Market Segmentation / Field Trip

In the news, in the news, what's not in the news? An article in the New York Times about the home cooking of immigrants in NYC, led me to talk about a taxi stand on Houston and A, which has the most amazing Punjabi Indian food, made by women in saris at home and brought in to feed all the single taxi drivers. And of course, the 10 for $2 dumpling joints in Chinatown.

Chefs yanking peanut-based desserts off their menus underlined the ongoing drama of the safety of our food supply. Details emerging point not just to one freak incident but a much larger underlying problem. It seems these factories down South have few standards and fewer methods of oversight. Raw peanuts stored next to finished peanut product, minimum wage disgruntled employees wearing uniforms outside of plants, leaky roofs full of bird poop, and on and on. In 2004, a whistle blower informed the FDA that ConAgra found salmonella in their peanut butter and...nothing happened. Three years later, 100 or so people got sick and the FDA took action...and ConAgra refused to release their test results because they were deemed 'proprietary' and 'trade secrets'. WTF? The FDA didn't have power to make them release them or make their own tests! Thank you, George Bush.


In the Post, a stack of restaurants got busted for tacking on gratuity to the bill without properly informing customers. I was surprised to find the River Cafe on there, as it's a pretty well-known, supposedly legit spot. Part of this trend is because many tourists come from places where they don't tip....which is the way it should be here. Pay your own damn staff, you cheap f@ck owners!

The next part of the class was about market segmentation. Any population can be broken down to its target market. The ultimate unsegmented market is the entire world, but to develop a product that appeals to every single person the world is a bit unreasonable. A restaurant will probably not serve the entire population of the world, no matter how much they'd like to. A restaurant's market segment first and foremost is determined by a limited geographic segment. Richard broke it down thusly:

• Geographic Variables: How far will someone travel for it? One will travel farther for an internationally-know 4-star restaurant than a neighborhood diner. Additionally, what is the source of the people in the geographic segment? Residents? Office workers? Tourists?
• Demographic Variables: Age, class, income, family size, education, occupation, ethnicity -- all hard census facts that help define the aspects of potential segments.
• Psychographic Variables: "Lifestyle". Made from bald stereotypes, like 'yuppies' and 'dinks' (dual income, no kids). This is where those silly books about 'Gen X' and 'Gen Y' come in.
• Behavioral Variables: What triggers a buy? How much is a segment likely to spend?
• Benefit Variables: What benefits are people looking for in your product? Value, experience, atmosphere, etc.
  

What makes for a good market segment? Three things: first is sustainability -- there has to be enough of a market to make it worth while. Measurability -- the market has to be quantifiable. And Accessibility -- how to communicate with the market.

The second half of the class was a field trip to Daniel, a four-star French restaurant on the Upper East Side that is the flagship of celebrity chef Daniel Boulud. We were guided through the restaurant by the very Fraaaanch assistant general manager, from the beautifully appointed dining room to the spacious main kitchen. There is a skybox hovering over the front of the main kitchen, where for $1000, you and three friends can have a private 8-course tasting menu while watching the scrum below. The REAL scrum, of course, is in the basement, where a series of rabbit-warrens are linked together to create a massive series of prep rooms, storage, and cooking spaces. It was clean, but the low ceilings, the crowded crevices, and total lack of natural light would drive a normal person mad, especially if you were doing 12-hour shifts 6 days a week. Lesson learned: I don't have much interest in eating this kind of food, much less working to make it.