Restaurant Based Businesses in Scarborough, the UK - Case Study Example

COVER PAGE Module Module Marketing Audit Level: Element: Assignment Pest & SWOT Analysis Report: Opera House Casino No: Abstract This report has been made with regards to the various restaurant based businesses in Scarborough, UK. The establishment under specific focus in this report is the Opera House Casino which combines gambling, a restaurant and two bars. The placement of the company is seen in its working environment and its functions are analysed from different point of views using various methods such as the PEST and SWOT analysis. Contents Abstract i Contents ii Introduction iii Structure of the Document iv Chapter 1 - Background Research 1 1.1Introduction 1 Point One (PEST analysis) 5 Social factors 6 Economic factors 7 SWOT analysis 8 Chapter 3 - Summary & Conclusions 11 Summary 11 Conclusions 12 References 13 A New Casino for Scarborough - Your Questions Answered(2007): http://www.scarborough.gov.uk/default.aspx?page=12346 13 Branagan, M. (2008): Casinos £1.8m loss deals blow to Brown: http://www.yorkshirepost.co.uk/news/Casino39s-18m-loss-deals-blow.3929260.jp 13 Introduction It is interesting to see the workings of the market and such a diverse market at that. The Opera House Casino is not a typical establishment and has a kind of monopoly in the market. There are multiple restaurants around the Scarborough area and each has something unique to offer. It is interesting to see how each function in an area that is also a tourist attraction. The main idea behind this report is to look at the productivity and limitations of the casino but only by doing so we get to look at the entire market in a much bigger respect. Structure of the Document There are three main Chapters: Chapter 1 - explores the background to the topic Chapter 2 - highlights the important points for the reader Chapter 3 - provides both a summary of my research and conclusions Chapter 1 - Background Research 1.1 Introduction The Casino is one of the defining attractions of the Scarborough area. It opened its doors to gamblers, drinkers and food lover alike during October 2005. The seven million pound investment in the venture is the largest that has ever been made in the name of entertainment in the last thirty years of Scarborough’s history. Our focus is the establishment in general but special focus will be maintained over the restaurant for the purpose of this report. Market Segments Simply put, a market segment is basically the process of slicing the market into various parts thereby creating groups that share similar needs and wants (Moore 2008). Market segmentation is based on a variety of factors such as age, gender, social status etcetera. The idea is to not target consumers through generalised mass marketing but create a unique marketing mix to that they can associate with the goods or services that are being provided and hence be more inclined to spend on those goods and services due to the affinity they feel. It is impossible for all consumers to be homogenous and they will always have some unique traits which are uncommon with the rest of society at large. It can be argued that there’s no way to target consumers in groups because people are so different and mass marketing thus makes the most sense. However, the fact is that by using a logical marketing mix, the manager can create an association of the product with the consumer that mass marketing cannot. People are attracted towards things they can relate to and not empty ideas (Kanuk 2005). Defining and locating market segments The marketing segments for the Opera House Casino are not ordinary ones. They are a complicated mixture because of the many services that the Opera House Casino strives to provide. In essence the establishment is a multi-operational business and caters to many different needs. The casino does not only cater to the local market as many tourists stop by the place as well and most do not want to miss out on an attraction like the Opera House. The market segment consists primarily of young adults and adults from medium and high income backgrounds. The crowd transcends racial, ethical and cultural differences. The place generally tends to attract people who are looking for excitement in their lives and tends to propel away those that are looking for security and order, because casinos generally give off negative vibes and are looked down upon. Understanding segments’ needs and wants Anyone who steps into the casino as opposed to any other restaurant all over town will be looking for a glamorous experience. The problem however is that since the market crash the average casino goer is now going to take an alternate because he cannot afford to lose money on his entertainment. The casino goers mostly consisted of young adults and some adults. This group is either struggling to find new jobs or trying to keep their old ones intact; it is important to understand that while they want to have fun, they need to keep an eye on their pockets. The marketing mix has to be changed in order to cater to their requirements and the policy as well. The marketing mix has to be created keeping in mind that if a customer is stepping into the restaurant he will want to most likely use some features of the casino too and will be looking for a casino experience as a whole. The individuals that come to the casino want to escape the reality of life and go home as winners. They need to feel like they have successfully evaded their lives, and had good dinner while they did it. Developing more appropriate marketing mixes Initially the casino was advertised