What is the back of the casual dining in the third- and fourth-tier cities?

Full text count: about 3000 words

Expected reading time: 12 minutes

This is the 101st original sharing of Lulu

Text / Wang Lulu (WeChat public number: Lulu dining vernacular, continue to focus on deep catering, sharing the observation and thinking about catering brands and industries from an original perspective.)

In the usual working life, Lulu often communicates with friends and media in the industry, and often talks about the food and beverage market in third- and fourth-tier cities. Today, we look at the problems encountered in casual dining in third- and fourth-tier cities from three different cases and think about them.

First, the case brief

Case number one: In a fourth-tier city in Guangdong, the local famous pizzeria has both local first-class (time) advantages and certain product strength and innovation. Even if the location of the two stores is not ideal, it is very prosperous. several years. However, from 2017 to 2018, the performance has dropped dramatically. Many of the original customers have gone to the newly opened tea shop in the local area. Their response is to change the menu and increase the portion of the drink, but the effect is not great.

Specific situation: The product structure is extremely rich, and the primary and secondary products are not obvious, and they are keen on new product development. The area is 200-300 square meters, with a pendulum, the customer price is lower, and the per capita is more than 30 yuan.

Case 2: A third-tier city in Fujian, the first hand-made American burger shop with the best reputation in the world, although it has not been catering before, but with the love of handmade burgers (good production), it is mainly operated by a store with poor site selection and no basic flow. Local young consumers and foreigners like it. When there is a problem with the business model, there is not much profit every month. I hope to open a new store, but I am not sure.

Specific situation: the location of the store lacks natural flow, the area is 200 flat, of which the kitchen area is large, the customer price is 60-70 yuan, the staff is 6-7 people, the procurement and labor costs are high, and it needs to be promoted regularly.

Case 3: In a fourth-tier city in Shanxi, a matcha dessert shop (the brand itself is OK, this is a franchise store), the product is not bad, choose the best shopping center on the 5th floor (on the same floor as the cinema). The company continued to lose money for half a year, and there are two tea shops on the same floor. Young people who came to watch movies almost went to the tea shop.

Specific situation: sales of matcha flavored ice cream, cakes and other products, customer price 35-40, itself in a mature business district, stable flow area, but the operation is difficult, the effect is still not good after promotion.

Second, the common problem

  • All three are in the third- and fourth-tier cities, all of which belong to casual dining (Western/Japanese). The founding team is young and the target group is mainly young people.
  • The founders are all entering the restaurant across the border. Although the location is not good, the product is good;
  • The former two want to operate in a chain, but they have not studied the business model in depth and do not know how to further develop. The latter one, as a franchise store, operates according to the established mode of the brand, but obviously does not adapt to the local market;
  • For the market changes and changes in the competitive environment, the lack of ability to cope, whether it is to change the menu or promote, the results are limited.

Third, the five points behind

  • Market thinking – find ways to play according to local conditions

Different markets “different” catering environment is different, small markets have the opportunity to generate “large share”; small markets often need to adapt to local conditions.

Someone joked that according to the number of existing food and beverage outlets in the first-tier cities, it is estimated that they will not be able to eat for 100 years. However, in the third- and fourth-tier cities, the population base of the region is not high, and the consumption circle is small and fixed. From the total amount of catering to the distribution of various categories is limited, it is a typical stock market, and can even be said to be a “human market.”

We have seen some local catering brands that have developed quite well in the local area and even opened many stores. In fact, they rely on understanding local needs and gaining local identity and repurchase rates. In the third- and fourth-tier cities, the important thing is not the ability to acquire customers, but the problem of continuing to stay. Studying the buying habits of local consumers and the reasons for buying, and formulating corresponding strategies to improve customer stickiness is much more effective than constantly pulling new ones.

A market, a style of play. With the first-tier cities, it is not always possible to win the market in third-tier cities, and vice versa.

  • Category Thinking – Category Features and Product Structure

Different categories, the order of products sold, the product structure must be different, this issue is the founder must pay attention to.

In the first two cases, it became clear that as time went by, everyone began to slowly ignore what the category they were doing. Just by increasing the number of products and introducing other products that are sold by others, it does not solve the problem. why? Because what is your motivation to consider customers to consume? What is the value that you have, and others are difficult to replace? This often has a lot to do with the chosen category.

