MARKET AND COMPETITORS
MARKET
Desk research
Our business is in the field of leisure and entertainment. This market is flourishing. In the UK, consumer spending on leisure was in 27% in1995, 27.5% in 1999 and is expected to be 28.0% in 2004. Proportion of expenditure is different according to social class. (cf, Market Assessment International 2000, p23).
Our business is based on both catering and live entertainment. In terms of eating out, we have seen that people in Scotland prefer going to a restaurant rather than a public house or participating in sport., if they want to have a good night’s entertainment In terms of entertainment we can talk about theatre. On average, according to research theatre is quite interesting, but cinema is more appealing. Among adults, 54% prefer cinema and 44% prefer theatre. But three categories of people prefer going to the theatre rather than cinema: people between 45-50 years, between 55-64 years and over 65years. (UK Leisure and Recreation, 2000, 30). In Scotland, the figures are, 45% of the people prefer theatre, and 55% cinema (UK Leisure and Recreation, 2000, p 31).
In terms of eating out, people in the UK prefer to go to a restaurant in the evening rather than during the day. This needs re-wording 8.3% go to a restaurant in the evening 2 or 3 times a month, 19% go once a week and 0.8% do that more than once a week (UK Leisure and Recreation, p148).
The forecast for the UK eating and drinking market is £m 17.387 in 2002, £m18.250 in 2003 and £m18.500 in 2004. Therefore we can expect a growth in our business? (UK Leisure and Recreation, p152).
In terms of performances, concerts are also an interesting market. Some types of music are more appealing. In first place is pop/rock, then classical music and jazz.
The forecast for the theatre market is increasing from £m 420 in 2000 to £m 500 in 2004. (UK Leisure and Recreation, p 177).
As we have two activities, restaurant and entertainment, it would be really profitable if we could gather customers on both the restaurant and live entertainment markets. But we know that it is not so easy. We have to consider the whole market for restaurants and live entertainment, and think that only certain people would be ready for this. Some people really like to do things differently. This is why we needed field research, to know if people who like going to the theatre would be interested in having dinner.
Field research
This kind of business needs field research. Even if Edinburgh is a very cultural place where theatre, plays and concerts are plentiful, we have to be sure that some people would be ready to go to such a place.
That is why we created a questionnaire (cf Appendix 1).
The questionnaire is divided into four parts:
-Part one: did the customer dine? (And where?)
-Part two: the customer, the performance and the price
-Part three: our idea and the price the customer would be ready to pay.
-Part four: the customer profile.
We conducted the survey in three different places. The Royal Lyceum Theatre, the Traverse Theatre and the Queen’s Hall. We asked people these questions when they were going out of 3 different kind of performance:
-Performance for young public: “Beauty and the beast” by Stuart Paterson, Royal Lyceum,
-One-woman show : Olga by Linda McLean, Traverse Theatre,
-Jazz concert music hall : Mr. Mcfall’s chamber, Queen’s Hall.
These performances are the kind of entertainment we want to provide.
You can find the result in Appendix 2.
We also had interviews with the managers of these places. Indeed we had to have their agreement on what we were doing. They welcomed us and we talked about our business plan. They thought it was a good idea and some gave us advice.
TOWS ANALYSIS
COMPETITORS
We have a lot of different competitors. There are no direct competitors in Edinburgh, who provide a place where you can eat French food and have a live performance.
We have a lot of indirect competitors :
- restaurants, especially French restaurants,
- public houses,
- café bars,
- theatres and places of concerts,
- cinema,
- video,
So we have a lot of indirect competitors in Edinburgh. We made a list of the most direct competitors. We chose places which provide theatre plays, some jazz clubs and French restaurants. This list contains the name of the business, the location, the number of employees, the amount of the sales and the name of the manager or director. We found 25 competitors (thanks to the database for Edinburgh and Lothian at Scottish Enterprise). You can find the list in Appendix 5. We were most interested by small businesses with few employees.
TARGET CUSTOMERS
Thanks to the market survey and to desk research, we aim to target different kinds of customers. It depends on the time of the week:
- performances for children : schools who make outings with pupils, and parents who bring their children (level of incomes : £30,000 and more),
- small concerts, free entry : single people with colleagues or friends and who are coming out from work (level of incomes : from £10,000),
- performances at the week-end : people, single or married, with their spouse or friends or family (level of incomes : from £30,000, between 30 years and more than 60 years),
- one performance per month : people will pay to have both a dinner and a good performance (good review). We target the same customers as above. We also provide these evenings to some companies. Evenings will be organized for their employees or as hospitality events.
COMPETITIVE BUSINESS STRATEGY
Differentiation
About differentiation we can say that our business is quite a new concept in Edinburgh. Let us examine the difference :
- food while watching or listening to a performance,
- good value for money and French food,
- pleasant decoration, which will often change (we want to exhibit some paintings of local artists, which will not cost us),
- customers won’t need to go from one place to another. They will spend a good evening in one place,
- pleasant staff.
All these elements will help our business to be different in Edinburgh.
Positioning
The positioning is very important for this kind of business. We want our business to be seen as an inviting place for entertainment, where you can listen to good music and watch funny and clever performances. We don’t want “Le Petit Olympia” to be a luxury establishment but if one wants to have a good time one has to pay. We don’t want it to be considered as a cheap and unhygienic pub.