as one of the best in all of Britain and broke several records by attracting over 5000 signups before it even opened up (bbc.co.uk). however, since it has opened the world markets and specifically the western markets have fallen into terrible times. The product here is the restaurant and the Opera House Casino management needs to look at how it can boost the restaurants sales and build its own identity and not just one that is seen in conjunction with the bars and the gambling’s tables. The casino could also boast its productivity by setting the prices lower than the rest of the establishments in town and promise a quality meal. They have an advantage of being the only casino in town so far, if they are able to pull in customers who they lost because of the financial crunch then it will be because the casino looks affordable to these people again. The promotion needs to be extravagant and it needs to be big; people associate allure and opulence with casinos and even if the casino is telling them it’s prices have gone down, it still needs to do so in a way that adds to its grandeur. It would also be a good idea to develop the tourism in the area to attract more customers; tourists will also be more willing to spend money on things that the locals would otherwise stay away from. The very idea of a tourist coming into a town is for sight seeing and spending a lot of money on experiencing the city. The Opera House Casino is an integral part of the Scarborough experience. Root causes of marketing problems The main problem hasn’t been as such with the marketing aspect of the casino as it has been with the financial crunch that the world markets are suffering from. In this case most people are already trying hard not to lose their existing jobs and sources of income, hence, most are spending a lot less on entertainment and leisure activities. The marketing approach needs to shift from trying to get already interested individuals to come to the establishment to targeting those who are now locking themselves up in their homes. The market dynamics have shifted and there are less of those who are willing to spend time out for having fun and more of those that need heavy convincing to do so. Any strategy that is adopted has to highlight why the casino is still a good place to come to, why the restaurant will fulfil their leisure requirements and why they should chose this establishment over all others. The focus should be placed on the multiple benefits of hanging out at the casino i.e. the consumers don’t just have dinner, they get a Showtime experience full of glitz and glamour. Changing needs, wants, attitudes and trends The fact of the matter is that almost everyone likes having some leisure time. The Opera House Casino gives them an opportunity that no other place in the area can. However, the casino will now look like a place for only rich snobs to hang out to most people who want to save. This has to be taken into account by the Opera House Casino. Regular theme nights have been introduced in the upper circle restaurant at the casino as an initiative to attract more people. This may prove fruitful as people once again need a break and some might drop by. The casino is also advertising the giving away of a free car through a lucky draw for those that visit the casino. This will help because people who are looking to save money will be attracted to the offer of getting a free car and may just stop by for that chance; even if they don’t spend a lot of money, they will spend some money and that is what the establishment needs. Chapter 2 - Main Discussion Point One (PEST analysis) This form of analysis is used to take into account the political, economic, social, and technological factors that affect the establishment under discussion (Fullen & Podmoroff 2006). It helps one get an insight to both the competitive and collaborative market environments. You can base your marketing strategies on the pest analysis itself. Political Factors From its inception the casino hasn’t seen many political problems till now. In July 2006, barely a year after its birth, the casino held a monopoly after the Grosverner closed down (gamingfloor.biz). That being said this position will soon change as the council is planning on attracting other casino companies to the vicinity. The Scarborough Borough Council is seeking new companies as part of its economic regeneration process. It has placed a bid for a new casino licence. Any company can try and get their hands on the new licences and this includes the owners of Opera House Casino (scarborough.gov.uk). The Casino is already suffered great losses, the Yorkshire Post reported, “Scarboroughs £7m Opera House Casino lost more than £1m in 2005-06, its first year of trading, and more than £838,500 in the tax year ending March 2007 despite a 28 per cent increase in customers and a 31 per cent rise in turnover.” Even though it is performing well, the casino is still losing money and in effect the restaurant is also suffering in the midst of all these problems. Another casino will not only split the attendance in half from the gambling tables, it will also mean that fewer number of people will be visiting the restaurants as well (yorkshirepost.co.uk). it is clear that Scarborough is not feasible for one casino, two will ultimately result in big problems. Social factors The impact of the casino stays largely within the town because of its geographical location. So any social factors that will be discussed will be in terms of the local people. Generally speaking the casino has offered a lot of jobs to the area and has helped it develop further. It