Consumer and industry trends in the pub industry - Essay Example

MARKETING BRIEF Research consumer and industry trends in the pub industry and comment on any developments. London is faced witha changing beer market. By the late 1990s, beer sales in pubs nationwide were flat. This situation is expected to worsen as the local population aged. The demographic segment responsible for 65% of beer consumption, males 19 to 34, was shrinking. Another factor which is responsible for the market's softness was the public's increased awareness of the advantages of healthy and responsible living. All this led to a flattening in the consumption of alcoholic beverages. Hence, the pubs had to respond to a change in consumer tastes. Based on the data of the British Beer & Pub Association, in the last 10 years food sales in Britain's 30,000 managed pubs have risen by 165%. In the 30,000 smaller tenanted pubs, the increase is deemed to be lower but it is regarded as substantial. Some 80% of all British pubs now offer food compared with about half in the mid-1990s. For example, a spokesman for Mitchells & Butlers (M&B), which operates about 2,000 pubs stated that food sales at M&B are expected to overtake sales of beer next year. John Hutson, chief executive of JD Wetherspoon, which has converted 50 of its 600 pubs to non-smoking venues, said he too expected to lose smokers to non-food pubs. Chief Executive Ralph Findlay of Marston's stated that pub goers were tucking into menu staples like fish and chips and steak pies like never before. A government smoking ban which came into force on July 1,2007 had also affected pub revenues. The English pub industry, which has been rapidly expanding its food trade in recent years, has called the government's health bill exempting non-food pubs from a proposed smoking ban as "unworkable and grossly unfair." Patricia Hewitt, the health secretary, has abandoned her efforts to include provision for smoking rooms in pubs in the public health bill.Pub industry leaders said they feared such an exemption would provide a setback to the progressive trend in the number of public houses offering customers a balance of food and drink. The Portman Group issued this statement: "We strongly believe that alcohol consumed with food is much more responsible. We feel quite strongly about that." Ted Tuppen, chief executive of Enterprise Inns, which owns more than 8,000 tenanted pubs, has advocated for separate smoking rooms in pubs. He pointed out that the huge numbers of rural pubs provide a great service for their local community by providing a bit of food and a bit of booze. He said the proportion of liquor-led pubs likely to qualify for the exemption was higher in less affluent parts of the country, suggesting the bill would lead to a widening in the health gap between rich and poor regions of England. A second exemption for 20,000 private members' clubs only emphasized the disparity between rich and poor pub goers. Only Punch Taverns which has 8,000 pubs operates as non-food pubs, catering to smokers. Most pub group's profits from cigarette machines are negligible, though the proportion of pub-goers who smoke is estimated to be 45% to 50% which is twice the national average. Within the UK market, key regional and smaller local breweries are in fact enjoying volume and value growth of two per cent. This is the finding of a recent report commissioned by some of the UK's leading regional breweries; Everards, Marstons, Adnams, Greene King, Wells & Youngs, Fullers and Caledonian. After a decade of British pubs being turned into trendy, continental style bars, consumers are seeking out the more traditional pub where they can order a real pint of English ale. A number of factors and initiatives from the breweries are contributing to the return of the 'pie and a pint' type of pub experience. As well as providing smoking solutions or shelters, licensees and breweries have endeavoured to make their pubs places where more people will want to go to spend their leisure time. These include post ban re-decoration and refurbishment, 'deep cleaning' of the pub's soft furnishings, improving and upgrading menus and provision of coffee and tea at the bar. The smoke-free life style has brought several groups of people back to the pub. For example with the 35+ age group, are now returning to the pub to enjoy food and drink in a clean, fresh and healthier environment. Consumers of this age group who tend to drink cask ale rather than lager, 'designer' ciders and alcopops. 