Specifically, if you make a pizza store, the first three pages of the menu are all popular with black tea; or the store that makes handmade burgers, the number and reputation of spaghetti, desserts are getting better and better. Next, not only will you get yourself into a bottleneck, but it will also make customers’ perceptions of you more ambiguous, resulting in the loss of customer base. Going back to that key point, in a small market, how to continue to achieve a repurchase is very important.

In the third and fourth tier cities, a moderately rich product line is needed, but it is necessary to clearly define the types of products that they operate, and deal with issues such as primary and secondary products, research and development priorities, product structure, and product quantity.

  • Site selection thinking – single store successfully starts from site selection

The problem of site selection is always a “pit”. In fact, it is not really difficult, but many catering entrepreneurs have insufficient research on this, and there are some errors in cognition.

Some seniors have said that the catering single-store operation, 70% of the unsuccessful look at the site selection, has to say that this is indeed a sharp insight. From the above three cases, there are problems of poor site selection, either on the other side of the initiative line, in a location where there is no natural flow at all, or in an unsatisfactory location in a mature mall.

Then why are there no losses for the first two? Because the former occupies the time bonus of regional category development (the pizza boom period just started, it will be done early, everyone will come to find it); the latter is more difficult, relying on the characteristics of handmade burgers, need to promote flow. The problem with this is that the passenger flow is extremely unstable and the marketing cost is high.

Matcha shop is even more troublesome. It is not ideal for site selection in mature business districts. On the one hand, it is diverted by other brands in the same layer. On the other hand, because the selected floor does not match the floor of the target consumer, it loses. The natural flow that should be.

Don’t consider site selection only from the perspective of cost. Just because it is the first one or two stores, the site selection is your investment in stable flow, and it is also a necessary condition for you to verify your own mode.

  • Pricing thinking – the price determines the threshold of consumption

How to price? Pricing is not entirely determined by the cost side. It is closely related to the customer’s judgment and perception of your mind, the business model you set, and the competitors you choose.

Pricing is a process of choosing a price belt. If it is too high, it will be easy to sing high and low. If it is too low, it will be dragged into the next level of price to compete.

In the first case, pizza is its main item, but the price of the customer is only 30 yuan. There is a problem in this, that is, a Western-style light meal is eaten into the price of the afternoon tea. From this perspective, it is understandable that its customer base is lost to the emerging tea shop. From the customer’s point of view, there are certain comparable categories, comparable customer unit prices, coupled with the “his new and tired” consumer psychology, the power of early adopters has become stronger.

The matcha shop case is even more obvious. In the fourth-tier cities, the customer price is 35-40 yuan, and the business is directly robbed by the tea shop with a price of 15-20. If it is a high-energy brand, it will be highly sought after; but as the imported matcha, it needs to carry out market/brand popularization work. Such pricing has invisibly raised the threshold of consumption, and many young people may not come at all. tried.

Price is an important indicator of its own mode. The price is not good. The ability to influence its own profitability internally affects the customer’s judgment on you and adds other competitors with the same price band.

  • Business model – it can be chained

Is the business model important for catering? Lulu feels very important. In the past two days, there was a catering person who sent a message asking for a store with a good product. Why is the business bad? In fact, catering has more than one key item of food, and the business model is very important.

In the previous four points, we talked about the market, category, location, and pricing, all of which belong to the business model. In general terms, that is: what market do you cook in, what target group, based on what category, What product structure, SKU quantity, customer unit price to sell, what logic to choose the site, how big the store, how to continue to get customers, why consumers come… If these key issues are not answered, and there is no clear and visible business clue, profit can only be seen in luck, and luck can hardly be mastered.

In the hearts of many food and beverage entrepreneurs in the third- and fourth-tier cities, there is no business model. The purpose of entrepreneurship is to open a store. If you are lucky, you will open several stores. This way of thinking is the problem.

A clear business model is responsible for all inputs, and it is also a solid foundation for development. The development of catering is inseparable from the establishment of an effective business model and continuous optimization.

Conclusion:

Lulu has always believed that the catering market in the third- and fourth-tier cities needs to be treated differently from the market in the first-tier cities. They do not lack the catering brands with good categories and strong products. The lack of thinking is based on the nature of catering.

— Lulu original author, reproduced, please indicate the source —