Getting to the core of things
- An internship paper about finding the user segments of
Restaurant 2 Night
Introduction
Over the course of 2010 and 2011, the industry for restaurant discount in the shape of
last minute booking and daily deal sites has gone from being basically vacant to
extremely crowded. As a result of this, marketing noise has increased making it difficult
for companies to position themselves uniquely with regard to both the BtC and the B2B
market, making creative and careful marketing more important than ever.
When the founders of Restaurant 2 Night (from here on: R2N) started the company in
November 2009, they only had a very loosely defined user segment in mind. After all,
who does not like to eat out at a reduced price? They did make the assumption that
since the business would be 100% online based, the users would probably be people
who were comfortable with the Internet and thus people in their 20’s and 30’s were
thought to be more susceptible to the concept.
When I started my internship at the company in August 2011, the segmentation had
evolved from an assumption to an evaluation of the data available. The user segment
was now defined as women aged 30-50 living in or around Copenhagen. Although this
segment was defined on the basis of actual data, it was still very loosely defined and
thus it made effective communication and marketing difficult. For me the main objective
was clear: to conduct a thorough user survey and define a clearer user segment on the
basis of it.
Now the question was just which type of survey to conduct - would a qualitative and
thus more psychographic approach be most effective or would a quantitative and
thereby more demographic survey be a better fit. At the company, we chose to employ
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quantitative research in the shape of a questionnaire. We decided to do so because we
would rather know a little about many people than a lot about few people. As Solomon
et. al. write in “Consumer Behaviour: A European Perspective”: “Demographics allow us
to describe who buys, but psychographics help us understand why they buy” (Solomon
et. al. 2010: 580) and for our purpose knowing the former was most important.
On the basis of this survey, my purpose with this paper will be to answer the following
research question: Considering Restaurant 2 Night’s profile, economic means and
knowledge of its customers, which marketing strategies should the company employ to
gain unique positioning and thereby continue its economic growth?
The company and its situation in the marketplace
The company
As mentioned in the introduction, my internship was carried out at R2N; a small
entrepreneurial business in the industry of restaurant discount in the shape of last
minute bookings. The concept is simple. As a user, you log on to the company’s web
page and browse the discounts offered by R2N’s partner restaurants (there are
currently around 100) ranging from 10 to 40% on everything on the menu including
drinks. After making a choice, you book a table and once the booking has been
confirmed you receive an SMS with the booking details which is to be shown at the
point of arrival at the restaurant. Because R2N is a last-minute booking site it is only
possible to book two days in advance with the discount increasing when you book on
the same day. Revenue is generated by a fixed charge received from the restaurants for
every guest R2N sends their way and not from its users since it is free to use the
service.
When the company was founded in November 2009, the mission was dualistic yet
surprisingly simple; aid the hurting restaurant industry by helping the restaurants sell
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their unused capacity and make it more affordable and thus easier for the consumers to
eat out by offering them a discount when doing so. In many ways the concept is
identical to last-minute travels. It features a dynamic pricing system, which ensures that
the restaurant owners have a high degree of flexibility when setting the price of their
vacant tables.
In the two years R2N has been online, the company has developed considerably. The
website currently has more than 10.000 registered users with approximately 50 new
users signing up each day. In 2010, only about 25 new users signed up daily.
Economically, the company has seen considerable growth in 2011. The total revenue
quadrupled over the course of the year, which was a big improvement over 2010 where
it “only” doubled. Even though R2N has increased its revenue, the substantial expenses
to marketing efforts mean that the company still needs to keep growing in order to make
ends meet, continue its operations and eventually expand.
