...They’re NOT your friends and you won’t win any more by trying to be like them
No one ever wins based on their capacity for imitation.
National and large chains
These operators face enormous fixed costs for human resources, product development, inventory, capital systems and equipment, marketing and distribution (numerous locations). In this situation, only through multiple markets and restaurants and marketing, sales and service channels can adequate sales and profit be achieved.
Consequently, they must present standardized products, services, and marketing and distribution strategy. Naturally, big chains turn to their heavy investments in back office systems, technology and massive marketing budgets to hammer out share of market. DON’T FOLLOW THEIR LEAD! Take the beer industry for example. With brands like Heineken or Budweiser, one size can’t possibly fit all around the world, but that’s what they offer.
Independent, local and regional operators
On the other hand, smaller operators have the potential to understand their customers (AKA – neighbors) that the big chains can never match. The competitive advantage for smaller operators lies in catering to the particular demands of local consumers. Smaller operators can also leverage their advantage further with marketing methods that fit their resources and culture, NOT that of their big rivals, who can only try to make one size fit all.
Consumers’ needs and preferences vary from town to town, even in a single state. Restaurants truly in the hospitality game should compete on the basis of well-established relationships with their customers and REAL presence in their neighborhoods. They’re set up to know these differences and respond to meet the needs of their geographic markets. The differences may be due to differing economic bases and vitality, demography or history, etc. Going back to the beer example: note the growing list of craft brewers that sell ONLY within local markets.
Our advice to operators worrying about the big boys:
If you’re an independent, local or regional hospitality establishment, how do you communicate with and engage your local and community markets?
- Compete where your assets are at a competitive advantage.
- No one ever wins based on their capacity for imitation.
- Your customers don’t want you to be big, and mass feeders can’t be you!