Understanding your market
A pub can no longer assume that the pub is the default choice when it comes to leisure time.
For example, it is perfectly plausible for someone to abandon the traditional pint and a pie down the local in favour of a banana-flavoured latte and a slice of carrot-cake at the local building society.
Every town centre is now home to an increasing number of coffee shops, continental-style cafés and restaurants (not to mention cinemas, shops and health clubs) that pose a serious threat to a licensee's profit and loss sheet.
Pubs need to look at who their main competitors are, both at lunch and in the evening, before accurately identifying their target market and catering for them accordingly.
Case Study: the ship, croydon, south London
Few pubs illustrate the challenges currently facing the licensee as well as the Ship in East Croydon, South London.
Situated on a main high street and surrounded by offices, competition is rife with a cluster of sandwich bars, numerous cafés and sandwich bars as well as a bustling street market selling food at knock down prices all within 500 yards.
A recently built multi-leisure complex opposite, containing Babushka, Lloyds No 1 and Edwards among others, means that local workers and residents are not short of choice when it comes to eating and drinking.
However, the Wizard Inns pub has more than held its own by emphasising its community role. In an effort to set the pub apart from its new neighbours, manager Esther Sutton has stepped-up the number of pub events (a Monday night quiz, regular DJs that take requests), installed a range of unusual ales and improved food sales by concentrating on the specials she creates and paying extra attention to presentation of dishes.
Market forces
Understanding your market is not just about attracting new customers to your pub. By Peter Segal of srcg, a consultancy specialising in retail strategy, category development and training.
There is no doubt that pubs face increasing competitive pressures from an ever changing market place. Restaurants, coffee shops, bingo halls, you name it, they are all out there making noise and influencing pub customers. Urban areas will be directly affected more than others but the impact is surely far wider. The customer is now aware that he or she has options.
How often do we find ourselves choosing between this pub or that pub, or this pub or that restaurant, or even this pub and that sandwich shop. Most telling of all is the competitive threat from multiple grocers and the trend towards drinking in the home. We need hooks, we need the pub to say come to me because we do this better than anyone else around here. In order for pubs to reach the customer amid all this noise they must seek to have a clear customer message and in order to do this they must seek to understand their market.
How can this understanding be gained? There are three information or knowledge areas that can help: the customer, the market place and, of course, the pubs own information. This may sound like information overload but it doesn't have to be.
For independent pubs this could simply mean talking to customers and getting their input to new initiatives, going out to the competition and identifying gaps in their offer or looking at bar takings and making decisions based on the facts. A local pub may argue that even with this information it is unlikely that it will draw new people into the pub from outside.
However, understanding your market is not just about attracting new customers, it can enable you to better meet the needs of current customers. Can I extend lunchtime? Can I get people in earlier? Can I get people to trade up? A little bit of information can be the stimulus you need to try new things.
For multiple pub operators understanding your market takes on greater complexity as there is more than one market to consider. Many operators have segmented their estate in an attempt to group together pubs that appear similar against a set of criteria that might include location, local demographics or size to name but three. While this is a very positive step, retailers across all channels, and I include the likes of Tesco and Asda, know only too well that to truly meet customer needs it has to be done at a local or micro level.
To achieve this, pub companies have to collaborate not just with the pubs themselves but also with their suppliers.
This is crucial. The more forward-thinking suppliers to the on-trade have started to gather meaningful information from a variety of sources so that they can develop their own thinking for the channel and perhaps more importantly, share their thinking with retailers so that they can develop business mutually.
Suppliers can particularly add value in the area of understanding the customer. What are the motivating factors when choosing one pub over another? What are their likes and dislikes? What drives their decisions once they are in the pub? Answers to these questions may not provide local solutions but combined with sales data and local knowledge pubs can start to make better informed decisions about their customer offer.
Clearly, therefore, the onus is on all contributors to the on trade to respond to the competitive challenge by combining the information at their disposal and using it to ensure the pub provides its local market with compelling reasons as to why customers should go there and not somewhere else.
srcg is a consultancy specialising in retail strategy, catgory development and training. srcg facilitates collaborative working between retailers and manufacturers in the On-trade, Multiple Grocery and Convenience. Tel: 020 8948 4048 or visit www.srcg.com
