#horizontalsegmentation

I recently watched a TED talk by Malcolm Galdwell, the author of the Tipping Point, Outliers, and a few other NY Times best sellers. The title of the talk was tagged as "Choice, Happiness, and Spaghetti Sauce." The mere fact that the Spaghetti Sauce was included in the title intrigued me as it stuck out well. 

http://www.ted.com/talks/malcolm_gladwell_on_spaghetti_sauce.html

In the video, Galdwell focuses his talk on the well renowned psycho-physicist Howard Moskowitz. He introduces the concept of horizontal segmentation amongst consumers.  In a nut shell, he explains Moskowitz theory of introducing product variability for major food brands focusing on embracing the diversity of consumer choices. Ultimately what he was trying to explain was that often as the consumer, we do not know what we want until we taste/see/touch the product in front of us. So, often we go to restaurants not knowing what we want or what we like until we are introduced to the product in front of us. From there we either embrace it or reject based on our own pre-defined preferences. 

Gladwell uses the coffee as a prime example as he states that people typically will state that they like a "strong, bold, rich coffee" when asked what type of coffee they like. However, in reality, people typically prefer a "weak milky coffee". What this proves is that we don't know what we truly want until we have been given options and can choose from a variety of options find our optimal level of happiness through choice. It is a simple concept that often gets completely neglected by most restaurants and stores and in some cases mastered. 

Going back to Moskowitz theory of food, we shouldn't think that there is one optimal choice which consumers will stray towards. As people, we all come from different backgrounds of which we are influenced from different environments which influences to have different choice preferences. So, in essence, there are  wide range of preferences of which we fall into but can still be grouped under. 

Applying this theory to the current restaurant industry, a few stand out fairly well. Chipotle and 5 Guys. More focused on Chipotle, but both have shown a great deal of success as franchises. Looking at Chipotle's product, Mexican food, they don't necessarily stand out as the best quality Mexican food. In fact, I would question if the preparation of their ingredients even that close to authentic Mexican food.  In any case, the success of Chipotle has been mainly driven by their business model. If you go into a standard Mexican retaurant and order a Burrito you will probably get to choose the meat, have some beans in there as well as rice cheese maybe a few other ingredients. For the most part you can customize your food, but nothing to the degree of Chipotle. I am not trying to praise Chipotle for their food but more so use their model as a basis of comparison. When you get to the front, you have all the ingredients in front of you of which you can add an subtract and double to your liking. You can choose white rice or brown rice, black or pinto beans which, chicken or beef, corn salsa, etc.

The point is that you can see what goes into your product and for a  consumer that is instantly gratifying because it's not pre-made so you don't have to conform to something you may not like. Instead, you have been given the choice to create your own finished product to your liking based on your preferences and choice. Not only does this engage the consumer to be more interested in their meal, they feel as they contributed towards the preparation of that meal. 

When you step back and look a Chipotle amongst other Mexican restaurants, it doesn't seem to stick out that great. But when you look at the level of success they have had, the numbers are insane. In just the past 2.5 years, the Company has grown 300% going from a little known brand to be as well known as Starbucks (at least in California). Why? Because they gave the consumer the choice and provided them with many options to put their personal touch on their final product. 

The other example is 5 guys burgers, of which I wont talk to much about but just to provide a 2nd example. If you look at the burger and presentation, the product is somewhat average. The thing that stands out really is that they allow their customers to add as many ingredients in their burger to their liking. Once again, the customer has been provided the choice to decide what they truly want.