The industry
Even though R2N is a last-minute booking site, the company can be categorised as
being part of the restaurant discount industry, which encompasses both last-minute
booking sites (R2N, Earlybird.dk), card clubs (Club Lorry, MenuCard) and the daily deal
sites (Downtown.dk, Sweetdeal, Groupon). When R2N entered the industry in late 2009,
the number of players was extremely limited, but through 2010 and especially 2011 the
number of companies in the industry has skyrocketed. As of January 2011, there are
approximately 30 companies all selling restaurants menus or visits at a discount mainly in Copenhagen where R2N also has its bulk of restaurants (to be fair many of
these companies also sell other things but restaurant menus are a big part of their
revenue). Aside from the related companies, R2N is also subject to lose revenue to the
individual restaurants that are not a part of R2N since some potential customers might
look through the offers on the site only to discover that their favourite restaurant is not
there (the results of the questionnaire confirms this), after which they book a table to
that restaurant through its own website or by phone. This problem ties to the notion
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Product categorisation, a cognitive process in consumer decision making, which will be
discussed in the next chapter.
In spite of the fairly crowded industry, R2N has a very good chance of differentiating
itself from its competitors since it is still the only company that delivers last-minute
booking with absolute freedom of choice when it comes to selection of food and drinks
in the restaurant1. In this regard, the closest of its competitors are Early Bird (last-minute
booking but fixed menus), Book a Table (online booking with a large number of
restaurants, but not always freedom of choice and not discount at all the restaurants)
and Menu Card (freedom of choice, but not last-minute booking and not free to use).
The daily deal sites are the least similar competitors, but since they account for most of
the industry they should be taken very seriously. As a result of the industry maturing
very fast, one of the biggest challenges for R2N has been to position itself uniquely both
in regard to BtC marketing and B2B marketing (the restaurants). The concept may differ
a lot from most of the competitors, but convincing the restaurant owners that it is, still
poses a challenge. With so many companies competing over a relatively small user
segment, some are bound to fail and therefore unique positioning achieved by careful
and inventive marketing is very important for R2N if it wishes to continue its economic
growth. The marketing suggestions based on the quantitative survey will be discussed
in Marketing Suggestions from page 23-26.
Theory and previous research
Theory
Hyperchoice: A very relevant theory in regard to the industry that R2N finds itself in is
the concept of Hyperchoice, which occurs when consumers have too many options
instead of too few. According to Solomon et. al., Hyperchoice is “a condition where the
large number of available choices forces us to make repeated choices that may drain
1
For a more detailed depiction of this, see the brand positioning map in appendix 1
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psychological energy while decreasing our abilities to make smart decisions” (Solomon
et al. 2010: 314-315).
Since R2N is in an industry with many competitors that are similar but not the same,
there is a considerable risk of inflicting Hyperchoice onto the consumers. There are,
however, useful tools available to counteract this such as unique positioning.
Problem recognition and the FCB planning model: Problem Recognition (Solomon
et al. 2010: 320-321:) occurs when there is a shift in the ideal or actual state of the
consumer thus prompting the consumer to make a purchase. If merged with the FCB
planning model (Barker & Angelopulo 2007: 249), which categorises purchases into
rational vs. emotional, and low involvement vs. high involvement it can be said that a
change in a consumer’s actual state will usually prompt him to make a rational buy
whereas a change in the ideal state will trigger an emotional purchase. The latter is
where restaurant visits belong, especially in Denmark. Whether restaurant visits are low
or high involvement purchases differ depending on the restaurant, but since R2N is a
last-minute booking site it can be argued that they fall somewhere in middle, they cost
more than a soda or a McFeast, but less than a new TV or a holiday. It almost goes
without saying that a high involvement purchase entails a more extensive search
process on the behalf of the consumer than a low involvement purchase. Hence, those
looking for a restaurant to dine at will usually spend a moderate amount of time looking
at options. Therefore, R2N’s presence on the search results of keywords should be a
key priority.
Product categorisation: Product categorisation refers to the way consumers classify
products cognitively when making a purchase decision. A full table showing the levels of
abstraction can be seen in figure 9.13 on page 335 in Consumer Behaviour: A
European Perspective. Strategically, product categorisation is useful for several things.
First of all, it can be used when positioning a product as a way to either identify a
product’s place in the mind of consumers and/or reposition to a more favourable
position. It can also be used to identify the most relevant and dangerous competitors,
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discovering exemplar products and lastly to locate products (Solomon et al. 2010: 335337).
Previous research
There is not a lot of previous research available since this industry is very young.
