Royal Entertainment Marketing Plan
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Royal Entertainment Marketing Plan
1.0
2.0
2.1 Industry Analysis
2.1.1 Projected Growth
2.1.2 Industry Segments
2.2 Market Environment
2.2.1 Microenvironment
2.2.2 Macroenvironment
2.3 Trends
2.4 The need to be intended to fulfill for Royal Entertainment’s service
2.5 SWOT Analysis
2.5.1 Strengths
2.5.2 Weaknesses
2.5.3 Opportunity
2.5.4 Threats
3.0
3.1 Main Competitors
3.2 Plan to Differentiate Royal Entertainment’s Service from the Competitors
3.3 Substitutes
3.4 Plan to Respond to Competitive Counter Thrusts
3.5 Competition’s Response to Royal Entertainment’s Entry
4.0
4.1 Target Market Segmentation
4.1.1 Projected Potential Target Market Growth
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Royal Entertainment Marketing Plan
4.1.2 Projected Target Market’s Size
4.2 Market Segmentation Variables
4.2.1 Market Segmentation Variables Table
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Royal Entertainment Marketing Plan
1.0 Executive Summary
Chicago’s latest nightclub, Royal Entertainment provides three types of services under one roof.
Leaving a nightclub to go to a restaurant is a hassle, having both options plus the addition of a sports bar is where Royal Entertainment becomes the number one option.
Marketing Strategy
Royal Entertainment is located at Near West Chicago where there is less competition and provides college students and young adults a nightlife experience at a close proximity from their residence. Royal Entertainment will use the direct marketing channel and the pull strategy to attract the target customers through various means of advertising such as: radio, social media,
Royal Entertainment’s website, and flyers.
Mission Statement: Provide boundless entertainment in one building at an affordable price aimed towards college students, young adults, and tourists.
Goals: Build a reputation as the best nightlife experience in Near West Chicago.
Revenue Forecast: Revenue will be generated by offering services such as; food, music, and games. The main source of revenue is the nightclub admission. Sales made will cover mainly the building rent and the advertising expenditures. Royal Entertainment projects that revenue will be
$2,376,000.00 and profit will be $291,528.00 with a target of 23,141 customers . Aimed towards students, young adults, and tourists, Royal Entertainment will continue to make profit with a steady stream of customers over time.
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Royal Entertainment Marketing Plan
Current Market Situation: The Nightclub Industry is a growing popularity amongst the young adults. The nightclub began to represent a place for young adults to come together to meet other people. As more young adults and college students are residing at Near West
Chicago, Royal Entertainment can be a place where college and young adults can come to socialize. Royal Entertainment will launch the new style of nightclub, sports bar and lounge in one roof and expose this opportunity to become the new place for quality nighttime fun.
Running a nightclub industry is no easy task. The industry have a high turnover and many nightclubs fails as competition is very fierce.
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Royal Entertainment Marketing Plan
2.0 Service Description
Royal Entertainment, a new nightclub located in the west of Chicago, will break the barrier in the night time entertainment scene by providing three services: a nightclub, a sports bar, and a lounge. One of the distinctive competitive advantages for the club is that customers will have all three services in one location. Instead of traveling from one nightclub to another, customers can move through floors whenever they please. Royal entertainment will not be like any other nightclubs or venues that anyone in the city of Chicago, Illinois has set foot in. By providing three types of entertainment services, the club will be the highest rated nightclub.
The nightclub, the first level of Royal Entertainment, will include a dance floor fully equipped with light up tiles and include paid bars, bottle service, requested DJs, and tailored services. The nightclub will be a sought out destination for after-parties for events going on around Chicago.
Depending on the day of the week, it will play different music genres. Another great experience about the nightclub is that at least once a week there will be a unique event hosted. For example,
“Back to School Party,” “Finals Are Over Party,” “Halloween Night,” “Turkey Thursday,” etc.
At least once a month there will be a different DJ or musician hired to play the night. Having all these different artists and events will not only bring a diverse group of people, but it will surreptitiously help spread the name.
