Customer Segments in the Restaurant Business Globally

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DR. BABASAHEB AMBEDKAR MARTHWADA

UNIVERSITY, AURANGABAD.

Dr. Rafiq Zakaria Campus

Maulana Azad College of Arts, Science & Commerce

Rauza Bagh, Aurangabad.

A Project Report on

Customer Segments in the Restaurant Business Globally

In the Partial Fulfillment of Bachelor of Business Administration

(VIth

Semester)

20082009

Submitted by

Aarthi Ramani

Abhay Bishnoi

Sanyam Saigal

Guided by

Prof. I. M. Farooqui


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CERTIFICATE

This is to certify that Mr. Sanyam Saigal, a Year III student of Bachelor of Business

Administration, Maulana Azad College, Aurangabad, affiliated to Dr. Babasaheb Ambedkar

Marathwada University has completed successfully all the project work during the year 2008-

2009.

Project Guide: Principal:

Mr. I.M. Farooqui Dr. Maqdoom Farooqui


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ACKNOWLEDGEMENTS

Firstly, I would like to thank the Principal of Maulana Azad College, Dr. Maqdoom Farooqui,

for giving us the opportunity of working this project.

Special thanks to our BBA Co-ordinator and Project Guide, Mr. I.M. Farooqui for all his

advice and assistance throughout the course of the project.

I would also like to thank the Head of Department of Commerce and Management Science,

Dr. S.A. Mannan for his valuable inputs.


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DECLARATION

I hereby declare that the project is the result of our own collective efforts that it confirms to

the university, department and course regulations regarding cheating and plagiarism. No

material within this project has been used in any other submission, by the researchers, for an

academic award.

Sanyam Saigal


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INDEX

CHAPTER ONE: ISSUE IDENTIFICATION ..................................................................... 7

1.1INTRODUCTION............................................................................................................ 7

1.3STRUCTURE .................................................................................................................. 81.4SCOPEANDLIMITATIONS ......................................................................................... 8

CHAPTER TWO: LITERATURE REVIEW....................................................................... 9

2.1ORIGINOFTHERESTAURANTBUSINESS .............................................................. 9

2.2GROWTHOFTHEFOODSERVICEINDUSTRY...................................................... 10

2.3DININGPATTERNSDURINGTHEWAR ................................................................. 10

2.4DININGOUTDURINGTHE1960S ............................................................................. 12

2.5DININGOUTINTHE1970S ........................................................................................ 12

2.6DININGINTHE1980S ................................................................................................. 13

2.7FASTFOOD .................................................................................................................. 14

2.9THEORYBEHINDMARKETSEGMENTATION ...................................................... 152.10DEFINITION ............................................................................................................... 16

2.11MARKETSEGMENTSINTHERESTAURANTBUSINESS .................................. 16

2.12RESTAURANTMARKETANALYSIS ..................................................................... 17

2.13RESTAURANTGROWTHINDEX ............................................................................ 19

2.15LOUNGESPASTANDPRESENT .......................................................................... 20

CHAPTER THREE: RESEARCH METHODOLOGY .................................................... 23

3.1INTRODUCTION.......................................................................................................... 23

3.2AIMOFRESEARCH .................................................................................................... 23

3.4.1 QUESTIONNAIRE 1 -- FOR MANAGERS ............................................................. 25

3.6DATAANALYSIS ........................................................................................................ 31

3.7CONCLUSION .............................................................................................................. 31

CHAPTER FOUR: ANALYSIS AND INTERPRETATION ............................................ 32

4.1INTRODUCTION.......................................................................................................... 32

4.2QUESTIONNAIREANALYSIS ................................................................................... 32

4.2.1 QUESTIONNAIRE ONEFOR MANAGERS ....................................................... 32

4.2.2 QUESTIONNAIRE TWOFOR MARKET SEGMENTS ....................................... 40

CHAPTER FIVE: CONCLUSION AND RECOMMENDATIONS ................................ 51

5.1INFERENCE .................................................................................................................. 51

BIBLIOGRAPHY .................................................................................................................. 55


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LIST OF GRAPHS

FIGURE 3.1: KIND OF FOOD AND BEVERAGE OUTLET ..................................................... 32FIGURE 3.2: LENGTH OF BUSINESS ....................................................................................... 33FIGURE 3.3: HOURS OF OPERATION ...................................................................................... 34FIGURE 3.4: PROFILE OF CUSTOMERS .................................................................................. 35

FIGURE 3.5: ORDER IN IMPORTANCE TO ATTRACT CUSTOMERS ................................. 36FIGURE 3.6: LOUNGE CONCEPT IN INDIA ............................................................................ 37FIGURE 3.7: CLIENTELE BASED ON ECONOMIC STATUS ................................................ 38FIGURE 3.8: PURPOSE OF CUSTOMERS TO COME TO LOUNGES .................................... 39FIGURE 3.9: AGE GROUP .......................................................................................................... 40FIGURE 3.10: MONTHLY HOUSEHOLD INCOME ................................................................. 41FIGURE 3.11: FREQUENCY OF DINING OUT ......................................................................... 42FIGURE 3.12: FREQUENCY OF VISITING A LOUNGE ......................................................... 43FIGURE 3.13: PREFERENCE OF PLACE TO EAT OUT .......................................................... 44FIGURE 3.14: NORMALLY DINE OUT WITH ......................................................................... 45FIGURE 3.15: AVERAGE SPENDING POWER ........................................................................ 46FIGURE 3.16: ORDER OF IMPORTANCE WHEN YOU GO TO DINE OUT ......................... 47FIGURE 3.17: OPINION OF LOUNGE CONCEPT IN INDIA .................................................. 48FIGURE 3.18: PURPOSE OF VISIT TO A LOUNGE ................................................................. 49FIGURE 3.19: TYPE OF CUSTOMERS FOR LOUNGES .......................................................... 50


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CHAPTER ONE: ISSUE IDENTIFICATION

1.1 INTRODUCTION

The first thought that crosses the mind when you think of a lounge is a picture of a warm,

cosy room, low-seating arrangements, dim lighting and soft music playing in the background.

Lounges earlier meant as a place to relax after a hard days work have now modernized into

casual and semi-formal places where people of various market segments come to meet,

interact and socialize. Originally, lounges catered to the needs of people to sit down, have a

drink, and have quick conversations and then return home. But now the look of most loungeshas been completely revamped. They now cater to the guests needs as well as desires.

Lounges have come a long way since their introduction in 1950. From taverns, bars and

casual dining restaurants has emerged the concept of lounges. It is a mix between a bar where

people go to enjoy alcohol in a casual manner, a nightclub where people enjoy loud, blaring

music to which they can dance all night, and a restaurant where people enjoy a good meal.

Lounges combine the goodness of all the above to provide a casual, comfy atmosphere where

people can come and relax, mingle with others and have a good time.