However, one man (Utpal Dholakia of Rice University, Houston, Texas) has done
research on Groupon, and even though the research is based in the United States and
Groupon as a concept differs from R2N in several ways, the research can be
considered useful and will therefore be reviewed quickly here.
The study measures the satisfaction level of 150 SMBs, who had used Groupon, by
asking the business owners questions such as: how effective the Groupon promotion
was at bringing in new customers, how many of these that came back, whether it was
profitable for the business, whether they would recommend it to another business owner
and, lastly, whether they would consider running another promotion (Dholakia 2010).
The results were not particularly encouraging for the deal sites or their business
partners. 42% of the restaurant owners participating in the survey (20 of 48) felt the
promotion was unprofitable for them. Those businesses deeming the promotion
unprofitable reported that only 25% of the customers bought anything beyond their
coupon’s value and that only 15% came back. 42% of the businesses mentioned that
they would not do another Groupon promotion – mainly because of the customers’ high
price sensitivity. Many of the business owners were also irritated by Groupon “imitators”
expressing more negative feelings towards them than towards Groupon and they were
tired of the “barrage of calls” they received from companies wanting them to run a
promotion (Dholakia 2010).
This is of course just a single survey, and it should not be taken as the absolute truth,
but some of the tendencies displayed in the survey are interesting in regard to R2N.
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First, the comments from the SMB owners about the “barrage of calls” should be noted
since R2N is always trying to find new partners in the restaurant industry via sales calls.
Here differentiation from the competitors could help R2N. Also, the fact that many of the
participants complain about unprofitability means that flexibility of the concept as
opposed to many of the competitors should be mentioned to the restaurant owners.
Methodology
As mentioned in the introduction, we decided to conduct a thorough user survey based
on a questionnaire in order to define the core user segment(s) properly. Even though a
questionnaire is best suited to collect demographic data such as age, gender and
income, it was decided that the questionnaire should be quite extensive in order to
make room for more psychographically oriented questions. Using table 1.1. in
“Consumer Behaviour: A European Perspective” (Solomon et al. 2010: 9) as the basic
guideline, I formulated questions in five main categories. These were: demographic,
geographic, interests (e.g. hobbies, tv preferences), restaurant habits and preferences,
and loyalty to R2N. There were four reasons as to why such a large variety of questions
were included. First, I did not want to do customer segmentation based exclusively on
demographic data. Second, the questions regarding newspaper, TV and radio
preferences provide useful data in regard to future advertising efforts. Third, inquiries
into the respondents’ most wanted restaurants and general comments give useful
insights into how to improve the product and service that is R2N. Last, the loyalty
questions were included because they are valuable when measuring brand equity in the
future. In conclusion, the wide scope of the questions was selected to provide data
beyond the scope of this paper2. I will get back to this matter in the Future Research
chapter.
2
I have since found much of this data to be invaluable in regard to the analysis.
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To begin with, the first draft of the survey was composed on the basis of table 1.1. in
“Consumer Behaviour: A European Perspective” (Solomon et al. 2010: 9). This draft
was then discussed among the employees and employers of R2N, after which it was
presented to my internship counsellor. Based on her feedback, a second draft was
composed, which was then discussed and tweaked at R2N before a near final version
was put into the company’s user survey program. It was then tested on a handful of
users, after which the final changes were made and the survey was published to R2N’s
“fans” on Facebook and the subscribers of the R2N newsletter.
The survey ran for two weeks before the results were collected and put into an Excel
document. Some of the results, such as the comments, were analysed in Excel before
the rest was re-coded and transferred to SPSS. In SPSS the data was first reviewed
using the “frequencies” and “crosstabs” functions in the descriptive analytics and chart
were made using the chart builder. Subsequently, the data of the particularly interesting
groups was isolated and saved in different data files, after which it was analysed using
the “frequencies” function.
Results
There was a total of 909 respondents participating in the survey. This amount
constitutes approximately 10% of the total amount of Facebook fans and newsletter
subscribers. According to calculations done using the sample size calculator from
Raosoft (Raosoft 2012), this sample size is more than sufficient to meet the standard
demands.