The sports bar, the second level in the building, will include pool tables, air hockey, bowling lanes, and foosballs tables, among other table-top games. The bar will be known for the group activities of those game tables. Foods and drinks will also be available to purchase.
The lounge, the third and final level, will be an environment that will be tailored to anyone and everyone. Its main purpose is to provide a place of conversations. In additions, customers can relax and watch gaming events on large television screens. The lounge also provides foods and drinks that similar to the other two levels. It can also be rented out for certain private events such as release parties, VIP events, and even wedding receptions.
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Royal Entertainment Marketing Plan
2.0 Current Market Situation Analysis
2.1 Industry Analysis
The bar and nightclub industry includes thousands of establishments in the U.S. It provides late night services for people who are in search of a place to socialize. The industry has been around for a while and even through the time of recession. It close to $20 billion in revenue projected to grow until 2019. endured generates and is
2.1.1 Projected Growth
2.2 Market Environment
The nightclub industry is greatly impacted by microenvironment as well as the macroenvironment:
2.2.1 Microenvironment
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Supplier - As nightclubs generates revenue from sales of food and drinks, the company needs to maintain close relationship with local dealers within Chicago to deliver drinks on timely basis.
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Competitor - Nightclubs in Chicago are located in the heart of Chicago and is a competitive industry with constant changes in trend of music. Location must be accessible by public transportation and needs to quickly adapt to growing trends and changes in technology.
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Royal Entertainment Marketing Plan
2.2.2 Macroenvironment
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Demographic - The nightclubs will mostly serve college students and young professionals. There will always be a constant flow of customers due to the passage of time.
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Economic - The economy has been in a recession for some time and it has also affected the nightclub industry. When the economy is poor, people spend less on outings and find substitutes, such as drinking at home or not going out at all.
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Political/Social - The law for drinking age varies from different states. For nightclub industry to stay in business, it will need to strictly follow the law and provide ethical
2.3 Trends services. The business cannot serve alcohols to minors and need to stop selling alcohol at certain time.
Recent market trends have showed that there is a relationship with alcohol consumption and consumer spending. As the economy faced recession, consumers spending decrease as well as the alcohol consumption decreases until the year 2009. The trend for consumer spending and per capita alcohol consumption shows a similar relationship to one another.
Preferences constantly change which means trends in the nightclub industry also constantly change. People will prefer different music and different artists. New music is released on a
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Royal Entertainment Marketing Plan daily basis and the nightclub industry must stay flexible and be quick to adapt to have success. Also, the industry will be able to increase in productivity and earnings if it has a greater emphasis in using new technology and training employees.
2.4 The Need Intended to Fulfill for Royal Entertainment’s Service
Royal Entertainment will help reduce travel time by providing three services in one location.
It will be aimed to provide quality service for people at a lower price. Royal Entertainment will continuously plan new affordable services that fulfill its target market’s expectation.
Royal will also invite singers on special occasions and this will provide an opportunity for customers to meet their idols; at the same time, the club will increase its target market as well as generate a profit.
2.5 SWOT Analysis
The following information summarizes the SWOT analysis that will help Royal
Entertainment in establishing a long term relationship with its target market and its business objectives.
2.5.1 Strengths
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Three services of nightclub, sports bar and socializing lounge in one location.
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Located at a favorable area with taxi and public transportation available for customers to arrive at convenience.
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Affordable drinks for people on tight budget.
2.5.2 Weaknesses
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Lots of expenses are going out to maintain the facility, such as bouncers, bartenders, servers, electricians, cook, and DJs.
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The environment can get dangerous when alcohol is involved with people; drunk-fights can happen.
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Royal Entertainment Marketing Plan
2.5.3 Opportunity
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New trend of providing all three services in one location.
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Student organizations can come to Royal Entertainment to hold college events
2.5.4 Threats
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Neighbors who are against the establishment of Royal Entertainment.
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Other nightclubs and bars that people go regularly.
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Regulations and rules for nightclub in the city of Chicago.