2. Explain how segmentation criteria can help profile two consumer segments for Hopinns. The first segment of the market are the entry level beer drinkers male and female, aged 19 to 24. This strong customer focus will shape the marketing strategy. For instance, the use of music focuses on the specific range of style. The beer drinking population is male and female, 19 to 24 years old and they are urban and from middle socio-economic groups. For these two market segments, drinking is essentially a group activity, and therefore the choice of drinking establishment was heavily influenced by group pressures. The advertisement of Hoppins pub will be clearly aimed at the younger student and young professional market. By successfully targeting this segment, Hoppins pub can turn its brand equity over to a very loyal segment of the young adult beer-drinking market. There is a need to link the advertising to then increased sales volume. The specific marketing objectives of this segment is to raise Hoppin pub's penetration of the 19 to 24 age group and become the dominant pub for this market segment. The goal is to become the leading pub in London for entry level drinkers by 2009. The main marketing strategy will focus on making Hoppin pub's beer relevant to entry level drinkers and female drinkers. The main communication strategy is to communicate with the target group through focused and relevant messages that were sensitive to social context and aspirations.The aim is to build an image that the beer brand is unique, strong, and distinctive. The second segment is the female drinkers market ages ranging from 19 to 24 years old. Research studies from the Campaign for Real Ale (CAMRA) suggests that 8 out of 10 women have never tried real ale in a pub. CAMRA feels that brewers and pubs should consider targeting their marketing at women drinkers. Women do not know what real ale is. Real ale is a type of beer defined by its traditional production. It is known as "cask conditioned" beer. The main distinction between real and other ales is that the yeast is still present in the container from which the beer is served, although it will have settled to the bottom and is not poured into the glass. CAMRA is calling on brewers to make beers more appealing to women in its campaign to revitalise the real ale market. About 25% of CAMRA's 87,000 strong membership are women. CAMRA's Chairman Paula Waters mentioned that beer is mostly marketed at men, and therefore there has been very little to interest women. Waters suggested that if breweries and pubs were to involve and educate women drinkers then they can tap into a massive market and expand the market. The Hoppines pubs must win over women drinkers - only 14% of whom drink beer in pubs, compared to 36% who drink wine. The BBPA think female drinkers are put off by pints and halves so the BBPA wants to see beer served in elegant, long-stemmed, third-of-a-pint glasses. Brewers should realize that women nowadays have a distinctive purchasing power. According to Marti Bartellata, women buy for themselves, their families and their businesses. Women are the gatekeepers to the household expenses. Women nowadays earn more and spend more. Their buying power constitutes more than 80 percent of the total household spending. Women consumers are also more profitable per marketing dollar invested to target this market. If brewers target the young female drinkers now, these consumers will soon be able to establish brand loyalty in beer and ales. They can also influence family purchases later on. Ale tasting sessions will also help boost sales to the entry level drinkers. Cyclops will revitalise the real ale market by enticing younger drinkers, both male and female to try our national drink. They will quickly learn to appreciate its complex flavours and they will become enthusiasts. The new scheme is called 'Cyclops' due to the one eye, nose and mouth imagery used on the promotional material. Hopinns pub can tap 14 real ale breweries from across Britain. The 14 breweries are: Everards (Leicestershire), Wolverhampton & Dudley Brands (National), Woodforde's (Norfolk), Camerons (County Durham), Hook Norton (Oxfordshire), Fuller's (London), Refresh UK (Oxfordshire), Robinson's (Cheshire), Hall & Woodhouse (Dorset), Elgoods (Cambridgeshire), Wadworth (Wiltshire), Titanic (Stoke on Trent), Charles Wells (Bedfordshire) and Caledonian (Edinburgh). In marketing to these two segments, emphasis should be given on the fact that beer is less fattening than wine. According to the BBPA, a glass of beer with a typical 4.6% alcoholic volume has fewer calories than a similar measure of wine, but also milk or fruit juice. Research into drinking habits has found that beer's fattening reputation has more to do with the lifestyle of those who drink it particularly the greasy bar snacks that often accompany a night down the local pub. Beer is an appetite stimulant and it's the fish and chips or curry that round off a night with a few pints that puts the weight on. 3. Explain how the key elements of the marketing mix (4p's + p's for services, people, process and physical evidence) can be refined to meet different customer needs. The Hoppins pub can focus on marketing beer and ale to their young consumers. Hoppins can implement this marketing mix. PRODUCT The typical core beer consumer takes brand choice very seriously. He views his chosen brand as a badge that identifies who he is, or who he aspires to be. Once he has selected his brand it is very difficult to get him to switch. While taste is