The following review of the results is based on all the respondents. The differences
between the respondents who have used the service and those who have not will be
reviewed in the next section.
Demographics
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Gender and age:
The two charts above show the distribution of the respondents’ sex and age. As it can
be seen, there is a predominance of women participating in the survey. With regard to
age, the biggest group is people in their fifties, but every age group from the twenties to
the sixties is well represented.
Civil status and number of children
As the left chart clearly shows, the majority of the respondents (79%) are either married
(46%) or cohabiting (33%). Only 20% are single (17%) or divorced (3%).
With regard to children, 60% of the respondents are parents with two being the most
common number of children.
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Education and income
Most respondents have an education in addition to a basic education (folkeskole,
gymnasium). 30% have a bachelor degree whereas 23% have a master’s degree. Only
21% do not have an education other than a basic education which is very low compared
to the national average where the number is 44% (Danmarks Statistik 2012).
The income of the respondents is distributed fairly even between the different
categories. However, if we look at the group of respondents where there are two people
contributing to the household income, the percentage of people earning more than
70.000 DKR rises from 17% to 24%.
Geography
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Geographically, the respondents are living in or around Copenhagen, where the bulk of
R2N’s partner restaurants is also situated. Interestingly, only 3% of the respondents live
in Jutland. This is interesting because R2N has around 15 partner restaurants in each of
the mainland’s two biggest cities.
Interests and media habits
Interests
The left charts lists the interests of the respondents, while the right one shows their
favourite type of holiday.
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Eating out and travelling are the interests most commonly found among the
respondents as both are included in more than four out five of the replies to this multi
response question. Watching movies, cooking, and music/concerts are also fairly
popular - each appearing in more than three out of five of the replies, while sport/fitness
and going to the theatre are only found in a little less than half of the replies. The far
least popular interest is art/art exhibitions, which only appears in a third of the replies.
As the second chart shows, the respondents favour a city break as the holiday of their
choice as 42% have chosen this option. The respondents also like beach holidays, as a
third of them have chosen this type of holiday. A fifth prefers adventure holidays while
only one out of 20 has skiing holidays as a favourite.
Television preferences
This chart shows the TV channels watched regularly by the respondents. In the
questionnaire, this was a multiple response question.
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Unsurprisingly, it is Denmark’s two biggest channels, DR1 and TV2, that are watched by
the most of the respondents. The third most watched channel is DR2 and number four
is TV3/TV3+. From these channels, there is a big gap down to the rest of the channels
as all of the remaining channels are being watched regularly by less than three out 10
respondents.
This chart shows which television programmes about food are being watched regularly
by the respondents. Here, the dominating programme is definitely “Spise med Price”,
which figures in almost twice as many replies as the runner up, “Det Søde Liv”. Both
programmes air on DR1, the most watched TV channel.
Radio and newspaper preferences
In this multiple response question the respondents had to answer which radio channels
they listened to on a regular basis. Just as with television channels, DR was a clear
winner with the two most popular stations (P3 with 44% and P4 with 34%). The most
popular commercial station is Nova FM with 22% - the runner up is The Voice with 18%.
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This multiple choice question asked the respondents to name the newspapers that they
read on a regular basis. As the table shows, free newspapers (e.g. Metroexpress) and
local newspapers (also free) are being read by many. Out of the newspapers that cost
money, Politiken and Berlingske are by far the most popular. Tabloid style newspapers
such as BT and Ekstra Bladet only have half as many readers among the respondents
as the aforementioned newspapers.
Facebook
The left chart shows that almost 4 out of 5 respondents have a Facebook profile. Of
those, two out of three “like”3 R2N.
When you “like” a company page on Facebook, you receive news from it in your newsfeed i.e. front
page. It is therefore a big advantage for a company to gain “likes”.
3
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Smartphone
Half of the respondents have a smartphone, but as the right chart shows, only 16% of
them have used it to access either the R2N application or the R2N website.
Newsletter
Four out of five of the respondents receive the weekly newsletter and six out of 10 of
those who did not, signed up through the survey4 immediately.