3.0 Competitors and Substitutes
3.1 Main Competitors
Castle Entertainment
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Similarly to Royal Night Entertainment, Castle provides different types of entertainments under one roof. Castle consists of a restaurant and three other floors dedicated to different nightlife entertainment.
o Restaurant (Pub and Eatery) Floor
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Offers casual food such as hamburgers, sandwiches, and tacos.
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Serves cocktails and other alcoholic beverages.
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Provides soft background music, so customers can dine without loud noise.
o Three Music Floors
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Palladium Floor offers vibrant sound, light and technology and hosts by different DJs every night Castle opens.
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Dome Room Floor offers hip-hop and electronic dance music.
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Cabaret Floor hosts events performed by musicians, comedians, and other entertainers.
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Strengths o Castle has a pub and eatery floor. It serves customers in a quiet area away from loud music from the other floors. Castle’s menu has a wider selection of meals than Royal Entertainments.
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Royal Entertainment Marketing Plan o Castle offers a variety of music to cater customers with specific interest on different floors whereas Royal Entertainment offers only a single floor for music and dancing.
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Weaknesses o Castle Entertainment is located in Downtown Chicago. There are more than ten nightclubs and restaurants in a mile radius that compete with Castle while Royal
Entertainment is located north of Chicago with fewer contending nightclubs and sports bars.
o In addition to being located in downtown, Castle charges its customers a larger amount, twice as much what a nightclub or restaurant would. Castle forces upper and lower middle class customers away with high prices.
Red Kiva
A competitor of Royal Entertainment in the same territory. Red Kiva hosts music and comedy routines, and provide food and drinks for customers as well.
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Strengths o Like other competitors in Royal Entertainment’s territory, Red Kiva offers luxurious wine and meals that attract people with a diverse culinary palate.
o Red Kiva offers open mike for customers who wish to entertain others.
● Weaknesses
○ Since it caters to the upper class, Red Kiva do not appeal to college students with their expensive menus.
3.2 Plan to Differentiate Royal Entertainment’s Service from the Competitors
Royal Entertainment will be located at Near West Side, easily accessible via the Red Line and
Blue line of the CTA. Being that the club is located where rent is cheaper than in the Loop,
Royal Entertainment can offer services at lower prices than Castle Entertainment. the club’s prices will attract students since the nearby clubs cater to upper-class customers with full-time jobs.
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Royal Entertainment Marketing Plan
3.3 Substitutes
Cinematic Entertainment
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Theater entertainment offers entertainment through storytelling and nice visuals. While their audience does not converse during the program, they offer seats and a gigantic projector screen or stage to watch.
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Strengths o A portion of the nightlife population would prefer to go watch a film rather than hang out at a nightclub or sports bar. o There are people who do not want to converse or move around a lot. Movie theaters allow people offer drinks and snacks.
o A ticket for a movie is more affordable than entry into a nightclub. Movie theaters target both upper and middle class.
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Weaknesses o Because customers go to theaters to watch movies, they are not allowed to talk during the show or disrupt it in any other way; they may be kicked out of the theater.
3.4 Plan to Respond to Competitive Counter Thrusts.
As it will likely encounter competition when it enters the market, Royal Entertainment will respond to competitive counter thrusts by the following:
● Spreading awareness of Royal Entertainment’s unique floors.
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Providing pool table and arcade games.
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Giving discounts to college students and tourists.
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Maintaining a student-friendly environment.
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Holding different night themes that relates to college students.
3.5 Competition’s Response to Royal Entertainment’s Entry
Royal Entertainment’s main competitors are pre-existing businesses. They may be affected by Royal Entertainment’s entry in the first two weeks after launch because customers will want to try out Royal Entertainment. After it’s opening, customers may go back to their usual clubs if they are not interested. Also, the competitors might inform their selection of music and types of entertainment services and compare it to Royal Entertainment’s. To add,
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Royal Entertainment Marketing Plan competitors might give special discounts or throw student-only nights.
4.0 Target Market
4.1 Target Market Segmentation
Royal Entertainment nightclub is located in an urban area where more than 50% of the people living in that area belong to the “upper mid middle age family mix and lower mid younger segments.” 1
It is the mix of residents of young singles, students and professionals.