Lounges attract a range of market segments from teenagers to middle-aged people, from

middle-class to upper-class and from leisure to corporate clients. The markets attracted

towards lounges in the past have usually included college students, folks in their mid-

twenties, transient guests, etc. Of late lounges have begun to target the niche market of

corporate clients, at the same time retaining their earlier markets. With the advent of new

trends in lounges there has been an evident shift in the market segments catered to by

lounges.

In recent years several new trends have emerged in the concept of lounges across the globe.

These have emerged as a result of guests demands for more than just the ordinary.

Theme-based lounges, beverage-oriented lounges, etc catering to the up-market crowds have

become the talk of the industry. They specialize in providing a memorable experience for

their guests and a desire to come back for more.


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1.2 ISSUE IDENTIFICATION

In this project, the researchers aim at depicting the evolution of lounges, the new trends that

have developed in the recent times and understanding the preferential shift in marketsegments that are targeted by lounges in the recent years.

1.3 STRUCTURE

The following chapters deal with the main content of the research. Chapter 2, the Literature

Review, deals with past research work related to the restaurant business and its evolution into

the lounge concept across the globe. It focuses on the different conceptual lounges and the

preferences of markets that visit them. Its content provides information on the different

surveys carried out by researchers in the recent past all over the world. This helps give the

readers a brief idea about the topic of research and purpose of the research.

Aim: To investigate and study the newer market segments being identified in the lounge

concept over the past 5 years, and the reasons for their formation.

Objectives:

1. To study the concept of lounges and their various trends.2. To study the different market segments targeted by various food and beverage outlets.3. To study the new market segments that lounges are emphasizing on over the past five

years.

1.4 SCOPE AND LIMITATIONS

1. The study is restricted to Lounges as a Food and Beverage outlet.

2. The authors have targeted Lounges in the Mumbai-Pune sector and formed theirconclusion based on their research on this sector.

3. The authors have limited themselves to their sample size and questionnaire.


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CHAPTER TWO: LITERATURE REVIEW

Even though restaurants came up in the eighteenth century, they are mostly considered as

products of the nineteenth century. One important development of the time was the

distinction of two types of service; fixed price and from the menu.

It is ironic to note that food is rarely the reason for people to go to restaurants. Some people

may celebrate anniversaries, where others may have business meetings. In France today only

the closest friends are ever invited home. Food service operations are continuing to enjoy

tremendous improvement and development together with considerable advances in quality.

The demand for food and beverages away from the home has increased and, with a broader

spectrum of the population eating out, customer needs have diversified. Food and restaurant

styles are also diversifying to meet the challenges of the demands being made by increasingly

knowledgeable and value conscious customers. Menu and beverage list contents are also

continually being influenced by trends, fads and fashion, the relationship between health and

eating, special diets, cultural and religious influences, the advance of vegetarianism, and

customer acceptance, or otherwise, of irradiation and genetically modified foods.

(Lilycrap and Cousins, 2006)

2.1 ORIGIN OF THE RESTAURANT BUSINESS

Two businesses currently in operation often make claims to be the oldest restaurants in Paris.

These are the Tour d'Argent, housed in a sixteenth-century inn, and the Caf Procope, a

famous meeting place for eighteenth-century intellectuals. Other old restaurants still in

operation include the Vfour in the Palais Royal (converted from caf to restaurant in 1817)

and LeDoyen's on the Champs Elyses.

The British ruled North America also had taverns and boarding houses, but no restaurants.

Coffee houses and oyster houses began appearing in the late eighteenth century, but the word

"restaurant" was not commonly used until the 1830s or 1840s. Delmonico's, which opened in

Manhattan in 1831 and occupied several different locations, is often considered as the first

American restaurant but this is not known for sure. Delmonico's became a model throughout

the nineteenth century.


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In India, most cooking methods are from the north-western region of Punjab. This may be

because the 1947 partition caused many Punjabis to migrate to Delhi and other cities where

they started running food stalls. When colleges to improve tourism were started in the 1960s,

they called for instructors from Punjabi families.

(Source: http://www.answers.com/topic/restaurant)

2.2 GROWTH OF THE FOOD SERVICE INDUSTRY

Trends in food consumption have provided a recurring focus for sociologists and other

commentators interested in issues such as family constitution, changing trends in nutritionand food marketing. Until relatively recently, serious academic analyses of this kind have

focused primarily on food consumption in the private individual and domestic contexts.

There is, however, a growing interest in the sociology of food consumption in the public

domainin dining out. (Wood, 1992)

2.3 DINING PATTERNS DURING THE WAR

Many studies were conducted in Britain to study trends of dining out. These helped in

identifying the factors that increase percent of diners. It provided an overview of long term

trends in order to place the experience of dining out in perspective. The Second World War is

a good place to start tracing dining trends.

It was only after that time that eating-out became democratic and was made available to the

masses of the British people.


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People then realized that not only was this industry a good revenue earner but also worked in

the benefit of workers, children, and the poor. Public dining then started gaining popularity.

People gained knowledge and started discriminating in their selection of food.

Since then, dining out became sophisticated. Drinking practices changed. Beer become crude

and became less important; whereas, wine-drinking grew dramatically. The choice for diners

became supreme. The caterers main test was to lure people out of their homes to enjoy the

various pleasures of dining-out. They knew that the market years later too will not be

saturated; growth will always be there for those who could strike a balance between quality

and value. An increase of 32 thousand catering establishments was seen from the year 1941

to 1946. This led to the increase of meals served from 79 million per week to 157 million per

week. Eating out before and during the war was controlled by constraints on food supplies

and meal prices. After the Second World War, rationing was started by the law. This placed

restriction on how much people could eat. Almost 15 years later this law was changed, giving

food service establishments and the consumers an opportunity to explore this industry to its

full expanse.

After the war and the seriousness of the war, people started modernizing their tastes in dining

out, leading to the immense growth of the hospitality industry. A moderately unified

marketplace was opened for various external and internal culinary influences. A number of

factors lead to this development, like

1. the increased exposure of much of the people to foreign foods as a result of theincrease in overseas holiday taking,

2. the involvement of members of ethnic minorities in the restaurant trade with astimulus of demand for the cuisines they offer,

3. increases in disposable income,4. A general willingness on the part of consumers to experiment with food and eating.

(Wood, 1994)


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2.4 DINING OUT DURING THE 1960s

The origin of radicalism could be found in the 1960s. In the 1960s this growth continued.

People spent their growing incomes on meals away from their homes and holidays abroad.

Again from 1960 to 1968, expenditure by caterers increased.

Statistics say that from 1953 to 1975, expenditure on food as a proportion of income fell from

one third to one fifth, a sign that incomes were growing and there was a change in spending

priorities. According to an inquiry conducted by the national catering inquiry, in 1965, the

most dominating factor in dining out was associated with work. Nationally, four people out of

ten ate a meal at work every weekday, either in the staff canteen or nearby restaurants. A

quarter was found to eat out privately at least once a week and a quarter did so at least once a

month. The rest ate out lesser on private occasions.

