places of residence, population density in the area, demographic distribution, locations of competitors’ branches, car traffic, parking availability, ease of access, surrounding commercial activity, your budget to buy or lease the property, and above all, the availability of a suitable outlet in terms of space in that area. The matter is highly sensitive — choosing the wrong location may mean inevitable failure for your restaurant. The usual cultural reflex in our part of the world is to open next to your competitor, but that doesn’t necessarily mean it’s the right location.
As an alternative, you can do a quick analysis of major companies and their locations as advertised on their websites — I mean large companies like the telecoms STC and Mobily, and the banks. The expansion and site selection of their branches isn’t done randomly. Just keep in mind that they target all classes of the population.
Trend Research
Like any other industry, the market goes through trends influenced by several factors. Will you keep up to swim with the current, or stay frozen in your menu and your service style and fall behind? Trends change over time and can be tracked through marketing research, by listening to what’s happening on social networks via specialized technology tools, or by following industry-specific sites — I don’t know of any in our region, but in the US there are more than 15 sites dedicated to food and restaurants alone (“the bunch over there really love their stomachs”). As a quick example, recently in the Gulf we’ve noticed some fast-food chains like McDonald’s offering healthier options like salads — an attempt to change the negative mental image being shaped by campaigns attacking fast food and its harms.
Customer Satisfaction Research
From what I’ve observed in the Gulf, the vast majority of restaurants rely on a traditional method to measure customer satisfaction — comment cards. I’m talking about cardboard cards you fill out and drop into a box resembling a suggestion box. The main flaw of this method is that you don’t get a representative sample. Studies have shown that the people who fill out these cards are usually at one of two extremes: customers who felt overwhelmed with joy, or those who felt utterly miserable. In any case, for those who want to go deeper into this type of research, you can refer to a detailed article I published six years ago.
There has also been use of certain electronic devices featuring four faces expressing customer satisfaction levels — the most famous being from Happy or Not. But these devices, too, do not adequately explain reasons for displeasure or satisfaction. They only give a general indicator of satisfaction levels and require decision-makers to investigate the issue whenever they notice clear shifts in the averages. One of the drawbacks of this method (and the one before it) is that employees sometimes interfere by submitting fake responses to mislead decision-makers into thinking things are fine.
Ultimately, using either of the methods above is better than nothing — and I’d recommend the traditional first method, as it gives more information than the second.
There is an improved version of the Happy or Not devices offered by another company — http://doyoulikeus.com/ — worth looking at, but I don’t know anyone who has used it well enough to elaborate.
In some restaurants, a short survey is designed and loaded onto a handheld device, and a quality control manager is assigned to walk the branches conducting random interviews and reporting back to head office on branches’ adherence to agreed quality standards.
Brand Image Research
Every restaurant needs, for marketing purposes, to conduct research on its brand image — starting with brand awareness levels compared to its competitors, and the impressions and mental images formed in customers’ minds about the restaurant and its competitors. All of this serves the marketing side of the business.
Conclusion
Restaurant owners with only a few branches may find it difficult to invest in marketing research given the cost of executing it through specialized firms. My advice: understand the principle of the research and try to apply it yourself (DIY). Later, if God grants you success and your branch count grows large and spread across cities, consider working with one of the marketing-research agencies in the region to do the job for you.
I recommend checking out this site, which belongs to a US restaurant association:
The level of organization, research, and statistics they provide will astonish you — and you’ll see clearly that the opportunity in the Gulf market is enormous, with a vast room to improve and organize the service we offer.
Note
“The views expressed in this article are personal and do not necessarily reflect the views of the organization I work for.”
Related framework notes: Voice of Customer (VoC), NPS, CSAT, CES, Moments That Matter
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