They are the early adopters who are quick to check out a new nightclub as Royal
Entertainment. In addition, the club is near renowned locations where many U.S. and international travelers visit. Hence, Royal Entertainment has identified three target customer segments, which are particularly attractive:
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College students : They study hard everyday and usually stay overnight to complete their homework. For the reason, Royal Entertainment will be an ideal place for them to hang out and relax during their free time as well as during their break time between semesters.
The club will provide them many different kinds of global dances and games. These entertainments will attract both U.S. and international students. Also, live performers will definitely attract this market. Their ages are between 18 and 26. Most of this target will be single students, who would be interested in exploring new nightclub during their young age. So, college students segment is one of the most important target market segments of Royal Entertainment. Royal Entertainment expects an increase of at least thirty percent annually from this segment.
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Young professionals : These customers are either single people or young couples, and they will range in age from 25 to 44. They usually go to nightclub for business parties and other social activities. Many young professionals work for big companies and live around Royal Entertainment’s area, so they have enough money to spend on high quality entertainment. Professionals usually spend their income on drinks and tips. This target segment is also very important to Royal Entertainment; to segment the larger market, the club will create a comfortable atmosphere that give them a special advantage. That is
1 http://www.claritas.com/MyBestSegments
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Royal Entertainment Marketing Plan young professionals can relieve their stress after work and build great relationships with their customers, employers, and other companies partners as the same time. With this advantage, they will spend their income in other entertainment at the club as well.
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Tourists and Travelers : The age range for tourists and travelers is also between 25 and
40. Many tourists and travelers come to Chicago to visit renowned locations and to explore new cultures. Therefore, Royal Entertainment will be a destination for them to socialize and explore a new culture. Also, many tourists visit Chicago for sporting and social events, so the lounge will provide them almost all the events in just one sitting.
Royal Entertainment plans to reach this target market through direct marketing with local hotels, restaurants, and attractions. These places will deliver recommendations to tourists and travelers. Since the club has three services in one location, many tourists and travelers will be easily attracted to the services and entertainments; they will come back when they visit Chicago again. The club also plans to create a website that provides the information about the club and the comparison between Royal Entertainment and other clubs to any tourist who want to search for a club in advance before their visit.
4.1.1 Projected Potential Target Market Growth
Target Market Forecast
Potential Customers
College Students
Young Professionals
Tourists and Travelers
Total
Growth
Rate
30%
25%
4.1.2 Projected Target Market’s Size
Year 1 Year 2 Year 3 Year 4 Year 5
8,249
9,464
10,724
11,830
13,941
14,788
18,123
18,484
23,560
23,105
20% 5,428 6,514 7,816 9,380 11,256
25.00% 23,141 29,067 36,545 45,987 57,921
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Royal Entertainment Marketing Plan
4.2 Market Segmentation Variables
Royal Entertainment’s target market is segmented based on marketing segmentation variables: geographic, demographic, psychographic, and behaviors, but the club mostly focus on the demographic variable. Below are the information for each variable that the club selected for its target market segmentation.
4.2.1 Market Segmentation Variables Table
Geographic
Density Urban
Demographic
Age From 18 to 44
Family size 1 to 3
Family life cycle Young, single, and married but less children
Income
Occupation
Education
Under $20,000 for students, and over $50,000 for professionals and tourists
Students, and professionals
College
Psychographic
Lifestyle Achievers
Social class
Personality
Upper-middle-class
Adventurous, outgoing and social
Behavioral
Benefits Quality, convenience, economy and services
1 Objectives and Issues
1.1 Marketing Objectives
Royal Entertainment’s main marketing objectives for the first three years include:
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Increasing the number of customers by 25% per year.
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Achieving at least 50% brand recognition amongst college students and young professionals within the first year of operation.
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Controlling drinks and meals cost below 30% of drinks and food revenue by the second year.
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Royal Entertainment Marketing Plan
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Exceeding $3 million in annual sales by the third year.
1.2 Key Issues
Internal issues
: The club’s finance can limit the marketing budget, making it difficult to reach the target market and reducing the availability of resources. Achieving marketing objectives also depend on the size of the workforce and the quality of the human resources within the club’s business.