2.5 DINING OUT IN THE 1970s

In April 1974 a project on dining-out was commissioned by the Hotels and CateringEconomic Development Committee. Its aim was to define the profile of the British diner and

to reveal patterns of behaviour and spending on eating-out. The survey, Trends in Catering,

showed that 44.3 million Britons aged 11 or over consumed an average of 89 million meals a

week away from home; this amounted to over 4,600 million meals a year in 1975; close to

two meals a week for the average Briton. Expenditure on meals, excluding alcohol, amounted

to over 2,000 million. This was close to 4 per cent of total consumer expenditure. With the

inclusion of drink and tobacco sales, the total expenditure on catering services in 1975 was

around 5.5 billion - or 11 per cent of total consumer expenditure. (OConnor, 1993)

In the years that followed expenditures grew a substantial 7 billion. It was seen that the

amount spent by the public on meals rose at a faster rate than that of alcoholic drink. The

survey then conducted showed variations by social class in the number of times they dined

out and the amount they would normally spend. The study also shows a distinction in the

gender of those who dined out. Males between an age group of 25 and 64 spent close to half

of the total percent, whereas women spent only 35 percent. From this it can be said that the

highest spenders were these males between the age group of 25 and 45, also their female


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counterparts spent and dined out only half as much as them. Meals without alcohol cost less

than 1.

Meals which were taken at work contributed to only 20 percent of the total and were found

to be relatively inexpensive. Restaurants, cafes and pubs took two-thirds of expenditure on

food (OConnor, 1993). Restaurants thrive on the people who want to dine out. Factors which

affect people affect restaurant business. Growth of restaurants and such concepts is affected

by various factors.

2.6 DINING IN THE 1980s

By the early 1980s, the British had increased the number of meals eaten outside the home to a

little over three meals a week. The highest income group was consuming five meals out per

week with the lowest averaging two meals per week (National Food Survey).

(OConnor, 1993)

The survey conductors used certain factors as their main determinants to frequency of dining

out. They can be summarized as

Income Age Geographical region and population density in the area of residence.

The Family Expenditure Survey of 1982 shows that the average that households spend on

meals was 4 to 25, but this varied from 1 to 13 according to the income. People spent 15

percent of what they earned on meals. The expenditure on the catering industry slipped a little

at this time owing to the 19811982 recessions. However, the overall expenditure stayed at

the same level. After the passing of the recession, the expenditure on the industry boomed

and reached new high levels. Towards the beginning of the next decade, the average spend

rose to 20 percent in households, according to the Family Expenditure Survey.


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The above rise and decline of spend on the catering industry shows that there was a change in

spending priorities.

Alcohol preferences also changed drastically in this period. The growing sophistication of

dining out made the spending on alcohol move down in families spending priorities. Within

alcohols, wine spending almost doubled and beer spending declined.

There was a remarkable boom in catering during the 1980s and the consumer benefited from

a very wide variety of restaurant types, from theme restaurants through country house dining

to the rapidly expanding pizza outlets. Throughout the 1980s the commercial sector of the

industry grew rapidly, while staff catering and institutional provision declined in importance

as meal providers - a reflection of an affluent decade. (OConnor, 1993)

2.7 FAST FOOD

Other phenomenons that caused considerable changes in the restaurant industry are the

opening of chain restaurants serving fast food. One of the best examples for this is

McDonalds. Brothers Dick and Mac McDonald opened their first McDonalds in 1940

where they served mostly barbeque. The brothers then noticed that most of their profits camefrom hamburgers. Then they shut down their restaurant for several months in order to put an

assembly line to produce just milkshakes, hamburgers and fries. They started franchising in

1958. Forty years later and over 2500 McDonald restaurants and franchisees later the first

Indian Mc Donalds was opened.

(Source: http://en.wikipedia.org/wiki/Mcdonalds)

The growth of pubs as a location for dining out reflects an attempt to appeal to wider markets,

in particular women and the general family market though, to a very great extent, pubs are

still strongly male preserves. The significance of catering as an adjunct to other forms of

leisure activity cannot be ignored. The 8.9 per cent of meals served in the clubs, leisure and

entertainment sector is small but it is unclear as to what element of the takeaway market is an

adjunct of other forms of activity for example, shopping, returning from some form of

leisure pursuit (e.g. the cinema) or hiring a video (Wood, 1992).


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2.8 RESTAURANTS AND MARKET SEGMENTATION

Experts in the restaurant industry look at some things in order to segment their markets. From

the earlier years statistics the check covers per meal period, average per cover, turn around,menu price increases, raw ingredient fluctuations and wait staff productivity. They analyse

this data to forecast the upcoming year. They also take into consideration, old competitors

and new entries into the market.

They make budgets and plan depending on their profit targets and competitive pressures.

After all figures are obtained they are summarized by week, month, and quarter becoming the

focus of the budget (Dunbar, 2006)

2.9 THEORY BEHIND MARKET SEGMENTATION

The theory underlying market segmentation is simple. People with different characteristics

may want the same product in somewhat different forms and for different reasons. Therefore,

marketers divide people into groups based on certain relevant characteristics, and then adjust

elements of their marketing mix to meet the specific needs of each group. (Marketing

Segmentation Basicsconsumer market segmentation basics)

In todays market place managers are constantly seeking to find the best ways to reach and

serve their customers. Market segmentation, dividing the market into submarkets, and

branding products and services plays a major part in marketing activities. On a national scale,

there are many different types of consumers, who need to be treated differently. Market

segmentation plays a major part in marketing, as all marketing activities depend on precisely

defined and carefully chosen market segments.

Market segmentation is the process of naming and then segmenting broad product markets to

find potentially attractive target markets. Segmentation is the process of partitioning markets

into groups of potential customers with similar needs and/or characteristics who are likely to

exhibit similar purchase behaviour. It has emerged as a key marketing planning tool and the

foundation for effective strategy formulation in many companies. The objective of


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segmentation research is to analyze markets, find niche opportunities, and capitalize on a

superior competitive position.

This can be accomplished by selecting one or more groups of users as targets for marketing

activity and developing unique marketing programs to reach these prime prospects (market

segments).

2.10 DEFINITION

Segmentation means splitting a population down into sub -groups or segments whose

members show similar characteristics, needs and buying behaviour. There are four classic

ways in which markets are segmented. 1. Geographical, in other words, categorizing people

on the basis of their geographical characteristics, for example, where they live. 2.

Demographics, which means dividing the population into groups on the basis of their

demographic characteristics such as age, sex or race. 3. Psychographic, which differentiates

people on the basis of their attitudes and opinions, for example. 4. Behaviouristic, this puts

people into groups in terms of their relationship with particular types of products, for

example, whether or not they are first time users, or the benefits they seek from using a

particular product. (Burkard)

2.11 MARKET SEGMENTS IN THE RESTAURANT BUSINESS

Recent studies suggest that one out of every two and a half meal is eaten out. (Hume, 1992).