was a welcome change where most people wanted to see some attraction and entertainment. However, it has no basis for family values and many seem to have issues with that too. Entry into the casino is only for 18 year and above people which means that no family activities are encouraged there. In effect there is an entire segment of the market that is excluded from the casino because most people, when they go out, will go out as a family, and that group is largely ignored by the management because the atmosphere is not suitable for it. Most people are in debt as it is and they do not need more problems with a casino. It will only make matters worse for those who have serious problems with gambling and even those who might stop by for a little while because in general people cannot afford to spend on bets and things. Technological factors Why play poker with real money when you can play it with virtual chips? The internet has changed the face of the world today and the Casino is no different. Most people who would be coming and spending their money in the casino are now finding alternative to soothe their habitual patterns. The restaurant has gone largely ignored because it is taken in conjunction with the casino. It is not an attraction on its own as such and needs to be developed in that way because no matter what you do you cannot eat a virtual meal and be satisfied. Economic factors The world market crash is the biggest problem for the casino right now. Although it created jobs for the community, the community itself is now shunning the establishment. When the new casino comes into town the establishment will face competition and will lose its existing customers because of the intrigue factor. If the Opera House Casino is to continue working and turning over a profit then it needs to invest in some heavy marketing to attract people towards it. The problem with Scarborough is that although it is a very happening place for tourists, not many stop by in the area and hence that kind of revenue is not seen in the city. Importance of PEST analysis This analysis gives us an insight as to how the environment in which a business is functioning is affecting its overall performance. This also helps us make necessary changes or take initiatives to make the service or products better. The pest analysis is an easy way of taking in the bigger picture without going into minute detail, however, it help us refine the minute details because we have a macro view of the problem. SWOT analysis The SWOT analysis is an insight into the strengths, weaknesses, opportunities and threats that are faced by any businesses. Each industry is privy to its own kind of problems and the restaurant business is no different. The casino as mentioned before is slightly different because it has a very diverse palate to offer its consumer base i.e. it isn’t just a casino but also a restaurant, it isn’t’ just a restaurant but also a bar. Strengths: Glamorous outlook of the establishment Excellent interior and exterior due to the heavy initial investment Very competitive prices when it comes to the restaurant One of a kind service style Current monopoly as the only casino in town Very solid brand image. Employed well-trained staff. Excellent disabled facilities Weaknesses: Monopoly is about to end and the returns, although high, are not profitable Casino would have been better suited for a larger city Does not target enough tourists Families are completely excluded from the casino Opportunities: New license may mean another branch for the casino Could host various events to draw in the crowds Can attract conferences and large business meetings Threats: If the casino loses the new license it could face heavy competition Chapter 3 - Summary & Conclusions Summary Recommendations  The Opera House Casino needs to rethink its marketing strategies and reach out to more customers. Even though it has a larger attendance, it seems it is not making enough profits and it needs to look into how it can make its operations more profitable. It needs to keep an eye out for the new casino that might become its competition or try and buy out the bid to avoid the competition entirely. More focus needs to be placed on its capacity as a restaurant and as a conference area than the casino itself because while people will be looking for less entertainment, the business will go on and they will always need good food. It’s current theme nights, setting and perks make it a one of a kind place to go and have fun but it needs to capitalize on these aspects but marketing them in a better way. Conclusions The analysis demonstrates that environment trends-economic, demographic, social, political, physical and technological have a very large impact on the Opera House Casino and it’s restaurant. While the Swot was an excellent indicator of all that it was lacking and it’s strengths. Through the two it can come up with a very effective strategy to turn over a profit and attract more consumers. References A New Casino for Scarborough - Your Questions Answered(2007): http://www.scarborough.gov.uk/default.aspx?page=12346 Branagan, M. (2008): Casinos £1.8m loss deals blow to Brown: http://www.yorkshirepost.co.uk/news/Casino39s-18m-loss-deals-blow.3929260.jp Ian (2007): A license to LOSE money: http://gamingfloor.biz/forum/showthread.php?t=3030 Kanuk LG., (2005): Consumer behaviour Moore, CW., (2008): Managing small business: an entrepreneurial emphasis: Cengage Learning EMEA Scarborough Casino: Friend or foe? (2005): http://www.bbc.co.uk/northyorkshire/content/articles/2005/10/28/scarborough_casino_opening_feature.shtml Read More