External issues : Competitors with a similar service can affect the club’s marketing objectives.
Since economy has an impact on consumer spending, marketing objectives will be affected as well. Government policies and pressures on issues such as alcohol can also make it more challenging for the club to reach the goals.
1.3 Revenue Projection
The following table shows the revenue projection for three years:
Total Revenue
Year 1
$2,376,000
Year 2
$2,970,000
Year 3
$3,712,500
2 Pricing
Royal Entertainment’s cost is an important element in its pricing strategy, so cost-based pricing will be used. The club pursues to set prices that are more affordable and more appealing than do other nightclubs.
2.1 Pricing Structure
Royal Entertainment admits customers by giving wristbands. These wristbands indicate the time and date of when the customers enter, so they may not reuse wristbands for another night.
The table below represents the club’s pricing structure:
Type
Mandatory Admission Wristband
Drinks (alcoholic beverage & nonalcoholic)
Meals (nachos, hot dog, hamburger)
Average Unit Price
$15
$ 3.50
$3.00
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Royal Entertainment Marketing Plan
15 min. Reserving Pool/Foosball Tables
Type
Pool Table (max. 4 players per table)
Foosball Table (max. 4 players per table)
2.2 Variable & Fixed Costs
Unit Price
$1 per player
$1 per player
The average costs of drinks and food are $2.25 and $2.00, respectively. Also, each admission will cost $2. The cost of a unit of sale is based on the average amount of what a customer buys, which is two drinks, one food item, one game reservation, and an admission. The total cost of a unit of sale is $9.25.
For the building rent, payroll, deejay, and electricity expenses, the combined monthly fixed cost is $51,000. The rental cost for the pool tables and foosball tables is $2,750 per month. Besides that, Royal Entertainment will spend a monthly average of $32,000 for advertising and promotions. Hence, the estimated total amount of annual fixed cost is $1,029,000
2.3 Break-Even Analysis
Royal Entertainment’s break-even analysis is depicted in the table below and the graph that follow:
Break-Even Analysis
Monthly Units for Break-Even
Monthly Revenue Break-Even
Assumptions:
Average Per-Unit Revenue
Average Per-Unit Variable Cost
Estimated Monthly Fixed Cost
6857
$154,282.00
$22.50
$9.25
$85,750
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Royal Entertainment Marketing Plan
Based on the break-even chart, Royal Entertainment will generate a profit after the 6857 unit of sale per month. Profit will be $291,528.00 and total revenue will be $2,375,000 by selling
105,600 units of sale
3 Marketing Channel
Royal Entertainment is a service-oriented company that aims to generate revenue by providing nightlife entertainments. Royal Entertainment will utilize the direct marketing channel. The company will directly sell to the customers by selling admission wristbands.
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Royal Entertainment Marketing Plan
3.1
Physical Facility:
Royal Entertainment is located West of Chicago consisting of three levels of different entertainment floors:
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Nightclub: The nightclub is approximately 5000 square-feet. The dance floor will consist of light up tiles and high quality speakers surrounding the room. Special lighting will be used to create specific atmospheres throughout the night. The nightclub will be split into two sections: one section will consist of the main dance floor including a deejay booth and the second section will have a smaller dance floor with a bar at the end of the room. The following picture presents the layout of these two sections.
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Sports bar: The second level will be the sports bar. The sports bar will consist of eight pool tables and four foosball tables. All are located at one end of the sports bar. Dozens of televisions will be mounted onto the walls playing multiple sports for customers to watch.
The walls will be decorated with sports paraphernalia such as jerseys and posters. The middle of the room will consist of a large circular bar where drinks will be made. There will be a bartender whom will have a specialty drink, named after Royal Entertainment. Customers will be able to sit around the bar and watch sports. Also, there will be a kitchen at the other end of the room.
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Lounge: The lounge will have tables and comfortable couches for customers to sit down.
The room will have more lighting, and the noise level will be reduced significantly compared to the other two floors. The lounge will also have a Wifi hotspot as well as separate VIP
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Royal Entertainment Marketing Plan lounge section for private group events. VIP lounge will have access to a separate mini bar.