Market segmentation is an important strategy in the restaurant industry, just as it is for most

products and services. Segmentation can be used to obtain a competitive advantage in a

marketplace with many service providers. The key elements used to segment markets are:

Demographic Geographic Psychographic Behavioural Benefits sought


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2.12 RESTAURANT MARKET ANALYSIS

In order to develop a business plan, for a current business an achievability study must be

conducted. This requires analysis of the existing market conditions. Every area has an impact

on the profitability of your restaurant. The potency of the local market will not only affect the

number of customers that get served but also the amount you charge them for their meal.

Many guidebooks help in analysing the market so one can predict the potential of the

operation and make smarter operating and investing decisions. They provide checklists to

help collect and analyse information as part of a restaurant market analysis. These checklists

are specially made for the restaurant industry and provide act as a learning tool to understand

as many factors that will influence your operation and profitability. Most of the market

segmentation research in the restaurant industry is based on the identification of determinant

attributes and their use in selecting a restaurant. The market is segmented based on the

importance of the selection criteria among various groups of people.

Knowing what the customers want and what makes them come back is important for the

restaurant sector. One way to find out is to ask the customer. The high rate of failure in the

foodservice industry hints that management may want to seek those factors that are

responsible for repeat business from a particular customer and, thus improves business and

profits. Different customers have different reasons to want to return to any outlet. They look

for some major aspects like quality, value and desirable environment. In the modern day

marketplace giving a customer just good service and a good meal does not seem to satisfy

them. Most restaurant businesses have recognized this, and are trying to offer their market

good service and good food in a favourable environment.

If one considers the following restaurant factors while determining the return patterns of

customers: food taste, consistent food, variety in menu, waiting time, personality of server,

and atmosphere. Another factor taken into account can be guest profiling i.e. the leisure and

business sector. The results showed that food quality was rated far above all other attributes

in terms of importance whereas; the others were given lower ratings. This can help a food

service operation concentrate on those attributes of a restaurant that make the customers

come back.


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However, Kivela (1997) used the determinant attribute analysis technique to segment the

market for restaurants in Hong Kong. The conclusion was that the choice variables differ

depending upon the type of restaurant and usage situation. Hence, while food type and food

quality appear to be the most important variables for restaurant selection, ambience or

atmosphere, prestige, location, and cost of food, is nevertheless critical in the final selection

or rejection process. In addition, ambience, comfort level, and prestige are also differentiated

by a combination of the age, occasion, and income segment.

There are several studies that focus on the age of customers, and often on the specific needs

of the mature market, or seniors. Other researchers have looked at attributes used by

customers to choose restaurants and identified three segments in the process:

(1) Students

(2) Well-to-do middle-aged people

(3) Older people

On examining customers on the basis of age, tourists or non-residents, purpose, benefits

sought some major distinction in the customers can be observed. Other researches also

include those which analyses different physiological and psychological challenges faced by

customers such as price sensitivity. The segments were defined as:

1. Value seekers;2. Service seekers;3. Adventurous-food seekers;4. Atmosphere seekers; and5. Health - Food seekers.

A study by Wood R. and Clark M. (1998) suggested that food quality and food variety were

key determinants that called for consumer loyalty in the restaurant industry. Tangible rather

than intangible factors were identified as being of greater importance in consumer loyalty.

The five main factors that qualified for determining consumer loyalty were:


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1. Range of food24.69%.2. Quality of food23.45%3. Price of food17.28%4. Atmosphere17.28%5. Speed of service17.28%

It is clear from the previous studies on market segmentation in the restaurant industry that it

is preferable to use more than one type of segmentation variable. Demographics can be used

to segment people into basic groups, but these groups can often be segmented further usingbenefits sought, lifestyles, and/or dining behaviours. In particular, the use of determinant

attributes has proven to be a successful method. Conjoint analysis has emerged as a

contemporary research technique to reveal consumers' preference towards choosing a

particular restaurant. It is possible to segment the restaurant market by different meal

purposes (i.e. family meal, business meal and tourists) and employee groups (i.e. service

sector, hotels and floating restaurants). Combining other research techniques such as cluster

analysis, multi-dimensional scaling, and the application of using conjoint analysis offersextremely interesting academic as well as business research opportunities.

2.13 RESTAURANT GROWTH INDEX

The restaurant growth index helps in identifying the growth of the restaurant industry in a

particular location. The best way to use this restaurant growth index is to look at the ranking

and size of the market and then decide which metro area represent maximum amount of

opportunities for what you need or what you are able to offer. These numbers are .worked

out looking at how much money people spend at restaurants as a percentage of their income;

then that is compared to the national averages.


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2.14 DEFINITION OF LOUNGES

Lounges for the authors study can be defined as a food and beverage outlet which is a

combination of a restaurant and a bar. They are largely concept or themes based and are

recent stages in the evolution of the casual dining experience.

A section of the restaurant industry that has been left out of studies is the study of market

segments in the lounge concept a concept very new to India. Thus, the authors wish to

research this topic.

2.15 LOUNGESPAST AND PRESENT

As traditionally seen most people visit lounges in order to relax. This puts them under the

category of leisure guests. They come with no particular aim except in order to enjoy the

food, beverages, ambience and service. They generally do not come individually; as people

come in order to be with friends. Leisure travellers rarely travel alone. The concept of lounge

also implies that people come to spend long hours. This means that the lounge management

probably cannot turnover the outlet more than twice to a maximum during one meal. Thus,

lounge owners price takes this factor in consideration.

In their eternal quest to differentiate themselves from hotels, conference centres are stepping

up their offerings of "casual meeting environments." It's a broad term, but it boils down to

this: Groups that meet at conference centres want a feeling of comfort and are less likely to

request a traditional setup. The trend encompasses everything from meeting in a lounge, to

placing couches in meeting rooms, to the ultimate in casual: a patch of grass. (Kats, 2002).

The market serving this leisure market segment of customers can thus price their products

accordingly, as they can maximize their profits by charging higher rates as these guests are

fairly price insensitive.


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Generational market segmentation classifies the visitors of lounges on the basis of their age

and designation, e.g. Student, working professionals, etc. Students and youngsters have taken

over the lounge scene since the turn of the millennium. Lounges today are accepted as a

phenomenon mostly visited by youngsters; viz., youth of the age group between 18 and 25.

This concept also has to take into consideration the type of the lounge. In lounges serving

alcoholic beverages the minimum age limit for entrance is normally set by the government. In

India, it is 21 years or over, whereas in the United States of America and in other European

countries it is 18 years and over. Most college going adolescents go to lounges in order to

spend time with friends after college. Working professionals who have been at work for the

day prefer to visit lounges after work for a drink in order to relax and spend time with friends.

They might come in the age group of 2230.

Other people in this group are working adults. They also entertain guests at lounges.

