Marketing Strategy That Helped 'In-N-Out Burger' Succeed in its Niche

Businesses use market segmentation to narrow their focus and better serve their customers. There are two main concerns before choosing a target market and a market segment. Two questions must be answered for a company to succeed in the long run: (1) how to divide the market and (2) how to choose the target market.

Before getting into the specifics of how to segment the market and choose your target audience, know that the fundamental idea of segmentation is to pick the subset of the market that offers the greatest potential return for your business. Clientele and rival businesses make up the two sides of any market. Find the niche where your product or service has a competitive edge over the competition and where you can turn casual browsers into paying consumers. To succeed, you must first divide the market of unsatisfied customers and your rivals into distinct subsets. By dividing the market this way, the firm can more easily find a niche. Even if the company has a negligible share of the overall market, by carefully segmenting and selecting its target market, it can become the dominant player in that market.

After reaching success in the chosen market, the next step is determining the course of action for future expansion. Establishing a growth strategy is an integral aspect of expanding into other markets after initial success in the one you're targeting. Small and medium-sized businesses are often the stepping stones to larger firms (SMEs). Small businesses have the potential to grow into giant corporations, but this depends on how well they manage their target markets and develop and implement growth strategies. On the other hand, many businesses are being forced to shut down because they violate market regulations.

There are several strategies for expansion, but one that has proven successful is IN-N-OUT BURGER's ability to serve its existing customer base while expanding into new areas. Seventy years ago, In-N-Out Burger opened with one location. Today, the fast food chain operates more than 380 locations, employs more than 27,000 people, and generates more than $1 billion annual sales. Explain the meteoric rise to fame of 'In-N-Out Burger,' one of America's most beloved fast food chains.

In 1948, Southern California natives Harry and Mary Snyder founded a burger business in Baldwin Park. In-N-Out Burger is the name of the establishment. When I first started out selling hamburgers, there were a lot of formidable rivals. To keep expanding despite having fewer resources at its disposal than its rivals, "In-N-Out Burger" adopted a number of operational tactics that set it apart from the pack.

In the first place, the burgers at "In At Out" were always guaranteed to use only the freshest ingredients. Following this norm, we sourced as many of our products as possible from within a short driving distance, and we cooked everything from scratch every day, right down to our hamburger buns. Also, beef for patties is only refrigerated and never frozen, and it must be delivered to the store within 48 hours from the distribution center. The Snyders saw an unmet demand for this level of novelty in the market and set out to satisfy it. Before or since no other hamburger chain has come close to matching the quality of In-N-Out.

Second, "In-N-Out" was the first firm to introduce the Drive-In system due to having very few people and resources to work with. The success of this strategy can be seen in the establishment of the chain's second and third stores, both of which provide excellent customer service. Additionally, "In-N-Out" has always been adamant about remaining a privately held business and has never adopted a franchise business model. The reason for this is that maintaining a consistent standard of quality and providing the highest level of customer service requires complete dominance over the organization.

Third, the Snyders made a concerted effort to keep things running well in the store by getting along well with the staff. It fostered a work environment where employees and superiors felt like they were a part of one big happy family. Among the many exciting things about In-N-Out is the fact that three of the original employees from 1948–1950 are still with the company as of 2010. The Snyders' outlook on business has been passed down through the generations, and In-N-Out continues to have the longest average tenure for its executives and workers in the fast food industry.

The Snyders placed a premium on repeat business from their existing clientele (point #4), and they made it a point to check and double-check everything that may make their clients happy, then carefully evaluate the outcomes. In particular, the product manufacturing technique, developed by founder Snyder with an emphasis on quality, is revered as the "In-N-Out Bible" and kept locked away in the corporate vault.

'In-N-Out' used its own special kind of expansion to keep expanding. The fast food chain "In-N-Out" decided against expanding by opening new locations in favor of a more methodical development based on the maximization of sales at current establishments. Customers' undying devotion and recommendations fueled this strategy toward expansion.

As a fast food chain, In-N-Out is unusual in receiving high marks for its commitment to employee wellness and health. Moreover, well-known chefs like Julia Child and Anthony Bourdain spread the word about 'In-N-Out Hamburger online. As a result, the unveiling of the first "In-N-Out" restaurant became a major news story in the area. A good case in point is the opening of an In-N-Out Burger in Scottsdale, Arizona; consumers waited in line for four hours, and TV helicopters filmed the event from above the parking lot.

Despite receiving high marks from consumers and having an edge that rivals can't match, the strategy of serving only freshly made burgers with excellent service is also a shortcoming that slows the company's expansion. This is because there is a need for more patties made from fresh beef due to distribution constraints caused by the need to keep the meat cold. Shipping beef for patties to retailers in a timely manner (within 24 or 48 hours from the distribution center) is difficult due to numerous obstacles. So far, In-N-Out has only expanded to six states, and the vast majority (69%) of its 380 restaurants are still located in California. On the other hand, while considering the reasons why many businesses have failed in the past, "In-N-Out" might serve as a valuable lesson.

Author: Choonghwan Park, Previously Held a Position at USC as Chair Professor