Competitive advantage
The main advantage of our business is that we are a small organization. We won’t be mistaken for a theatre. And another advantage is that it won’t be only a restaurant where you eat and then have to leave. Here you will eat, have a show and then have a drink without moving!
Marketing mix
Service
To provide ambience, we will emphasize the comfort of the room :
- padded chairs,
- layout of the chairs and the tables,
- efficient sound system,
- efficient light equipment,
- good ventilation of the building,
- reservation service : telephone.
Opening hours :
- Monday : 4:00 pm – 1:00 am
- Tuesday : 4:00 pm – 1:00 am
- Wednesday : 4:00 pm – 1:00 am
- Thursday : 4:00 pm – 1:00 am
- Friday : 4:00 pm – 1:00 am
- Saturday : 4:00 pm – 1:00 am
- Sunday : 4:00 pm – 11:00 pm
You will also find an example of monthly program of the performances we provide (Appendix 6).
Price
We choose to offer a price range depending on the situation of the target customers :
- tickets : all-inclusive price once a month :
∙ usual price : £20,
- food and beverages (cf forecasts).
The decision on pricing was taken according to the positioning we chose.
Promotion
Promotion is a key area of our business. We have to emphasize advertising and public relations.
We can use different processes.
- The development of relationships:
- with general newspapers, specialized cultural magazines.
- with local radio
- with local television
- Extensive billposting, flyers and programs in the street at strategic places (e.g. in tourism office, public billposting places, commercial centers, shops, firms, universities, schools.
Distribution
We will sell our service directly to the customer (zero level).
The location is really important for our business. We choose to establish our business in the city center of Edinburgh. That is where people tend to go in the evening. There would be too much risk locating out the center. We made the choice between the New Town and the Old Town because we thought they are ideal places for such a business. We found a premise that fits with our expectation. It is located in the Old Town (cf part Resources, Premises).
People
Staff is essential in our business. We have to choose the right people, so that customers will be happy to pay for the service. We made a profile of the type of tasks and skills we needed (see next section Resources, People).
We want to avoid staff time waiting so we will hire part-time staff when we forecast busy evenings (weekends and once in a month themed evenings).
RESOURCES
Money
Money comes from 4 sources:
- Owners capital: £6,000
- Retained earnings / profits
- Borrowing long terms loans to finance fixed assets: £60,000
- Sponsoring by firms (don’t appear in finances)
People
The new business will be a small enterprise at the beginning. It needs different skilled people to be able to be flexible because of the small number of staff.
-The artistic and administrative director will make the program and develop communication and advertising. He will also be in charge of welcoming artists, bookings, customer care and staffing.
-One full-time barman manager to be responsible for drink and food stocks, and bar service,
-Two part-time barmen to welcome customers, serving and the housework,
-One full-time chef for special evenings with dinner and performance,
-One full-time technician for lighting, sound, stage-sets, decoration, and both generally and for performances,
-Two part-time assistant technicians.
Premises
We have chosen to run our business in the Old Town city center where cultural activities are the most numerous.
We need to find a catering establishment/pub/restaurant for renting at the outset. Its maximum capacity will be around 150 people for dinner and performance.
Its size will be average1500 square feet :
-600 sq. feet for bar, kitchen and stage
-900 sq. feet for the dinning room
We selected a site on the list given by The Scottish Enterprise Edinburgh and Lothian: it’s a catering/ pub/ restaurant
GRAIGS CLOSE
29 Cockburn Street
EDINBURGH
EH1 1BP
Area: 1507 square feet
Price: £250.000
Rent: £24.000 pa
For lease or sale.
GRAHAM and SIBBALD
EDINBURGH
Tel : 0131 225 1559 Fax: 0131 226 3754
The site will be organized to run cabaret acts and, theatre within an area containing dining room, a bar and a stage for performances. The site will be decorated in a special touch of “30”.
At beginning the site will be rented. When the business is up and running successfully, we hope to buy the site.
FINANCES
The majority of our turnover is weaker at the beginning of our business. Therefore when we begin our activity, we are not really known. But then on average between 6 and 12 month the financial situation is better for many reasons. The first reason is that as we have a campaign of promotion with flyers or posters in town people begin to know us. The second reason is that some persons who come in our cabaret and who are seduced by this place come with some friends; these friends do the same thing. The third reason is the Edinburgh Festival. Therefore this reason is real because during this festival a big number of tourists come in Edinburgh and go out in the evening. We can give some other reasons such as a better and better reputation or artists always more known.
Also as sales increase in the time our costs grow too. This is the reason of the increase in direct costs: we sell more and more so we need more a more raw materials.
For investments the totality is done at the start of the business. They are important but the more expensive is the sound and light material. A simple mix table with 24 entries costs on average £3000 or a play of lights costs £500 or £1000.
Furthermore, we don’t buy a premise so we have to buy all the equipments such as cutlery or tables and chairs.
These are our tariffs for drinks and dishes:
1 entry for performance = £8
The following documents show the figures of the three next years. You can find the detailed figures in Appendix 7.
APPENDICES
