Answer to Question #181020 in Management for Karabo Maluleke

Question

Fantastic Pizzas is a new restaurant franchise that Mr Reed is planning on opening in Johannesburg. Fantastic Pizza aims to compete in the market by offering good quality pizza at affordable prices as well as provide a memorable experience. The first store will be located in Auckland Park, which is an area buzzing with students and young professionals. The atmosphere and design of the restaurant will be young, vibrant, and trendy focusing on attracting the younger generation. Mr Reed needs to determine who exactly his target market will be, as well as the exact location of the first restaurant, the menu and the type of marketing communication that will suit his target market.

How will Mr Reeds segment his market? Please support your answers with examples related to the scenario provided. ​​​​​​​  (8 marks)

Answer 1

Ways Mr. Reeds can Segment his Market

Market segmentation refers to the identification of different groups within the target customers so that a business can deliver more valuable services to them. As a result, Mr. Reeds can segment his market for Fantastic Pizza through customer segmentation models such as demographic, psychographic, geographic and behavioral.

In the first place, Mr. Reeds should apply demographic segmentation which is the most powerful and straightforward method of defining target customers. As this model identifies the non-character qualities of customers such as age, it will help in targeting potential customers and delivering relevant services based on young age individuals because the business is located in an area that is filled with students and young professionals.

Second, the business needs to focus on psychographic segmentation so that to capture the interests and personalities of the target audience. Herein, Mr. Reeds should conduct a good research to gather awareness concerning the customers’ lifestyle and develop a more personal level knowledge about them. This knowledge will help the business know how to communicate and handle the younger generation.

Furthermore, Mr. Reeds should consider geographic segmentation as the easiest way of identifying and grouping customers according to their physical location so that to determine the exact and strategic business location. As the business has identified Auckland Park due to the presence of many students, this model will provide an excellent way of reaching local audience and advertising to the market.

Lastly, behavioral segmentation is another way Mr. Reeds can segment the business’s market by focusing on how the target audience acts and interacts with Fantastic Pizza. This segmentation will help in targeting distinct audiences based on returning clients and visitors who will also play a vital role in revising and creating the menu.