What Is the Target Market for an Upscale Steakhouse?
A restaurant’s target market largely depends on who lives in or visits the local area. If you plan to open an upscale steakhouse, you can study who patronizes your competition to get a clue as to who your core consumer will be, but it will take a demographic analysis of the consumers in your area to solidify exactly who you should be targeting. Once you have defined your target market, you will be in a much better position to develop a focused marketing plan.
Known for its annual Mendelsohn Affluent Survey, market research group Ipsos defines affluent consumers as those who have a household income of $100,000 per year or more. Upscale steakhouses, where meals often cost $65 to $100 per person or more, count these affluent consumers as a key target market. A survey conducted by the American Affluence Research Center reported that 66 percent of the wealthiest consumers plan to continue spending the same amount of money at upscale restaurants throughout 2013, and 5 percent plan to spend more, making this demographic a solid one for upscale restaurants.
Upscale steakhouses that are located in or near urban centers have a strong target market in businesspeople. Business consumers are less price-sensitive, especially when they are wining and dining customers on a company expense account. Successful steakhouses, such as Morton’s and Capital Grille, have historically counted businesspeople as primary target markets.
Upscale steakhouses that are located in a suburban setting also cater to local consumers, many of whom are celebrating a special occasion, such as a birthday or anniversary. Steakhouse giant Ruth’s Chris, for example, has always focused on families and local patrons as its core target market, and it is this group that has helped build the brand. Small independent steakhouses in suburban areas should take note of a 2011 American Express survey that reported that 93 percent of respondents said they believe supporting small, local businesses is important to their community, making local consumers an appealing target market.
By identifying the right target market for your upscale steakhouse, you will be able to focus your marketing dollars so that you get the best return on your investment. You must start with a good understanding of who lives, works or visits your area with data that is available through the U.S. Census Bureau or your local Chamber of Commerce. Remember that your target market is not who you want to patronize your restaurant; it’s the consumer segment who is most likely to become a customer. Restaurant Report advises that in general, a restaurant should ensure that the demographic chosen as the target market would represent enough consumers within a three-mile radius to support your venue.