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Niche Marketing in the Hospitality Industry

Aug 17, 2007
Welcome to our glorious capitalist society, where every entrepreneur may stay busy at whatever industry they like for as long as they wish to be industrious. Just look at those busy wheels of the marketplace turn, will you! Beautiful to watch it all go round, but when you dive in, you'll notice that you have this little factor against which you must struggle to make your business succeed: competition.

Yes, it is kind of a kill-joy that so many of your customers have the option of taking their business somewhere else. Particularly in the hospitality field, where restaurants, bars, hotels, and casinos are so commonly found everywhere. You can compete directly, trying to outdo your competitors on either price or quality. But when that fails, a possible strategy to consider is going for a niche market.

Here, you specialize in one particular category, and profess to do that one thing well and do it exclusively. The Starbucks coffee franchise is an excellent example: They started out as a small chain of espresso shops in Seattle, Washington. That's it, that's all they're known for: coffee. Although their success has helped them branch out into tea and other drinks, as well as snacks and pastry. So now they're more of a chain of cafes mostly known for their coffee.

It is arguable that Starbucks would not have existed without the college/techie crowd. The chain became the "happening" place for college students and especially technology entrepreneurs, two groups who are known for their enthusiasm about coffee beverages. The decor and atmosphere of the earliest Starbucks stores reflects this very well: a hip, urban, sophisticated atmosphere, where you wouldn't at all be surprised to find a poet scribbling on a legal pad, a programmer or blogger tattering away on a laptop, an artist quietly sketching the crowd, and a couple of old intellectuals playing chess at a corner table, all the while with the alternative music on the speakers providing the subtext.

Bars are a prime candidate for niche specialization. We've all discovered the country/western themed bar, the disco club, the working-class "fern bar", the biker bar, the sailor bar, and the popular sports bar. Bars cater to a wide range of specialties, and there are establishments dedicated to singles, bars exclusively for the members of an alternative lifestyle to meet and mingle, or bars themed for the fans of a particular genre of music. Bars, being for recreational purposes anyway, lend themselves easily to having a theme. You also see bars marketing to an age-based niche, such as establishments themed as "speakeasies" or catering to a jazz-loving crowd. Anything from a 1950's "sock hop" to a 1990's "yuppie safari" can be styled with a bar.

Restaurants are another frequent candidate for niche specialties. Virtually any ethnic variety of food is represented in a restaurant somewhere. But restaurants have many more options for finding their niche than just their national identity on the menu; and so we have truck-stop diners, wine-country bed-and-breakfast inns, swanky upper-crust establishments, sidewalk cafes, family-oriented pizza parlors, and specialties like bakeries and ice-cream shops.

It could be argued that pizza, by itself, is no longer identified with Italian food. The national "Chuck E. Cheese" chain demonstrates that very well. Founded by Atari founder Nolan Bushnell in San Jose California, they knew their target market was suburban families, and so they set up a restaurant not just selling pizza, but arcades, shows, and a wide variety of entertainment aimed mostly at small children. The chain remains today as one of the few reliably family-friendly establishments to offer a viable option for a night out for the whole household. The restaurant is suburban and Americanized; you will find very little references to Italy aside from the menu.

Even hotels and casinos get in on the niche marketing action. Here, the niche marketing is less important, since these establishments are too large to not be aimed at being for everyone. Casinos especially aim for a specific theme to style everything after. A cruise of the Las Vegas strip will reveal casinos themed after an ancient Roman emperor, a Western saloon, an Egyptian pyramid, the city of Paris, the city of Venice, and so on. Many casinos now target fun for the whole family as well, and include everything from movie theaters to full scale amusement parks with rides, live shows, and attractions.

Whatever niche you pick for your own business, you should be able to understand your target audience. Think of it as a system of points. You score one point for your Asian restaurant if your menu is authentic enough that a member of that country could eat there and not know the difference. You score more points if the business is decorated with a theme of the country; for an Asian restaurant Foo dogs, Buddhas, and bamboo and water fountains are all popular touches. You score another point for your Asian theme if you offer chopsticks as an alternative utensil. And so on. Each point you can add to the score card represents one more way you can provide your niche market customer base with an authentic experience.
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Freelance writer for over eleven years.

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