Developing a small business - German pub 'Stammtisch'

Table of Contents

1 Executive Summary

2 Introduction

3 Market analysis
3.1 Market characteristics
3.2 Market potential
3.3 Customer analysis
3.4 Competitor analysis (primary/secondary)

4 Segmentation Analysis
4.1 Demographic
4.2 Geographic
4.3 Psychographic
4.4 Behavioural

5 Unique selling point (USP)

6 The Marketing Mix
6.1 Product/Service
6.2 Price
6.3 Promotion
6.4 Place
6.5 People
6.6 Process
6.7 Physical Evidence

7 SWOT
7.1 Strength
7.2 Weakness
7.3 Opportunities
7.4 Threat

8 Conclusion

Bibliography

Appendix

1 Executive Summary

London has the highest disposable household income per capita in UK^[1]. Due to this fact it can be expect that the going-out culture is large.

The following report is based on a concept to open up a pub that would different from competitors. It will combine a traditional German-pub and Sport entertainment. This business is an absolutely new concept and missing within London. The location should be a contact point between the cultures and will be located in Central-West-London.

Results indicate that this business has the prospect to develop and maintain adequate demand in the niche market.

2 Introduction

The report shows an analysis of the market in which ‘Stammtisch’ wish to enter. In the pub-sector in London is much competition, therefore the business focused on the German-community. According to the ‘German Foreign Office’^[2] are living about 60.000-80.000 Germans in Greater-London. For this potentially niche market it is necessary to discover if such a pub interested for English people as well.

3 Market analysis

3.1 Market characteristics

The pub/bar market has much competition especially in Central-West-London.

According to Mintel^[3] the amount of all UK pubs is 71,000. Within this figure the share of managed venues which are owned and managed by the same company is evaluated as 60% and the rest of market share 40% are independent. Making a distinction, the managed and branded venues located on so called High Street amount to 2,700 venues across UK (Table 1).

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Table 1: High street pubs/bars market size trends, 2000-04

High Street pubs/ bars are defined by their location. Because ‘Stammtisch’ will be located in this area the research is mainly focused on the High Street pubs/bars.

The most of the venues are geared toward young people, including students as they are claiming the most market share (more details in ‘customer analysis’). The most pubs offer many entertainment programs (e.g. football matches, karaoke, quizzes, theme DJ evenings etc). According to Table 1 the amount of venues peaked up in 2002 whereas growth of turnover peaked up in 2001 (value growth of 21%) and growth then declined to 11% in 2002 and it will be expected at £2,7 billion in 2004.

Mintel^[4] has divided the market into three groups of themes, encompassing:

- National themes (e.g. Irish)
- Sports themes, either generally using sport or for specific sports
- Entertainment themes, a broad category but mainly dominated by music themes

Table 2 shows the breakdown of the themed pubs market in terms of sales.

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Table 2: Segments of themed pub/bar market, 2000-03

The national themes which have the most sales in the pub-segment, contributing 57% of the total revenue generated. Sport themes, the second most popular genre, constitute 29% of the market share. Other themes, including movie and music themes, only generate 14% of total sales. However, a number of key players such as Luminar Leisure and Ultimate Leisure are keen to expand other themes.

The business of ‘Stammtisch’ would to belong between the themes Sport and Others.

3.2 Market potential

The area Inner-London had in 1999 an average GDHI (Gross Disposable Household Income) per capita of £12,935 (highest GDHI in UK), which was 28% above the UK average^[5].

Further the situation in 1999-2002 showed a gross weekly income of 711 GBP, it was 186 GBP higher than the average for the UK^[6].

If people have a high disposable income it can be expect that they spend more money for food, drink, lifestyle and going-out.

[...]

^[1] www.statistics.gov.uk , 2002

^[2] www.auswaertiges-amt.de , 2005

^[3] www.mintel.com , 2004I

^[4] www.mintel.com , 2003

^[5] www.statistics.gov.uk , 2002

^[6] www.statistics.gov.uk , 2003I