However, due to the development of lounges into night clubs and discotheques has drastically

reduced this market segment in the lounge concept. However, this group has always been a

crucial part of lounge clientele. They might fall in the wide age group of say 30 to 50. Older

ladies and gentlemen in their 50s and above also do visit lounges, bars, and other similar

concepts. Earlier lounges were a concept normally accepted as a place for people with lots of

money and respect. However, this changed around the early 90s because of the shift to teen

crowds.

Economic status plays an important role in deciding not just who visits a lounge, but how

expensive the lounge is. Upper middle class is a class which has a moderate amount of spend

power. Lately it is the upper middle class people who make up a large amount of the visitors

to lounges. This could be said due to the lounge owners attempts at making the lounge

concept appealing to people with lesser spend power.

Niche markets consist of people of high incomes and social status. Catering to them means

one needs to have specialized services. More chic segments have been an integral part of the

lounges found in expensive outlets and locations such as 5 star hotels, or up town areas.

These people have money to spend in expensive places where they can sit, converse and relax

for hours.


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Other market segments that are seen in the hospitality industry have been adopted into the

lounge concept. Single lady guests are a popular market segment that has more recently been

getting a lot of importance in hotels. This is out of realization that not only do women talk

very extremely about their experiences, but also that they give high incomes from ancillary

sources. Single ladies are given a lot of importance at lounges as well. In most bars, night

clubs as well as lounges, Wednesday night is considered as ladies night. Ladies do not have

to pay any admission fee on this day, and often get free drinks and food in order to pamper

them. Senior citizens are not conventionally thought of as the market segment in lounges or

bars. However, little do people realize that at one point of time these lounges were

popularised by the very same seniors who used to enjoy having a long conversation over a

few drinks.

Children are mostly considered as a new segment. Not only do bars and lounges have age

limits but lounges and bars are not looked at as places for children. However, recently lounge

and bar management has realized that a lot of them were losing out on their market due to

children who ended up as restrictions on their parents. Thus, lounges today have places for

children to play while their parents can enjoy a few drinks. A few lounges, have started

allowing children in. These concepts thus serve no liquor but may specialize in something fro

the children like chocolate or cereal. Travellers can be a large income for lounges. Normally

they come with time and money to spend. They enjoy other cultures and entertainment and

they tend to socialize with the people around them, thus becoming a large portion of the

market segment for lounges and bars. Local and residents of the area make up another market

segment.

They are sometimes regulars and increase business through word - ofmouth. They bring in

group business and events such as birthdays anniversaries and other celebrations. Sports

enthusiasts help maximize business during sports seasons. For e.g. Lounges and bars are

normally packed on days of the football or cricket world cups. Other bars and lounges are

dedicated to sports. This makes their decor and ambience sporty with equipment posters and

paintings. Many famous sports stars also visit these bars and lounges for publicity.


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CHAPTER THREE: RESEARCH METHODOLOGY

3.1 INTRODUCTION

A research is a process of investigation carried out on statistical data to derive certain

hypothecated facts. Research methodology gives an outline of the path used by the

researchers to reach their aim and objectives.

This chapter aims at looking at the rational for the selection of the topic of research, the trail

followed by the researchers for the method of data collection and to scrutinize the data so as

to disembark on logical solutions.

3.2 AIM OF RESEARCH

The lounge concept is an upcoming trend in the Food and Beverage industry. In recent times

different market segments have been attracted to this new form of semi-casual dining outlets.

Although lounges have been around since 1970 they have gained popularity in the last few

years. Initially the target audience of lounges was at two extremes: the young college crowd

and the up-class, high society market segment. Now their focus has shifted to the middle-

aged, mid-class markets. These include the working class, within the age group of 30-50 yrs.

This preferential shift has been caused due to various factors discussed earlier. The aim of the

research is to show how this preferential shift has taken place in the Indian market scenario.

The researchers have used the analytical method for investigating the topic of research. In

this method, the researchers establish aims and objectives which they attempt to achieve

through critical analysis.


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3.3 METHOD OF COLLECTION

The method used to collect data is questionnaires, customized to suit the target audience.

They are used as tools to collect facts and figures from the managers as well as markets of

food & beverage outlets as well as the market segments that visit these outlets.

The method of using questionnaires allows the researchers to ask simple straight-forward

questions pertaining to their research. The researchers have kept the questionnaires short and

easy-to-understand so that there is no difficulty in data collection.

Two questionnaires were made: one for managers and the other for the market segments. The

questions are multiple-choice so as to make it less time-consuming and simple for the

respondent to answer, thereby allowing only the relevant information to be collected and

analyzed.

The research methodology of using questionnaires is an effective tool for this project as it

helps the researchers to prove their aim with actual data derived straight from the market

segments and the managers.


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3.4 RATIONALIZING THE QUESTIONS

Two questionnaires have been used for the analysis. The rationale behind selecting every

question has been explained below:

3.4.1 QUESTIONNAIRE 1 -- FOR MANAGERS

1. What kind of Food & Beverage outlet do you run?

o Fine-diningo Casual-diningo Fast food/Takeawayo Bar/Lounge

Rationale: -To find out what type of Food & Beverage service the respondents outlet falls

under.

2. How long have you been in this business?

o Less than 1 yearo 1-2 yearso 2-5 yearso Over 5 years

Rationale: - To get a long term market scenario from well-experienced managers who have

been in the business for awhile.

3. What are your hours for business? (Mark where applicable)

o Breakfasto Luncho Dinnero 24 hrs service

Rationale: - To evaluate which are the busiest working hours for the respondents food

outlet.


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4. What is the profile of your customers? (Mark where applicable)

o Business clientso Touristso Familieso Young people (age group18-30 yrs)

Rationale: -To determine the market segments that are attracted to the respondents food &

beverage outlet.

5. Rank the following in order of importance to attract customers.

o Quality of food ( )o Quality of service ( )o Entertainment ( )o Ambience ( )o Price ( )

Rationale: - To determine what attributes are most important to attract the guest towards

dining at a particular food & beverage outlet.

6. What is your opinion about the Lounge concept in India?

o Popular with a rapid growtho Coming up at a slow rateo Remains stagnanto Not so popular

Rationale: - To determine whether the concept of Lounges will work in the Indian economy,

based on the opinion of food & beverage managers.

7. How would you rate your clientele based on economic status?

o Upper class (Income above Rs.1 Lakh)o Upper-middle class (Income between Rs.50,000-1 lakh)o Middle-middle class (Income between Rs.35,000-50,000)o Lower-middle class (Income between Rs.20,000-35,000)o Lower class (Income below Rs. 20,000)

Rationale: - To determine the economic class of the people most frequenting the

respondents category of food & beverage outlet.


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8. What is the purpose of customers to come to Lounges?

o Formal/Business meetingso Informal meetingso Special occasionso Casual gatherings (with friends, co-workers, etc.)

