What Will Affect Your Target Market Selection in a Catering Business?

When it comes to running a successful catering business, you can cook or bake what people want, or try to make people want what you cook or bake. Targeting the right customer mix for your business depends on a variety of factors, including what you’re trained to create, your geographic area, your marketing opportunities, and your budget.

A target market is a specific segment of the marketplace you aim to serve by creating a product or service that delivers specific benefits that these customers want. For example, you might use specific catering menus to target people getting married, parents of young children, or corporations. Younger people might want more ethnic or healthy foods, while parents will want kid-friendly menus. You would use appropriate marketing channels to reach each audience.

If you don't bake and have no connections with a baker or bakery, you would not include potential customers who need bakery items catered. If you are a dessert chef or pastry maker, your target market might be bakeries or banquet halls. If you do not have the capabilities to prepare or serve food on-site, you might target homeowners looking to cater in-house parties using their own serving dishes. You would deliver food in disposable containers. If you have hot-boxes and chafing dishes, and work with a supplier who offers tables, tablecloths and skirts, chairs, dishes, cutlery, and centerpieces, you can target weddings, sports banquets and corporate functions. Eventually, you might purchase all of these items and target the banquet and event market directly.

If you can align with other businesses that service specific segments of the marketplace, you can expand your target market. For example, if you offer appetizers and dinners, and you want to get wedding business, you might develop contacts among cake bakers, photographers, wedding halls, florists and churches. You can cross-promote these contacts, or sub-contract one. For example, you might sub-contract a dessert chef to make desserts you include in your catering menu, marking up the desserts and selling them directly to customers.

If you don’t have the cash flow or credit lines to purchase expensive food items, your target market would not include high-end customers. For example, if a client orders champagne, caviar and lobster, you might not be able to order those items on credit, paying vendors after you receive your payment from the client. If the vendors give you 10- or 30-day terms, but your client doesn’t pay you for two months, you won’t have access to those vendors again, and won’t be able to serve these clients, around whom your business might be built. In this case, you could shift your target market slightly, from business banquets to business luncheons or office meetings.

If there is already an established caterer in your market targeting a certain customer type, you might not want to try to compete head to head. Even if you can compete with that caterer, there might not be enough business in that category to sustain two businesses. An established competitor might have lower operating costs, having already paid off start-up costs for the business, and be able to underbid you. If you see a target market that’s not being served, or is being served poorly, it may be a good strategy to change your initial concept and target that market.