4
The survey was set up in such a way that when the respondents were asked whether they would like to
receive the newsletter, they clicked a button that said: “Yes, sign me up for the newsletter”. They were
then signed up automatically.
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Restaurant habits and preferences
How often, and with whom, do you eat out?
The bulk of respondents eats out once (31%) or a couple of times a month (42%). Only
a little more than a tenth of them eats out less frequently than that. It is worth noting that
16% eats out once a week or more.
This multiple response question asked who people eat out with on a regular basis. Out
of the six options three stand out; partner/spouse (75%) friends (64%) and family (53%).
Preferences regarding discount - and actions toward it
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When it comes to which type of discount the respondents prefer, the left chart shows
that more than three out of four prefer the type of discount embodied by R2N over the
one embodied by coupon sites such as Groupon.
The multiple response question in the right chart asked the respondents whether the
discount given when eating out with R2N made them order more food or drinks, or tip
more than they normally would. It seems many people do not spend anything extra as
this option was selected by 60% of the respondents. There are, however, two more
options that figures in more than 20% of the replies; ordering one more dish than usual
and tipping more than usual.
Bookings with Restaurant 2 Night
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55% of the 900 respondents have booked a table through R2N. In the next section, the
major differences between their replies and the replies of those who have not booked
will be reviewed.
The right chart question was a multiple response question that asked those who had not
booked through R2N yet what the reason for this was. 39% said they did not know of
R2N at the time of their last booking and 28% said they would use R2N the next time.
Other popular reasons were not always booking in advance (23%), not booking online
to save money (24%), and that R2N did not have the right restaurants (22%). Only 10%
had not booked because the discounts offered were not good enough.
Restaurant selection through R2N
This multiple response question asked the respondents to select which parameters are
important when choosing a restaurant through R2N. At 62%, price is the factor
appearing in most people’s questionnaires. Good reviews and food of a high quality are
also important to many people, as these parameters appear in 44% of the replies.
Atmosphere/interior design, type of kitchen, size of discount, and location all appear in
more than a third of the replies while food control (“smileys”) does not seem to be
important to many people as it is only featured in 18% of the questionnaires.
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Loyalty to Restaurant 2 Night5
The top left chart shows how many of the respondents have booked through another
online booking or coupon site. 55% have, and 45% have not.
The top right chart took this notion of loyalty a lot further and asked whether the
respondents ever eat out without using R2N. As it turns out, one in 20 never does that.
The bottom chart shows the replies to a multiple response question where the
respondents gave the reason(s) as to why they sometimes tried other discount sites or
booked directly through the restaurant. Here, more than half of the respondents replied
that it was because R2N does not have the right restaurants. This was by far the most
5
Only the people who said “yes” to having booked through R2N were asked this question.
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common reason, but reasons such as not always booking in advance or online, or
wanting to try another offer were also quite common. As with the question asking the
respondents why they had not booked yet, the quality of the discounts was the least
common reason.
Most wanted new restaurants
In this multiple response question, the respondents were asked to list which kinds of
restaurants (e.g. French, Italian) they would like to see more of on R2N. The chart
shows the five top choices; Italian, gourmet, Thai, Danish, and sushi.
Top 10 most wanted restaurants
1. Sticks and Sushi 21 votes
2. MASH 15
3. NOMA 13
4. Madklubben 9
5. Arti’kok 7
6. Famo 6
6. Den lille fede 6
8. Garda 5
9. L’education nationale 4
9. Riz Raz 4
9. Kong Hans 4
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In the survey, the respondents were given the option to request their most wanted
restaurant. As the list shows, it is medium priced rather than exclusive restaurants with
a Michelin star that dominate the list. In fact, only two of the 11 restaurants on the list
have a Michelin star. Of the remaining nine, MASH is the only restaurant in the high end
of the price scale. The remaining are all medium priced restaurants with the exception
of Riz Raz, which is in the low end of the price scale. Interestingly, the fifth most wanted
restaurant, Arti’kok, is situated in Hvidovre - a suburb to Copenhagen. This fits well with
the fact that many respondents are from Hvidovre.
