Customer Segmentation Meets Strategy: Unlocking the Competitive Value of Natural Products in Hospitality Industry

Abstract

Restaurants and their customers value natural food products (NFPs), and demand for them is growing steadily due to product qualities such as taste and freshness, as well as support for sustainable development. However, the availability of natural food products from suppliers can be challenging. Availability challenges mean that the market for natural food products is inefficient. This also makes it difficult for restaurants to define their competitive strategies. Local restaurants are often small, entrepreneur-driven businesses with a few dozen employees. In small restaurants, resources are spent on daily operations, and systematic long-term development is often given less attention. However, systematic operations require clear, planned customer segmentation and, through this, the development of competitive strategies as a means of creating value. The main objective of the study is to increase understanding of the link between customer segmentation and competitive strategies in business and the added value they generate. In addition, the study aims to guide restaurants towards more systematic business development. The data was collected through qualitative research and in-depth interviews with restaurant owners and managers in Finland. The research was based on thematic analysis, and the results were documented using NVivo software. Restaurants were found to have insufficient knowledge of how NFTs can be used to create value-added business and how customers can be segmented using competitive strategies.