Rationale: -To determine the reasons for the guests to socialize and visit the respondents

food & beverage outlet.

9. What market segments are you targeting at present? Why?

Rationale: - To determine the market segments that managers of different food & beverage

outlets are targeting in recent times to improve business.

10. What is your opinion about the future of Lounges in India?

Rationale: - To get a managerial perspective on the Lounge concept in India.


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3.4.2 QUESTIONNAIRE 2 -- FOR MARKET SEGMENTS

1. Which age group do you fall under?o 18-30 yrso 30-50yrso 50-60yrso Above 60yrs

Rationale: - To determine the age group of the sample

.

2. What is your monthly income?o Less than Rs 15,000o Rs. 15,00030,000o Rs.30,00050,000o Rs.50,0001,00,000o Above Rs. 1,00,000

Rationale: - To determine the economic class of the sample.

3. How often do you go out to dine?o 1-2 times a month or lesser.o 2-4 times a montho 4-7 times a montho More than 7 times a month

Rationale: - To determine how often the sample visits different food and beverage outlets.

4. How often do you go to a lounge or a similar concept?o 12 times a month or lessero 24 times a montho 47 times a montho More than 7 times a month

Rationale: - To determine the popularity of the Lounge concept within the sample.


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5. Where do you prefer to go to eat out?o Fine-diningo Casual-diningo Fast-food/Takeawayo Bar/Lounge

Rationale: - To determine the type of food and beverage outlet visited by the sample.

6. Who do you normally go out to dine with?o Business clientso Co-workerso Friendso Family

Rationale: - To determine the nature of people that visit Lounges.

7. How much do you spend per individual?o Rs. 150-300o Rs. 300-600o Rs. 600-750o Above Rs. 750

Reason: - To determine the spend power of a respondent in the sample.

8. Rank the following in order of importance when you go out to dine.o Quality of food ( )o Quality of service ( )o Entertainment ( )o Ambience ( )o Price ( )

Rationale: - To determine the attributes that attract crowds to a particular food and beverage

outlet.


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9. What is your opinion about the Lounge concept in India?o Popular with a rapid growtho Coming up at a slow rateo Remains stagnanto Not so popular

Rationale: - To determine the popularity of the Lounge concept in India.

10.For what purpose would you go to a Lounge?(Mark where applicable)o Formal/Business meetingso Informal meetingso Special occasions (birthdays, anniversaries, etc.)o Casual gatherings (with friends, co-workers, etc.)

Rationale: - To analyze the reasons behind people visiting Lounges and to show their social

needs for visiting them.

11.For whom do you feel Lounges are most suited?o Business clientso Touristso Familieso Young people (age group18-30 yrs)

Rationale: - To determine the social class of people that would be most suited for the lounge

concept.

12.What is your opinion about the future of Lounges?Reason: - To determine whether the Lounge concept works for the Indian markets.


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3.5 SAMPLING

For the purpose of research the authors have concentrated on people visiting food and

beverage outlets on a regular basis. These include people of all ages and economic status. The

purpose of choosing such a sample is to get a complete perspective of the market scenario.

By choosing a sample of 50, from the metropolitans of Mumbai and Pune covering all aspects

of the economy, the sample leaves no space for doubt or biases. It also shows how there are a

change in the types of market segments attracted to Lounges.

For the managers questionnaire, the researchers have targeted those working in Lounges as

well as other food and beverage outlets to analyze their take on such concepts in India. Theyhave taken a sample of 10 managers from the cities of Pune and Mumbai. It also helps us to

determine what kind of market audience they are targeting. Thus, it helps the researchers to

prove their aim that there is a preferential shift in the market segments targeted by Lounges.

3.6 DATA ANALYSIS

Data analysis is essential because when data is in the raw form, it is very difficult to interpret.

Information remains hidden and the true picture is not portrayed. Data analysis may be

qualitative or quantitative. The data collected is then analyzed by the use of bar diagrams and

pie charts. The information obtained was compared to verify the hypothesis derived from the

secondary research work.

3.7 CONCLUSION

The purpose of this chapter is to show the methods used by the researchers for the analysis of

their subject. It describes the purpose of the research, the analysis, the method of data

collection, the rationale behind the method and finally the description of the samples taken. It

acts as a guideline to the following chapter. Thus, this chapter is of great importance to the

research.


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CHAPTER FOUR: ANALYSIS AND INTERPRETATION

4.1 INTRODUCTION

The purpose of this chapter is to interpret the data collected by means of the two

questionnaires: the managers and the market segments and then analyze the same to prove

the proposed hypothesis.

4.2 QUESTIONNAIRE ANALYSIS

Each question from both questionnaires have been analysed below using graphs and

diagrams. Their results have been given after each question. This method helps in

mathematically coming to a conclusion to the data analyses.

4.2.1 QUESTIONNAIRE ONEFOR MANAGERS

1. What kind of Food & Beverage outlet do you run?o Fine-diningo Casual-diningo Fast food/Takeawayo Bar/Lounge

Figure 3.1: Kind of Food and Beverage Outlet


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The respondents of this questionnaire were chosen from all types of food and beverage

outlets, concentrating mainly on managers of Lounges in the cities of Mumbai and Pune. As

seen from the figure, a majority of the respondents were chosen from the bar or lounge

concept as this helps the researchers narrow their research.

2. How long have you been in this business?o Less than 1 yearo 1-2 yearso 2-5 yearso Over 5 years

Figure 3.2: Length of Business

The graph depicts that 46% of the managers have been in the business for over 5 years. Thus,

the researchers have a sufficiently, long time-line to show the preferential shift in the target

market segments for lounges. By questioning managers who have been in the industry for a

long time, the researchers get well-experienced responses to their questions.


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3. What are your hours for business? (Mark where applicable)o Breakfasto Luncho Dinnero 24 hrs service

Figure 3.3: Hours of Operation

From the above graph, it is clearly visible that most food and beverage outlets run busy

during the evening, i.e. from 1900 hrs to late hours in the night. From the interpretation of

question 1 of this questionnaire, the targeted food service outlets have been lounges. Thus, it

can be safely interpreted that most lounges have their busy working hours mainly during the

evenings. It was seen that these lounges usually run from 2000 hrs to 0130 hrs.


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4. What is the profile of your customers? (Mark where applicable)o Business clientso Touristso Familieso Young people (age group18-30 yrs)

Figure 3.4: Profile of Customers

From the pie above we see that 49% of the guests that usually dine out are business clients.

As most of these are Lounge managers it can also be interpreted that 49% business customers

visit such Lounges. The next largest segment is of customers in the age group of 18-30 yrs.

who make-up for 38% of the sample.


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5. Rank the following in order of importance to attract customers.o Quality of food ( )o Quality of service ( )o Entertainment ( )o Ambience ( )o Price ( )

5. R ank the following in order

of importance to attract

customers.