Those who have not booked vs. those who have
The following section will describe only the major differences between the respondents
who have not booked a table through R2N and those who have.
In the group of respondents who have booked there are…

More men: 34% vs. 23%.

More people in a relationship: 84% vs. 73%.

More people reading newspapers – especially the more serious (Berlingske and
Politiken) and specialised ones (Børsen and Information). Only 13% of the
respondents who have booked do not read newspapers – the percentage is 21
for those who have not.

More people listening to “talk radio” (i.e. P1): 24% vs. 13%

Less people who “like” R2N on Facebook: 61% vs. 67%.

More people who receive the newsletter: 85% vs. 74%.

More people who have used their smartphone to use the R2N application or
access the webpage: 24% vs. 8%.

More people that eat out once a week or more: 20% vs. 12%

More people who have used a coupon site or another booking site: 64% vs. 45%
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Analysis and discussion of the results
Having reviewed both the general results and listed the major differences between the
respondents who have booked a table through R2N and those who have not, it is now
time to move on to the analysis of these results. Since a complete analysis of all the
results is too time consuming and ultimately uninteresting, I have identified two groups
that I find particularly interesting in regard to the future marketing and communications
efforts of R2N. Below I will quickly explain why these groups have been chosen before
analysing them further.
The two segments
Middle aged women in a relationship
As the results show, there is a predominance of women participating in the survey and
the majority of users are from 30 years and up, with the biggest age groups being
people in their 40’s (22%) and 50’s (26%). Compared to the demographics of Groupon 6,
a higher percentage of R2N’s users is female and the users are older (Emarketer 2011).
The relatively mature age of R2N’s users also means that most are married or
cohabiting and have a relatively high income. The latter also because the education
level of them is high compared to the national average. Because there are many
married/cohabiting women from 40-60 years, their interests and restaurant habits are
interesting to investigate further.
This group of respondents is comprised of 247 people, and sets itself apart from the rest
on primarily two areas. First, there is a very sizeable percentage of the group that has a
high income. 50% have a household income of 60.000 DKR or more. This is in part
because of the fact that the majority (four out of five) live in a household where more
than one person contribute financially, but nonetheless it means that this group has a
significant amount of money to spend, which makes it attractive. Second, when
respondents in this group choose to eat out with alternatives to R2N, it is not because
they do not book in advance, but rather because of the restaurant selection. With regard
6
It was only possible to obtain data demographic data from Groupon
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to which types of new restaurants this group prefers, Italian tops the list in front of
gourmet and Thai.
Frequent restaurant guests
When it comes to restaurant habits, it would be very interesting to delve deeper into the
interests and demographics of the group of respondents that eats out once or more a
week. This group, which accounts for 16% of the respondents, is obviously spending a
lot of money eating out, which potentially makes them very valuable customers. So
knowing who they are and what they like could prove very useful in regard to future
marketing efforts.
Demographically, this group sets itself apart from the respondents as a whole by being
younger. Almost 50% are in their 20s or 30s. Only 35% are in this group when it comes
to the total amount of respondents. In spite of their younger age, the percentage of
people in a relationship is the same as with the total amount of respondents.
It is maybe because of this young age that this group is more likely to be on Facebook
(87%), to have a smartphone (69%) and to have used it to access R2N’s application or
the webpage (25%) than the respondents as a whole.
Another thing that characterises this group is that it is less concerned about price when
making a restaurant choice through R2N (46% vs. 62%). When the respondents in this
group choose another service than R2N, it is most often because they do not book in
advance or because R2N does not have the right restaurants. With regard to which
types of new restaurant this group wants, Italian restaurants are the most wanted.
Gourmet and sushi follow in second and third place.
Marketing suggestions
So where does all this lead to? In the introduction, I talked about creative and careful
marketing. In the case of R2N, what should that be? I have divided my suggestions into
three categories: Who to target, how to target them, and where to reach them.
