How do you segment your F&B market and why?

1 Demographic segmentation

Demographic segmentation is based on observable attributes of your customers, such as age, gender, income, education, occupation, family size, and lifestyle. This type of segmentation helps you identify the size, growth, and potential of different segments, as well as their spending power and consumption patterns. For example, you might target young professionals with higher disposable income and a preference for trendy and healthy F&B options, or families with children who look for convenience and value for money.

2 Geographic segmentation

Geographic segmentation is based on the location of your customers, such as country, region, city, neighborhood, or climate. This type of segmentation helps you understand the cultural, environmental, and legal factors that affect your F&B market, as well as the distribution and logistics challenges. For example, you might adapt your menu, pricing, and promotions to suit the local tastes, preferences, and seasons of your customers in different areas, or expand your reach to new markets with similar characteristics.

3 Psychographic segmentation

Psychographic segmentation is based on the psychological and behavioral aspects of your customers, such as personality, values, attitudes, interests, hobbies, and lifestyle. This type of segmentation helps you create a deeper connection with your customers and differentiate your F&B brand from your competitors. For example, you might appeal to customers who are environmentally conscious and socially responsible by offering organic, fair trade, and locally sourced F&B products, or to customers who seek adventure and novelty by offering exotic and fusion cuisines.

4 Behavioral segmentation

Behavioral segmentation is based on the actions and responses of your customers, such as their purchase frequency, loyalty, usage, benefits sought, occasions, and feedback. This type of segmentation helps you optimize your F&B operations and marketing strategies to increase customer satisfaction, retention, and profitability. For example, you might reward your loyal customers with loyalty programs, discounts, and referrals, or attract new customers with free samples, trials, and testimonials.

5 How to segment your F&B market

There is no universal approach to segment your F&B market, so you can use a combination of different criteria and methods depending on your objectives, resources, and data availability. Market research, cluster analysis, and persona creation are all common methods. You can conduct surveys or interviews to collect primary data from customers, use secondary data from industry reports or online platforms, or use statistical techniques to group customers based on similarities and differences. Additionally, you can create fictional profiles of ideal customers based on demographic, geographic, psychographic, and behavioral attributes. It's important to regularly monitor and evaluate your segments to ensure they are relevant, measurable, accessible, substantial, and actionable. Doing so can give you an advantage in the F&B market while delivering value to customers.