Restaurant Marketing – Demographics & Psychographics

Updated October 18th 2013

The people who live and work around your restaurant are likely to share certain characteristics. By analyzing their age, income level, size of household and other factors that may influence purchasing decisions, you can decide the best way to market yourself to them. These factors are all demographic or psychographic elements.

Demographics and psychographics provide measurable characteristics to your target marketing strategies. What used to be “people”, “citizens” or “tourists” is today being analyzed into more details so you can adapt your product, marketing and pricing to the market(s) you are targeting.

You can find demographic information online, at your local library, chamber of commerce or city offices. Sometimes, it is easiest to call the local government and ask if demographics for your city are available on the internet. Make sure you find the most up-to-date information available.

When you analyze your area’s demographics, pay special attention to the following factors.

• Age
• Income levels
• Education and job types
• Marital status
• Size of household
• Housing and rental prices
• Local businesses

Analyzing these factors will tell you a lot about the spending and eating habits of people who live in your trade area. For example, single young adults with middle to high income levels will typically dine out more often than those who are married with children.

Psychographics

One of the main purposes of demographics is to develop an idea of an area’s psychographics – the behaviour, values, opinions, cultures, interests and lifestyles of a demographic group. To learn about psycho-graphics, it may be worthwhile to go to a market research company to find out about the purchasing habits of people who live in your trading area. But as usual, always try to search yourself through the web. Be sure to google all related keywords you come across and you will also have a better understanding on how to approach or what to ask a research company. A marketing company collects data from credit cards, polls and censuses to analyze different segments of the population. You could also purchase this information from a credit card company. But it will be much more efficient and cheaper to know exactly what you are looking for.

If the above options are too expensive, consider doing field research. Go to all the nearby markets, shops, bars, restaurants, cafés and clubs and try to mingle in order to learn about the people in your targeted segments. You can learn a lot about consumers’ product needs simply by being around them, watching and interacting. The smaller your business area, the easier to do. It will of course be nearly impossible to field research New York but again this issue indicates that you need to be more specific about your quest.

Here are some general psychographic statistics on dining out that I found on the web: my comments are in blue.

1. 18 to 24-year-olds eat out and drink alcohol outside the home more often than other age groups.  So promote alcohol consumption related special events by considering other topics that are interesting to this age group such as music style, celebrities or other aspects that are trendy to 18-24 year olds.
2. Generation Y – those born since 1978 – tend to eat more often at quick-service and pizza restaurants.  These are usually those families that have many mouths to feed and therefore aim at such restaurants as everyone in the family needs to be happy. And kids eating foie gras, mussels or showing excitement about Ossobuco is not necessarily common ;-)
3. Generation X – those born between 1965 and 1977 – tend to prefer quick-service or casual establishments with comfort and a good perceived value.  I am in this category and agree completely. I love insider tips where I do not have to pretend or adapt my voice levels so that I don’t feel like I am interrupting others, and enjoy an overall entertaining experience with a good meal. Too much presentation turns me off as I am not visiting a gallery and do not believe that quick-service or casual restaurants cannot cook extraordinary without Michelin ambitions.
4. Smaller households eat out more often than bigger households.  Might sound logic to you and actually seems logic but assuming both households had the same disposable income per person, would this comment still be true? Or is it true and the restaurant facilities are usually just not equipped or provide the right services for bigger households? Questions arise very easily when you want to understand your market and dig deeper into it. Just do not dig too far ;-)
5. Singles and DINKS (Double Income No Kids) eat out more and spend more when they eat out. They typically spend 65% more on dining out than couples living with children.  If this is your market then it may be good to only buy tables for 2 that may be put together and be located in the city center.
6. Singles and DINKS are generally more concerned about the quality of food and the elegance of the atmosphere than the price.  Please understand this right. This category may still prefer quick-service or pizzeria venues but in case they opt for quality of food and elegance, price is not important.
7. People with more income tend to eat out more frequently.  Again a pretty logic statement. Even the success of private chefs or private caterings is not changing it.
8. People who work long hours eat out more than people who have enough free time to cook their own meals.  Maybe special late night offers could be a good thing to promote?
9. Working wives tend to prefer eating out more than housewives.  Here I wonder what their families or partners do and is this statement maybe including lunch? If yes then this is logic as well, but makes me think that I should maybe have a more female offer for lunch which includes more healthy foods, salads, soups, etc.
10. Traditionally, the older people get, the less frequently they eat out.  However, this may change soon, since many baby boomers grew up eating out more often.
11. Seniors tend to eat early and slowly, and they look for good values with small portions.  Remember not everything is so easy to do when you get older, eating is part of it. Not spicy, not chewy, etc.
12. Wealthy, well-traveled consumers, particularly the wealthier baby boomers and the next generation, are more likely to look for ethnic or exotic food when they eat out.  This explains why trend concepts attract a special type of clientele that maybe cannot be explained by traditional demographics or psychographics.

Targeted Marketing is generally much more successful after your homework on demographics and psychographics has been done. In any case and any minutes spent on this research will allow you to apply the right strategy on where to search, how to reach and what to tell your target market in order to consider your business next.

Written by Daniel Grossmann