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Who to target
As described above, two core segments stand out from my analysis: Women from 4060 in a relationship and restaurant interested and tech savvy people in their 20s or 30s.
The first segment is interesting because a large part of the respondents belong to it and
R2N is thus a concept that appeals to it. As previously mentioned, this segment is also
interesting because of its economic resources and because it differs from the core
segment of Groupon and therefore most likely the majority of the daily deal sites 7. This
differentiation is interesting in regard to the Hyperchoice theory. The reason why R2N
will want to avoid Hyperchoice is that many of its competitors possess much larger
advertising budgets and thereby a much higher chance of achieving high brand
awareness, which will often make them the consumers’ standard choice. By marketing
itself to a different user segment than these companies, R2N has a better chance of
positioning itself in a unique way.
The second segment is interesting because it consists of people who eat out very often
and therefore spend a lot of money doing so. It is not a segment that R2N has reached
as well as the former segment and furthermore its young age is very similar to that of
the daily deal sites, which does not make things easier for R2N. In the next section I will
make suggestions on how and where to reach each segment.
How and where to reach them
In regard to the first segment, R2N has already been very good at reaching it, so a big
concern here would be to make them eat out through R2N more often. For this purpose,
a loyalty system would be a great course of action. Users could be rewarded for making
new customers sign up, writing reviews, and most importantly; for booking through R2N.
The concept of a loyalty system is nothing new and has proved its value in many other
industries such as the travelling industry or even at fast food restaurants (buy nine
pizzas, get your 10th for free). A loyalty system would also be useful in regard to
As previously mentioned, it was only possible to obtain demographic data from Groupon’s customers
but since companies like Downtown.dk and Sweetdeal are nearly identical, there is a big chance that the
demography of their customers is very similar.
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hyperchoice and product categorisation, since it would improve R2N’s chances of being
the standard choice of the consumers.
Raising brand awareness should also be a focus though, but how will that be achieved
most effectively? Right now, the marketing budget of R2N is used primarily on Google
Adwords and Facebook ads, and with regard to the concept of Product Categorisation,
this makes perfect sense. Therefore there is no reason to change these methods
because they have proved to be effective and precise tools for R2N in the past.
However, if the company were to start advertising on the TV, in the Radio, or in
newspapers where would the best places to do so be?
As the financial situation of R2N is now, TV is way too expensive a medium to consider,
so the attention should probably be directed at the radio or newspapers. Unfortunately,
the most popular radio stations among the respondents are public service channels,
which do not feature commercials. That leaves us with newspapers. As the results
show, almost a third of the respondents read their local newspaper regularly and since
these are a relatively cheap place to advertise, compared with Politiken or Berlingske,
this could be a good place to advertise. Since most of the respondents live in
Copenhagen, this would be the place to start and because all the different local
newspapers in Copenhagen are part of Berlingske Media (Berlingske 2012), it should
be possible to get a good deal when advertising in several of the newspapers.
An alternative to paid advertising in newspapers is Public Relations, which can be a
fantastic way to increase brand awareness. It has an advantage over paid advertising
because it is more trustworthy since the sender is the media outlet rather than the
company. It is, of course, not easy to employ successfully (during my time at R2N we
made considerable efforts with limited results) but the rewards can be huge, especially if
the press release gets published in the “right” publication. This could be Politiken,
Berlingske or one or more of the local newspapers in Copenhagen. A shortcut could be
to buy advertising space and simultaneously release a press release in order to give the
publication of choice an “extra incentive” to publish the press release. Even though the
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publications will never admit to it, Rene Hjetting, founder of Press Wire, said in a
workshop I attended that this would give the company an edge.
One way to market R2N to this segment could be as an “Everyday luxury for you and
your partner” or as “A nice surprise for your chosen one”. The economic means of this
segment means that they can afford a spontaneous dinner once in a while, and its age
means that there is not likely to be any small children that need babysitting.
Furthermore, many of the couples in this age may have been together for a long time
and the romance may have dwindled a little. What better cure than a spontaneous,
romantic dinner?
