Classification of Food and Beverage Services
Classifying Market Segments and Types of Customers in the Food and Beverage Industry
Food and beverage services involve providing customers with food and drink in various types of establishments. The classification of these services can be diverse and lacks a defined standard due to the extensive nature of the industry.
Categorizing Food and Beverage Services for Target Customers
One way to classify food and beverage services is by market segments or target customers. Take a look at the attached image for an overview of how these services can be grouped accordingly. Restaurants or outlets that offer food and beverage services within hotel premises are considered service providers in the hotel market. These providers are often owned by hotels and function as sub-units, providing hotel guests with additional amenities while generating extra income for the company.
One common method of categorizing customers and market segments in the food and beverage industry is by demographics. This involves considering factors such as age, gender, income level, and education level. For example, a high-end restaurant may target older, affluent customers who are willing to pay a premium for a luxurious dining experience, while a fast-food chain may target younger, budget-conscious customers who value convenience and affordability.
Another way to categorize customers is by psychographics, which considers customers' personality traits, values, interests, and lifestyles. This method is often used to identify niche markets and develop targeted marketing strategies. For example, a restaurant that emphasizes healthy, sustainable, and organic food may attract customers who value environmentalism and healthy living.
Additionally, market segments can be classified based on usage occasions, such as breakfast, lunch, dinner, or snacks. This allows businesses to tailor their menus and promotions to specific times of day and customer needs. A coffee shop, for example, may focus on quick breakfast options and afternoon snacks to attract customers during peak hours.
Overall, understanding the different ways to categorize customers and market segments can help businesses develop effective marketing strategies and provide better service to their customers.
Hotel Market
In the hotel industry, service providers are restaurants or outlets that offer food and beverage services to customers within hotel properties. These service providers are often owned by the hotels themselves and operate as sub-units. Their main function is to serve the hotel guests while generating extra revenue for the companies.
Leisure Market
When we talk about the tourism and leisure restaurant market, we're referring to dining establishments located at popular tourist sites or leisure destinations. Think of food and beverage services available at theme parks, clubhouses, or snack counters found at beaches.
Industrial Market
Industrial markets are typically located within commercial or industrial buildings, providing employees with a convenient option for dining during the workday.
Student Market
Cafeterias or canteens located within schools or universities offer affordable food and beverage services to both students and staff within the premises.
Retail Market
The retail market is typically made up of self-service establishments that sell food and beverages, either for on-site consumption with quick turnover, or for off-site consumption as takeaways. This includes food courts in department stores, convenience stores, and vending machines.
Transport Market
When it comes to food and beverage services, the transportation market covers a variety of areas. These services can include those provided on airplanes, trains, and cruises. Additionally, food and beverage outlets located within transportation terminals - think airports and cruise terminals - are also classified under the transportation market umbrella.
Health Market
In the healthcare market, food and beverage services typically involve providing meals to patients in hospitals and nursing homes. Since the primary group being served includes people with health concerns, it's essential to focus on food control and use ingredients that are suitable for the diners.
Public Market
Food and beverage operations that are government-owned or contracted by government-approved caterers fall under the category of the public sector market. This includes catering services in prisons, police stations, military campuses, and other similar institutions. Typically, these operations are non-profit in nature and receive government subsidies, with cost minimization as a core objective.
Modes of Operations
As well as being classified by market segments and customer types, food and beverage services can also be categorized into:
Independent ownership
Chain ownership
Food and beverage services can also be positioned as profit-making focused or non-profit-making focused in their operations.
Independent Ownership
Independent Ownership in Food and Beverage Services
Independent ownership typically applies to small, family-run food and beverage services where the owners have complete control. However, these types of businesses also have the highest failure rate. It is common to find groups made up of independently-run food and beverage services. Locations can determine the local clientele, but the business usually relies on neighborhood or local customers.
Independent ownership in food and beverage services can offer a unique experience for customers. These businesses often have a personal touch, where owners take pride in providing excellent service and high-quality food and drinks. It's not uncommon to find menu items that are exclusive to these types of establishments, which can make them stand out from larger chain restaurants.
However, owning and operating an independent food and beverage service can be challenging. The owners often have to wear multiple hats, including managing finances, marketing, and hiring and training staff. Additionally, the competition can be fierce, especially in areas where there are many similar businesses.
Despite these challenges, many independent food and beverage services have found success by creating a loyal customer base. By offering exceptional service, unique menu items, and a welcoming atmosphere, these businesses can build a community around their brand. Plus, with complete control over the business, owners can make decisions that align with their values and vision for the future.
Chain Ownership
Understanding Chain Ownership in the Food and Beverage Industry
In the world of food and beverage service, chains can be categorized into single-concept chains and multiple-concept chains. However, most people are unaware that multiple-concept chains are often owned by the same company. Despite this, these chains provide ample opportunities for promotion thanks to their strong local and international brand identity. Additionally, a percentage of sales is typically allocated for advertising. It's important to note that clientele may vary depending on the location of the restaurants.
Single-concept chains
Single-Concept Chains: Examples and Opportunities
Some of the most popular single-concept restaurant chains include McDonald's, Subway, Burger King, and KFC. Interestingly, single-concept chains often provide franchise opportunities to entrepreneurs looking to invest in their own businesses.
Multiple-concept chains
Understanding Multiple-Concept Chains
Multiple-concept chains, such as Maxim's Catering Limited, are companies that operate various types of restaurants – from fast food to Western fine-dining. These chains often have centralized reservation systems, and some even provide franchise opportunities.
Classification of Food and Beverage Services Based on Ownership and Profit Focus
In the image provided, you can find a breakdown of food and beverage service classifications according to two main categories: independent ownership or chain ownership, and profit focus or non-profit focus.
Non-Profit Making
Non-Profit Making Focused
Food and beverage services which are non-profit making focused are mainly subsidized or welfare in their nature. Cost reduction is emphasized in the operations, which explains their relatively low prices when compared with those profit-oriented ones.
Some of these food and beverage services may even provide meals for free. Common examples of these kinds of food and beverage services include cafeteria of enterprises, school canteens and cafeteria in hospitals, etc.
Profit Making
Profit Making Focused
Most food and beverage services available in the market are commercial-based which aim at generating profit. They include general restaurants, restaurants in hotels, fast food restaurants, bars and club restaurants, etc.
Next Lesson
With so many variations of food and beverage services, it can be overwhelming to choose the right one. Here are the four most common types to help you navigate through:
Fine dining restaurants
Casual dining restaurants
Fast food restaurants
Bars
