Market Survey PDF

TH2306 MARKET SURVEY Foodservice operators must perform a market survey to acquire information about a particular location and the types of residents w...

TH2306 MARKET SURVEY Foodservice operators must perform a market survey to acquire information about a particular location and the types of residents who live there, so they can establish a foodservice operational concept that will meet the needs of their target market. The market survey is a detailed study of the people, the community, and the physical location of the foodservice establishment (McVety et al., 2009). Preliminary Steps There are two (2) basic steps in preparing a market survey. The first step is to establish the style and the type of foodservice operation or concept, and the second is to determine the community's need for such a business establishment. These steps should be done before any money is invested. The following factors must be considered in performing the above steps (McVety et al., 2009): Capability of cooks and consistency of preparation. The capability of the chefs or cooks to produce the quality and quantity of food necessary is a basic consideration. The use of standardized recipes (recipes that have been tested and revised repeatedly to produce a consistent, standard-quality food product) and cooking procedures will help ensure consistency. The menu complexity, the number of meals served, and the number of people to supervise are also elements that affect the capability and consistency of the restaurant kitchen. Equipment capacity and layout. The proper equipment must be installed in an efficient layout to produce the desired menu items. A systematic flow of items from the receiving clerk to the guests is critical to operational efficiency. When ensured, this achieves maximum production efficiency. Additionally, menu items must be selected to avoid the overuse of one (1) piece of equipment. Seasonal availability of menu ingredients. Availability requires establishing and maintaining a constant, reliable supply source at a reasonable price. High-quality or fresh ingredients make high- quality or fresh products. Operators must take advantage of seasons when items are at their lowest price and best quality. Price and pricing strategy. Price is a major factor in menu selection. Pricing strategies must be considered to drive business in foodservice operations, such as using bundling (combo meals, value pricing, and couponing. These pricing approaches strive to either increase the number of customers patronizing the operation or the amount each customer spends. Nutritional value. Customers are now becoming increasingly concerned about the nutritional value of food. This situation creates a higher demand for healthier items such as chicken and fish. Accuracy of menus. It is important in food service to avoid misrepresenting what is being sold. Restaurants must be accurate and truthful when describing dishes on the menu. Menu items. These depend on the type of restaurant. The number and range of items on the menu are critical to the overall success of a restaurant. A balance is achieved by offering a selection of different food items in each category or section. Menu types. These identify which cuisine, service style, and selection of food choices are being offered by a food service establishment. Menu engineering. It helps balance a menu that is too high in food cost, which results in giving food away, and too low in food cost, which rips off the customer. It is a management tool that takes a deterministic approach to evaluating decisions regarding current and future menu pricing, design, and contents. 01 Handout 1 *Property of STI  [email protected] Page 1 of 4  TH2306 Menu design and layout. The menu is known to be the silent salesperson of a food establishment because its design indirectly influences sales revenue. A well-designed menu can educate and entertain customers and be a communication, cost control, and marketing tool for the restaurant. Its overall menu design should reflect the ambiance of the restaurant. Standardized recipes. These are used to maintain consistent food quality. A carefully developed recipe helps cooks because the portion size, ingredients, weights, and production steps, including cooking methods and time, are indicated. Menu trends. These refer to the changes and shifts in consumer preferences, behaviors, and consumption patterns related to food and beverages. These trends can encompass various factors, including ingredients, flavors, cooking techniques, dining habits, and nutritional considerations. Areas of Analysis The menu is the most important part of a restaurant concept. In some restaurants, the guests and servers are also asked for input, which makes room for consensus building and a feeling of ownership of certain dishes. The menu must reflect the concept and vice versa. The following are the areas of analysis when conducting a market survey (McVety et al., 2009). Customer The customer is one of the most important elements of a food service operation. It is the customer who ultimately determines the operation's success or failure. The customer is also known as the market. Key factors to consider about customers include the following: Desired market. The desired market or customer/s that the food service concept wants to cater to and attract must be decided. The foodservice operation must keep the wants and needs of the target customer in mind to devise products that will satisfy them. Market classifications. People within each generation have unique yet common needs and desires. Frequently, they have similar opinions and points of view from having lived in the same period and having had similar experiences. It is important to recognize these target markets' innate differences to succeed. Gender and age. Gender influences many decisions within a business plan, including the type of layout, size of chairs, interior design color scheme, the portion size of food items to be served, and the type of cuisine. These factors assist business owners in determining the marketing and merchandising methods needed to generate sales. As people age, their desires and dietary and emotional needs change. Age influences decisions on the price, nutritional requirements, style of entertainment, accessibility of the operation, type and intensity of background music, size of the lettering on the menu, and service style. Disposable income. It refers to the income remaining after taxes and personal bills have been paid. It is also called entertainment, fun, or luxury money. The greater the income a market has, the greater the disposable income available for dining. It must be researched before deciding on the check average (the average amount customers are willing to spend buying items from the establishment's menu) and the food service concept. Food preferences. Collecting menus from several food service operations with similar concepts and looking for items listed on most menus