30%

0%

10%

60%

0% a) Quality of food

b) Quality of s ervice

c) E ntertainment

d) Ambience

e) price

Figure 3.5: Order in importance to attract Customers

The aim of this question was to find out what attribute in a food and beverage outlet plays a

vital role in attracting guests. From the above pie it is seen that 60% of the managers feel that

Ambience plays a key role in attracting customers. The overall look and feel of an

environment decides whether a guest will repeat his visit in the future.


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6. What is your opinion about the Lounge concept in India?o Popular with a rapid growtho Coming up at a slow rateo Remains stagnanto Not so popular

6. What is your opinion about

the loung e co nc ept in India?

60%

40%

0%0%

a) P opular with a rapid

growth

b) Coming up a a s low

rate

c) R emains s tagnant

d) Not so popular

Figure 3.6: Lounge concept in India

It is seen from above that 60% managers feel that the lounge concept is rapidly catching up in

India. While 40% feel that this growth is happening at a slow rate. Thus we can infer that

there is a growing market for Lounges. The preference of the people to choose lounges over

other food and beverage outlets is one of the factors for this increasing growth rate.


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7. How would you rate your clientele based on economic status?o Upper class (Income above Rs.1 Lakh)o Upper-middle class (Income between Rs.50,000-1 lakh)o

Middle-middle class (Income between Rs.35,000-50,000)o Lower-middle class (Income between Rs.20,000-35,000)o Lower class (Income below Rs. 20,000)

Figure 3.7: Clientele based on Economic Status

The managers response to the economic status of their clientele interprets as follows: 62% of

their clientele fall under the upper-middle class with an income of Rs. 50,000 Rs. 1 lakh.

This shows that these clients have a high purchasing power and are willing to spend on a

luxurious experience.


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8. What is the purpose of customers to come to Lounges?o Formal/Business meetingso Informal meetingso

Special occasionso Casual gatherings (with friends, co-workers, etc.)

8. What is the pu rpos e of

c us tomers to c ome to loung es?

31%

8%

15%

46%

a) F ormal/B usines s

meetings

b) Informal meetings

c) S pecial occ as ions

d) C as ual gatherings

Figure 3.8: Purpose of customers to come to lounges

As seen from the above pie diagram, 46% managers believe that customers visit lounges for

casual gatherings closely followed by 31% managers believing that they visit lounges for

Business meetings. These casual gatherings would include casual meetings with clients,

friends socializing, etc.


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4.2.2 QUESTIONNAIRE TWOFOR MARKET SEGMENTS

1. Which age group do you fall under?o 18-30 yrs - 11o 30-50yrs - 45o 50-60yrs - 01o Above 60yrs - 03

Figure 3.9: Age group

As is visible in the pie above, 75% of the respondents were in the age group of 30-50 yrs.

This shows that more of the adult crowd is now visiting lounges. Next largest was the 18-30

age group which was 18 % of the sample.


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2. What is your monthly income?o Less than Rs 15,000 - 05o Rs. 15,00030,000 - 05o

Rs.30,00050,000 - 13o Rs.50,0001,00,000 - 15o Above Rs. 1,00,000 - 10

Figure 3.10: Monthly Household Income

According to the graph 32% of the respondents had an average monthly income of Rs. 50,000

to Rs. 1 lakh. Thus, the upper-middle class of people frequent Lounges more often. This

could be because they have a higher purchasing power and will to spend.


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3. How often do you go out to dine?o 1-2 times a month or lesser -06o 2-4 times a month -24o 4-7 times a month -11o More than 7 times a month -10

3. How often do you g o out to

dine?

12%

46%

22%

20%

a) 1-2 times a month or

lesser

b) 2-4 times a month

c) 4-7 times a month

d) More than 7 times a

month

Figure 3.11: Frequency of Dining Out

According to the pie chart, 46% of the people surveyed dine out 2-4 times a month and the

22% of the rest dine out 4-7 times in a week or more. Thus, the respondents were among

those who dine out often and thereby have a clear picture of what is new and what is

available in the market.


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4. How often do you go to a lounge or a similar concept?o 12 times a month or lesser -17o 24 times a month -18o

47 times a month -08o More than 7 times a month -05

4. How often do you g o to a

loung e or a s imilar c onc ept?

35%

38%

17%

10%

a)1 2 times a month

or lesser

b) 2 4 times a month

c ) 4 - 7 times a month

d) More than 7 times a

month

Figure 3.12: Frequency of Visiting a Lounge

As is visible in the pie above, 38% of the respondents visit Lounges 2-4 times a month, while

17% visit Lounges 4-7 times. Lounges, therefore, are attracting repeat business becoming

very popular in recent times.


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5. Where do you prefer to go to eat out?o Fine-dining -15o Casual-dining -15o Fast-food/Takeaway -07o Bar/Lounge -23

Figure 3.13: Preference of place to eat out

According to the graph around 38% of the people prefer going to Bar/Lounge where as 25%

of the people prefer going to Fine-dining or Casual-dining outlets. This proves that Lounges

are becoming more popular and are replacing other Casual and Semi-casual dining outlets.


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6. Who do you normally go out to dine with?o Business clients -22o Co-workers -10o

Friends -19o Family -10

Figure 3.14: Normally dine out with

According to the pie chart, around 37% dine out with business clients and around 31% with

friends. This proves that more often than not business customers visit Lounges to hold

informal or semi-formal get togethers, meetings, etc. Lounges attract more business clients.

This is a shift from the initial social gatherings of friends, families, etc.


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7. How much do you spend per individual?o Rs. 150-300 -04o Rs. 300-600 -17o

Rs. 600-750 -10o Above Rs. 750 -13

7. How much do you s pend per

individual?9%

38%

23%

30%

a) Rs. 150-300

b) Rs. 300-600

c) Rs. 600-750

d) Above 750

Figure 3.15: Average Spending Power

According to the graph the average spend per individual is Rs. 300-400 which is 38% of the

total. This shows that the purchasing power of customers is high which means they spend

more money in a Lounge.


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8. Rank the following in order of importance when you go out to dine.o Quality of foodo Quality of serviceo

Entertainmento Ambienceo Price

Figure 3.16: Order of Importance when you go to dine out

From the graph above it is clearly visible that 64% of the respondents feel that Quality of

Food is an important factor in deciding whether they should repeat their visits. Thus, it is one

of the most important attributes followed by Ambience (as suggested by managers).


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9. What is your opinion about the Lounge concept in India?o Popular with a rapid growth -34o Coming up at a slow rate -13o

Remains stagnant -01o Not so popular -01

9. What is your opinion about

the loung e co nc ept in India?

69%

27%

2% 2%

a) P opular with a rapid

growth

b) coming up at a s lowrate

c) R emains s tagnant

d) Not so popular

Figure 3.17: Opinion of Lounge Concept in India

According to the pie 69% of the people believe that there is a rapid growth of Lounges in

India. This can be interpreted as people being attracted and preferring Lounges to other food

and beverage outlets. This is due to the uniqueness of the Lounge concept.