the final test of a beer's acceptability, psychographic research has proven that the greatest determinant in a consumer's selection of his beer is the brand's image. That image is established through advertising. The typical consumer preferred cold beer in comfortable surroundings. Long-run success required tough strategic choices. British pubs can increase sales volume in their beers in two ways. It could attract female drinkers, or slowly build a new market by attracting entry level beer drinkers which is the young male adult segment of the market. Entry level beer drinkers were members of 'Generation X'; consumers who rebelled against the norms and images of Canadian's existing consumer. PRICE Beer costs should be very competitive vis--vis other London pubs. Hoppins can focus on discounts for high volume purchases. PROMOTIONS Using the demographics and lifestyle of the target group, a broad cross section of media is selected to reach young adult Canadian beer and ale drinkers. The media selected are the traditional television to promotional calendars. The campaign began on television, but print media was element. Radio will be used to maintain brand prominence in the young adult's life, but was not as creatively effective as TV or print. The visual aspects of the campaign proved essential to getting the message across and television will be the main vehicle for that reason. Hoppins sales force can play an important supporting role by ensuring that all collateral materials associated with the campaign are distributed and displayed. PLACE Hoppin's pub undergo renovation to cater to a young male and female adults which are its primary target markets. The pub can sponsor a program of rock concerts. Rock music can support the beer and ale brand's relevance and credibility with the target group. Hopinns pub can offer access to local smoking cessation services. The pub can invite two to three health visitors who can prescribe nicotine replacement therapies and a smoking cessation advisor who can go every night at the pub to help the young drinkers to quit their smoking habits. In addition, Hoppins can introduce a 24 hour drinking service. The real draw of the pub should be the fantastic drinks that they take enormous pride in. There should be rules. When customers book a table and they show up late without calling the staff can give the table away. The pub has rules because rules create a certain atmosphere. If you joined is because you liked the atmosphere then the atmosphere can be maintained if everyone follows the rules. PACKAGING The Hoppins pub will choose beer and ale that are colorfully packaged and attractive to young drinkers. Painted labels are preferred. PROCESS The pub can sponsor several educational sessions on beer and ale drinking. For instance, the improved sales of real ale can be attributed to the level of innovation from regional brewers which are bringing drinkers back to the cask product. Breweries have been doing their utmost to develop new styles and flavours of cask ale which will provide the variation and spark today's consumer is seeking. In addition, Hoppins pub can invite major beer brewers to offer several free tasting sessions for their whole range of products. PEOPLE The marketing staff of Hoppins pub must be knowledgeable with beer and ale products so that they can easily recommend brands to the new drinkers. They should be able to offer discounts to group purchases and regular drinkers. The door staff should be amiable, courteous and hospitable to entice the young crowd to the pub. PHYSICAL EVIDENCE The pub can have a set theme every month which should be shown in the website, decoration, signage and clothing of the pub staff. During holidays, the pub can put up the appropriate decorations around the venue. The monthly special features can also be related to the set themes. The key success factors to this marketing mix are the sensitivity to the consumer and unique execution style. Sensitivity to the consumer is shown in preparatory and ongoing consumer research identified what is important and relevant to the entry level drinkers who are the target group. The unique execution style consists in the focus on classic rock 'n roll music, and young lifestyle target group effectively created an image for Hopinns pub that has made it an integral part of fun social occasions of young beer-drinking British adults. DISTRIBUTION CHANNELS The Hopinns pub market has a very high level of on-trade consumption, that is drinking out of home in bars or other drinking premises. This on-trade consumption took place in basic bars with limited decor and seating arrangements. Such bars were owner managed and stocked a variety of beers, were open long hours, and aimed to achieve the maximum volume of sales to the clientele. The average Hopinns bar outlet served 4 or 5 competitive beers. 4. Produce a table showing how the mix might differ for two different segments for Hopinns customers. 