small town 4000 people with no comp. or big town 15000 people with alot of comp.
small town become a part of the community and make freinds build a relationship
big town get lost in the shuffle and spend lot in initial mktg
I would take the no competition small town.
Small town hands down. Plenty of personal ‘touch’ opportunities to build that warm fuzzy/high return kinda thing. Plus like Dennis was saying, my town (3500) was ready and waiting at our door when we opened. Their initial response has made it possible to spend ZERO on marketing for our first 4 months. We were able to take the money which was allocated to our “opening” marketing effort and will now roll out a much bigger mid-summer campaign including local network and cable TV. Then best news is, that initial surge of excitement, while slowed from the all-out frenzy stage it originally was, is STILL present. 100% of our ad monies are targeting surrounding communities to build our reach!
Small market with no competition. That’s about what your “share” of the market would be somewhere else anyway, but so much easier to work in.
A small town may not give you the volume you need to make an acceptable profit…It all depends on what you are looking for…
Hm. 15k is a “big town”? I would say that is a nice small town too. I think 4000 maybe too small?
Think about it like this: what do you anticipate your top & bottom yearly sales figures to be? Divide that number by your average estimated ticket price. Divide that number by your average number of guests per ticket. Now you have an estimate of the number of guest you will host in a year. Divide by 52 & you have the average number of guest per week.
Now, analyze a little. Is it practical to expect ______ number of guest in a town of 4000?
For instance, let’s say you need 2000 people per week to hit your sales goals, can you honestly expect half the town to dine with you every week?
In our market I know that if everyone in the town dines with us 5 times in a year, we will hit our top sales goal. (I realize that many are repeats & some wont ever visit, but it is just something to practically think about to see if you are in the ballpark of reality.)
I think a town of 50k+ is more likely to be lost in the shuffle. We are about to open in a town of 27k. I haven’t even advertised yet & the town is buzzing w/ anticipation.
Part 2: Market Analysis. You said that there is a lot of competition. Do some formal surveys. Try to get 10% to 15% of your market. Where are they going for pizza? Are the satisfied? What are things they would do differently, etc. Be sure to let them know that you are coming to town. Give survey participants a pizza or logo tshirt (don’t do discounts because you communicate that your product is not worth what you say it is). Take the data and hit the hot button issues (ones that repeat) in your initial ad campaign. Also use the data & yourself to differentiate your brand.
In our town of 27K, there are 4 national chains & 4 independent operators, but we have been able to differentiate our product & service so well that the town is about to flip their lid to get us to “hurry & get open”. I tell them the delay is on the build out, but I must confess, we are creating a frenzy through anticipation!
I hope that helps. Good luck!!
Over the many years we have been equipping pizza shops our client’s experiences indicate :That if you open in a small town and are successful you will soon have one or more competitors.