makes it possible to deduce which items sell well. 01 Handout 1 *Property of STI  [email protected] Page 2 of 4  TH2306 Education. People with higher education tend to be more receptive to new ideas and try something new. Knowing the target market's educational background also allows for using more appropriate language in designing the descriptive copy of items on the menu. Religious orientation. Some religious cultures have laws restricting the consumption of particular food items and the preparation methods used. Knowing the customers' religious backgrounds can help strategize marketing gimmicks and build sales. Ethnicity. Recognizing a market's ethnic background and offering some favorite authentic national dishes is a good way to add variety to the menu. A food service operation may also use fusion cooking (blending different ethnic dishes) to create a more interesting menu. Occupation. Knowledge of this can assist in planning dishes on the menu and their portion size. Customers who work in occupations requiring more physical activity, like construction, will burn more calories on the job and require larger portions. Guests who spend less physical effort on the job burn fewer calories and may prefer food items that contain fewer calories, fats, and sugar in smaller portions. Arrival patterns. It refers to the hours at which groups of customers dine out. Knowing these allows for appropriate and adequate dining room setup and timely turnover for increased covers and greater sales. When customers are accommodated well, this usually results in a higher seat turnover rate (the number of times different individuals use a seat in a restaurant during a meal period or time) and increased sales. Preferred days for dining out. Knowing which business days are popular and which are slower helps to establish the need for merchandising and marketing programs. Fridays, Saturdays, and Sundays are popular days for dining out because people are often paid their salaries on these days, therefore having greater disposable income. Community The geographic region, district, city, or town from which most of the food service operation's customers come is known as the community. The elements or key factors to consider are the following: Growth rate. Suppose a community has a declining population or a high unemployment rate. In that case, it is wise for a restaurant owner or menu planner to discover the reasons behind it and use those as a basis for decision-making to push through with an operation or not. Other reasons for not choosing a location include a high crime rate, high rents, and high taxes. Availability of liquor licenses. Alcohol or liquor is one (1) of the most profitable commodities the food service industry sells. Obtaining a liquor license in some communities and other countries is expensive and difficult. Each area has its laws and procedures in liquor licensing. Existence of competition. The market survey must consider these two (2) basic types of competition: direct and indirect. Direct competition includes food service operations that are directly related or similar to another operation. These offer similar cuisine, décor, capacity, average check, and turnover rate. The indirect competition consists of food service operations that are not similar to that of the investor but are competing for the same customers. Number of families. It usually indicates whether the community has a stable or a growing population. Where there are many families with children in a community, there is usually a large school system. The school system can be a good source of an effective merchandising program for the foodservice establishment. 01 Handout 1 *Property of STI  [email protected] Page 3 of 4  TH2306 Potential for advertising. It is one of the key elements of a successful business. It aims to communicate a product’s features and benefits to persuade consumers to purchase it, from in-store displays to commercials and even packaging. These advertising methods invite the foodservice industry to be creative, stand out, and extend their competition for customers’ minds, hearts, and stomachs. Physical Location When selecting a location, an investor should first analyze the area's population. Population patterns may drastically shift if they depend on a particular industry for financial survival. The foodservice operation that depends on customers of a particular declining industry could also be closing its doors. These are the considerations when selecting a business's physical location: Zoning. There are three (3) major types of zones: residential, industrial, and commercial. Each has zoning ordinances that must be followed. One cannot freely build any building in a residential zone. This zoning restricts business developments for the safety of the residents. Industrial zones are established for large-volume companies, while commercial zones accommodate small-volume companies. Zoning laws change as the population changes in a community. Street and Traffic Information. Street patterns, such as one-way streets, should be noted. Foodservice operations on one-way streets usually do not have as much traffic as other operations on two-way streets. The width of the street and driveway are important as well. Delivery trucks must easily enter and exit the establishment. Intersections always slow down potential customers. The slower the speed limit, the greater the opportunity to observe an operation. Sales Generators. Examples are theaters, shopping centers, malls, and other establishments that can produce sales in the area. Visibility. The visibility of a foodservice operation can reduce or increase the cost of advertising. A property that has high visibility saves on advertising costs. At the same time, one in a city, hidden by a building, requires more advertising to let people know where it is. Parking. It is necessary to help attract more customers. It must accommodate customers, employees, lights, dumpsters, delivery trucks, and landscaping. Information needed in a market survey can be collected or gathered from different valid sources such as the public library, city hall, Chamber of Commerce, National Restaurant Association, banking and financing corporations, actual surveys conducted, and legitimate websites from the Internet. References: Faria, J. (2023). Food advertising in the United States – statistics & facts. In Statista. Retrieved 16 November 2023 from https://www.statista.com/topics/2223/food-advertising/#topicOverview McVety, P., Ware, B., & Ware, C. L. (2009). Fundamentals of menu planning (3rd Ed.). Hoboken. NJ: John Wiley & Sons, Inc. Payne-Palacio, J. & Theis, M. (2021). Foodservice management: Principles and practices (13th Ed.). Pearson Roque, N. L. O., & Siggaoat, J. P. (2016). Commercial cookery NC level 2. Manila, PH: JFS Publishing Services. Walker, J. (2022). The restaurant: From concept to operation (9th Ed.). John Wiley & Sons, Inc. 01 Handout 1 *Property of STI  [email protected] Page 4 of 4