In order to reach the second segment, two methods would be very useful. First, since
many in the segment have a smartphone and use it to access R2N’s offerings, an
updated focus on the mobile website and the R2N application would be a good place to
start. Many stated that they do not always book in advance, but maybe a great
application and a good mobile webpage will make it convenient enough for them to reconsider. In regard to Problem recognition and the FCB planning model this would also
be useful since the customers would always be able to interact with the service when
the need arises.
The primary marketing message to get across to this segment is the diversity of the
selection of restaurants on R2N.dk compared to its competitors. After all, when you eat
out once or more a week, it is nice to have a wide selection to choose from.
Many from this segment did state that one of the reasons for choosing an alternative to
R2N was the restaurant selection, so partnering up with new places should always be a
key priority. The loyalty would again be a good way to make these valuable customers
keep coming instead of them trying out the competitors.
Limitations
As is always the case when making a quantitative survey in the shape of a
questionnaire, there is a risk of people misunderstanding one or more of the questions
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or not telling the truth when answering. According to Foucault, the latter happens not
necessarily because people want to lie but rather because we want to believe that we
are good people living in accordance with the proper societal discourse (Foucault 1972).
In the question asking the respondents how they behave when eating out with R2N,
some may answer that they tip more than usual even though it has only happened
once. In short, we often select the “best” version of ourselves when answering a
questionnaire of this kind.
Conclusion
The market for eating out with a discount attracts a wide range of people, and this,
coupled with the limited marketing budget of R2N, can make it difficult to pin point
exactly who to target. In the end, after spending many hours going through and
analysing the results, I chose the two segments described above as the most desirable
to market to. In more than one way these segments are in contrast to each other.
The characteristics of the “middle aged women in a relationship” segment are very
demographic, and this segment was chosen because R2N has had success attracting it
to the concept so far. With this segment, it is not a case of re-inventing the wheel, so to
speak, but rather to make them spend more often and to reach an even wider customer
base. For the latter purpose, suggestions such as advertising in newspapers or doing
focused Public Relations work would be effective options.
The “frequent restaurant guests” segment, on the other hand, is defined in a more
psychographical way with the defining characteristics being the segment’s frequent
restaurant visits and its openness towards modern technology and gadgets such as
smartphones. The age (20s and 30s) is also a defining attribute, though.
In conclusion, one group has already been proved to be attracted to R2N’s concept and
should therefore be prioritised further, while the other holds great potential as a
customer group. They are different, and should therefore be approached in different
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ways, but based on the survey, these are the two most important sources of future
growth for R2N.
Future research
As mentioned in the section about previous research, the industry for daily deals and
last minute booking at restaurants is very young and not much research has been done.
Therefore, it is a subject that has great potential for further research. In regard to this
paper, there are several things that could be interesting to expand on.
One research subject I would find particularly interesting is a study of how the discount
concept of R2N versus that of the daily deal sites affects the consumer's willingness to
spend. The two concepts are very much in opposition to each other (post vs. pre
experience payment, freedom of choice vs. fixed menu) and an examination of which
concept makes customers spend the most would benefit both the restaurants owners,
when making a decision on which concepts to run promotions through, and perhaps
also the companies using the promotions since they could market themselves to the
restaurants as having the concept that makes people spend the most money – that is, if
such a concept exists. The study could be carried out by conducting in-depth interviews
with discount customers of both types of concepts and short interviews with restaurant
managers – in order to get both sides of the story. Also the user segments of the
different daily deal sites would need to be mapped in order to differentiate between
them.
Other subjects that would be interesting to study could be:

As the demographic data shows, R2N has not attracted a particularly young
customer base compared to Groupon. An investigation and analysis concerning
the reasons for R2N’s older customers would be interesting.

An examination of how the discount concepts have affected buying behaviour as
a whole.

How these concepts have affected the restaurants.
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
It would also be interesting to obtain demographic data of the customers of as
many discount concepts as possible to see how they differ.
35713 characters
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Appendix 1
Brand positioning map depicting the positioning of the various competitors in the
industry. The positioning of the companies is the ideal state and not necessarily how it
is experienced by restaurant owners and customers.
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