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10.For what purpose would you go to a Lounge? (Mark where applicable)o Formal/Business meetings -17o Informal meetings -10o

Special occasions (birthdays, anniversaries, etc.) -07o Casual gatherings (with friends, co-workers, etc.) -23

10. F or what purpos e would

you g o to a loung e?

30%

18%

12%

40%

a) Formal/ Business

meetings

b) Informal meetings

c) S pecial

Occasions

d) Casual

Gatherings

Figure 3.18: Purpose of visit to a lounge

From the pie above, it is clearly visible that 40% of the people visit Lounges for casual

gatherings closely followed by 30% who visit Lounges for Formal/Business meetings. This

shows that there is a shift happening in the purpose of people visiting Lounges.


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11.For whom do you feel Lounges are most suited?o Business clients -23o Tourists -00o

Families -03o Young people (age group18-30 yrs) -32

11. F or whom do you feel

loung es are mos t s uited?

40%

0%5%

55%

a) Bus iness clients

b) Touris ts

c) F amilies

d) Y oung people (age

group 18-30)

Figure 3.19: Type of Customers for Lounges

From the pie above, it can be interpreted that 55% of the respondents believe that lounges are

suited to the people in the age group of 18-30 yrs. This would include college students, fresh

graduate workers, young entrepreneurs, etc. this group is closely followed by 40% business

clients who would hold their official meetings in lounges.


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CHAPTER FIVE: CONCLUSION AND RECOMMENDATIONS

On analyzing the past research works and the data collected by the researchers, it is seen that

the target market of Lounges are largely leisure guests who visit these Lounges with no other

agenda than to socialize, relax, maybe celebrate a special occasion, etc. However, the

researchers have also noticed a shift in the market segments that are attracted to Lounges. In

this chapter, the researchers have used the analyzed data to show this shift in the market

segments targeted by Lounges in recent times.

5.1 INFERENCE

Based on the analysis of the data in the previous chapter, the researchers have attempted to

show that there has been a preferential shift in the targeted markets of the Lounges. The

following results can be clearly seen through the data analysis:

The Lounges have developed in a rapid way since their inception in 1950. Many newconcepts have emerged such as the Coffee Lounge, Tea Lounge, Hookah Lounge, etc.

The established Lounges too are changing their look to meet the needs of their

clientele. The need of the hour is specialty and exclusiveness. This is exactly what

Lounges are attempting to deliver.

Managers have begun to change their regular Food and beverage outlets to theLounge concept. They believe that this concept is coming up at a rapid speed and so

they must take advantage of the situation. Thus, more and more Lounges are

launching all across the globe, and more specifically in India.

The managers of Lounges now prefer to target audiences under the business classrather than the younger, college-going crowd. After keen observation they believe that

it is time to shift their focus towards the more up-class, sophisticated, working group

of people as they would generate more revenue for them and improve the reputation

of their Lounges.


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The market segments that visit Lounges have changed significantly. From the datacollected we can say that now more business clients, co-workers, etc. frequent

Lounges rather than the initial casual, college going crowd. Nowadays Lounges have

designed themselves to meet the needs of their new clientele, thus bringing about the

shift in market segments.

The analyzed data also shows that the economic status of the people that visitLounges is of the Upper-middle class. They have a high purchasing power which they

are willing to use on themselves as well as their colleagues for an extraordinary

experience. Thus, conceptual or theme-based Lounges are coming up in a big way as

they have a ready market that they would attract.

The purpose of visiting Lounges, too, has undergone a shift. Earlier Lounges werevisited mainly by friends, families, etc to have a nice, casual, social gathering.

Although this has not changed drastically, yet it is visible that Lounges are also being

visited for the purpose of semi-formal meetings as well. Business-oriented customers

may hold meetings with their clients in Lounges simply to put them at ease and yet

not to seem too casual.

In the Indian scenario, Lounges are coming up in a rapid way. Although they havebeen in the Indian market for a long time, the new concept or theme-based lounges are

the ones that are now gaining popularity and developing faster and faster. Managers

as well as guests believe that the Lounge concept is budding at the speed of light and

will soon take over most of the food and beverage industry.

Managers of Lounges are looking at new trends to hike up their sales as well as attract more

crowds. They continue to target market segments in the leisure category; however they also

are looking at new market segments especially in the business category.


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Mr. Kaustubh Salunke of Zaha, Caf-Wine Bar-Bistro, says We are targeting at

corporate travellers and the youth as they have more spending power and are price

insensitive. He believes that the Lounge concept is an upcoming trend as it serves food

and beverage in a contemporary style. Mr. Yogesh Jain, Unit Head at Mauve Lounge, is

of the opinion that the Lounge concept will be very popular in the future due to the

change in lifestyles. Mauve Lounge is already targeting business and corporate clients

across India. According to Mr. Dinesh Shetty, mangaer at Thousand Oaks, Lounges are

a trendy concept and they hope to target not just the youth but also the more

sophisticated, niche crowd.

Lounges, especially those that offer specialized services, are highly popular among the youth,

corporate clients, professionals, etc. They are not very different from other casual or semi-

casual dining outlets but each one of them provides that X factor which attracts more and

more guests towards them. Arpita Mehta, a fashion designer in Mumbai, believes that

people from all age groups want to go out, relax after work and simply unwind after a hard

days work. So Lounges become the perfect venue to suit their purpose as they are not to

noisy like discos and clubs at the same time they are not too formal like proper

restaurants. Food blogger, Kajal Tejsinghani, says It is a good change from the usual

clubs & bars; being a foodie, I am happy it gives more emphasis on different food

cuisines and if it keeps us this good work it will be a boon for India. Aspiring artistes

and entrepreneurs find Lounges a great place for exposure and for building contacts as

people from all walks of life come here to socialize; their social visits can become very

productive for them.

Every coin has two sides. Some people still are apprehensive about the Lounge concept. They

believe that it is growing at a very slow rate. They are of the opinion that it is just a passing

phase that will soon fizzle out. In their opinion, the Lounge concept will still take a very long

time and many more trends to reach its height of success.


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5.2 SCOPE FOR FURTHER RESEARCH

From the above inferences, the researchers would like to show that although Lounges tend to

remain more popular among the younger generation there has been a rise in its popularity

among the business class of people, professionals, etc. as well. The upcoming trends and new

styles coming into the market are all targeted at attracting new market segments in different

economic stratas, age groups, etc. Thus, the purpose of the research has been fulfilled

successfully.

The authors would like make the following recommendations for any further research:

-

Further research in the marketing strategies that can be used in order to target theseupcoming markets

- Identifying newer markets and market demands, that are in emergence in therestaurant business or its sub- components

- Focusing on these newer markets and finding ways to fulfill their demands, as theolder markets will always be there


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BIBLIOGRAPHY

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Customer Segments in the Restaurant Business Globally

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