7PS MARKETING MIX MALE ENTRY LEVEL DRINKERS FEMALE ENTRY LEVEL DRINKERS Product The practice of buying rounds in the pub is one of the great British institutions. Hopinns pub should offer discounts for volume purchases for young drinkers to enable these drinkers to make their own to make generous gestures. It will enable them to portray their individuality in their choice of drink, and it causes affection progressively to mount in the circle of drinkers, by giving each in turn the character of a warm and hospitable friend. Female drinkers want to create their very own real beer and ale drinks by finding out what beer styles, colours, smells and tastes they prefer and know how bitter and sweet they like their beers. Once they have prepared their drinks, they can share it with their friends. They want to savour the taste and want to enjoy the different aromas and flavours of their beers and ales. Place They prefer a variety of cold beer in comfortable surroundings. They prefer a quiet and peaceful atmosphere while drinking their cold beer. Promotions Rock concerts, special performance guests and hip-hop tunes are appealing to them. T-shirts, caps, car prizes and travel trips prizes for raffle promos for volume beer purchases at the pub. Downloadable tunes and chat rooms in the company websites appeal to them. Free beer and ale tasting sessions will help them consume more and develop brand loyalty. Health advisors who can help them to quit smoking are helpful to get them to come back t o the pub. Travel prizes as raffle prizes for volume beer purchases appeal to them. Pub dating programs will appeal to them. Price Competitive price of beers and ales will attract them. Discounts for volume purchases attract them. Competitive price of beers and ales will attract them. Discounts for volume purchases attract them. Process They are attracted to the painted labels on beer and ales. They are attracted to the painted labels on beer and ales. Physical Evidence The pub should be clean, comfortable, safe and friendly. The pub should be clean, comfortable, safe and friendly. People The pub staff should have the training, appropriate interpersonal skills, aptititude, and service knowledge to provide the service that consumers are paying The pub staff should have the training, appropriate interpersonal skills, aptititude, and service knowledge to provide the service that consumers are paying 5. Explain how product life cycle theory might be helpful to affect product/service provision and planning in the Leisure industry. Theodore Levitt states that a company seeks ways to grow future cash flows by maximizing revenue from the sales of products. Cash flows allows it to maintain viability, invest in product development and improve its workforce. The first stage of the life cycle is introduction of the product. When a beer product is introduced, the company invests heavily in product development, marketing and promotions to the specified target market. The company establishes a clear identity and maximum awareness of the product using tri-media resources particularly television. The second stage is the growth stage. The beer product competes with other new beer products. Sales grow and marketing efforts are sustained by the company. For products and services in the leisure industry, the company must set high revenue and sales targets during the second stage of the product life cycle so that they can recoup on their research and development expenses in the first stage. The excess revenues can be channeled to develop auxiliary or complementary products to the existing successful products. The third stage is the maturity stage. Competitors leave the market and sales of the beer reach a steady and consistent volume. The company still derives revenues and income from the product. The fourth stage is the decline stage. In this phase, the beer product is overtaken by a new product offering. The target market has grown old and their tastes for beer have changed to other brands. Unfavorable economic conditions further affect sales. Eventually, the product is removed from the market and is abolished. Works Cited Books Bartletta, Marti. Marketing to Women: How to Understand, Reach, and Increase Your Share of the Largest Market Segment. New York: Kaplan Business, 2002 Warner, Fara. The Power of the Purse: How Smart Businesses Are Adapting to the World's Most Important Consumers-Women. New York: Prentice Hall, 2005. Journal Articles Bowers, Simon. "Smoking ban is unworkable, says pub industry." The Guardian. October 28, 2005: 1. Levitt, Theordore. "Exploit the Product Life Cycle". Harvard Business Review. Volume 43. Novermber-December 1965: 81-94. Martin, Andrew. Class Conscious: "Take Away the Pub and You're Left with Middle-Class Activities like Italian Classes". New Statesman. Volume: 133. Issue: 4704. September 6, 2004: 63. Scruton, Roger."Roger Scruton Mourns the Demise of That Great British Social Institution-The Village Pub". New Statesman. Volume: 135. Issue: 4807. August 28, 2006:24. Website Campaign for Real Ale. 12 January 2008 < http://www.camra.org.uk>. Read More