3.2 Delivering Service
Entrance fee to the nightclub will be charged at the front of the main entrance. Payments of cash, credit, or debit will be accepted. There will be three employees outside the establishment; one person will check for identification, making sure customers are of legal age, and the other two employees will receive cash and/or electronic payments. Also, another employee will stand by the entrance administering the wristbands to customers to show verification of payment and to enter into Royal Entertainment. Royal Entertainment will also have a website to book reservation for the VIP lounge and also to sell the wristbands online.
Communication
Royal Entertainment faces a lot of competition and therefore must attract many potential customers. Many college students and young adults reside around University of Illinois at
Chicago. Our target customers are young professionals, college students and tourists who are looking for quality nightlife experience of Chicago without having to spend hundreds of dollars.
Royal Entertainment will utilize the Direct Marketing pull strategy, Radio Advertising, Sales
Promotion and Online Marketing to attract potential customers.
Direct Marketing
Royal Entertainment is using the direct-marketing channel and the Pull-Strategy will be the most effective and appropriate to use. By using the pull strategy, Royal entertainment will be able to cater to the final consumer of the service. Royal Entertainment will use many modes of advertisements to disperse the company’s name and bring in the customers.
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Royal Entertainment Marketing Plan
Advertising
Royal Entertainment will focus heavily on using the radio as the main source of advertising. By advertising on 103.5FM, Royal Entertainment will reach out to many college students and young adults who listen to the station. The advertisement will be announced on the radio 60 times per week. This will be our main strategy to advertise on a mass scale.
Sales Promotion
As a new company, Royal Entertainment will need to attract many customers because competition is very high. To promote Royal Entertainment, the company will have a grand opening event to launch the club. The first 50 customers who come to the event will each receive a discount for their next visit.
Handing out of free merchandise along with discounts in the first year of business boosts exposure through word of mouth. T-shirts, hats, and knick knacks such as pens and stickers will be given out at different city events such as music or food festivals.
Flyers and V.I.P. cards serve as an enticement to check out Royal Entertainment. Flyers will promote special events that will be on going. For example, a special DJ, theme parties, and ladies night. V.I.P. cards will be used as an incentive, each card will provide a future customer with a free drink on their first visit.
Online Marketing
Royal Entertainments target customers are comfortable with the growing advancement of social
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Royal Entertainment Marketing Plan media. Therefore by using social media, Royal Entertainment can tap into the growing number of online users to their advantage. Considering that social media is free, using that market becomes the most reasonable method.
Facebook, Twitter, and YouTube are the free services. Performers can promote when they will be performing at Royal Entertainment to attract more potential customers. Through social media, other people can hear about Royal Entertainment through friends and classmates which then helps bring in more customers to without spending additional money on advertisements.
Although social media is free, a social media expert will be hired to manage all the accounts.
Email will be used in the form of email blasts. It will be a method for Royal Entertainment to not only remain in contact with the customers on a more personal level but all provide use to the name and location information of customers.
Royal Entertainment will have their own websites to sell wristbands online and also to take reservation for group events or VIP events. Pictures, videos and a calendar of events will also be included. The website will be updated on a regular basis to keep up with the changing trends and a professional website technician will work on making the updates.
Promotional Budget
Promotional Budget will be based on the affordable method for Royal Entertainment
Advertising
Radio Station
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Royal Entertainment Marketing Plan
● Reserving sixty, 30 second slots on 103.5 Kiss will cost $7,000 per week or $364,000 for the year.
Sales Promotion
Free merchandise, Discounts for those who attended first
● Free shirts, caps, and gifts will cost $2,000 for the first year.
Social Media
Facebook Page, and Twitter Account.
● Virtually Free
Outdoor advertising
Flyers and VIP Cards
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500 flyers/VIP cards will cost $200 per month or $2,400 for the first year
Royal Entertainment will pay each promoter a fixed rate of $300 per month or $3,600 for the year. These three promoters are also responsible for social media.
Online Advertising
Website
Media/website technician designer cost $200/week = $10,400/year
Grand Total: $364,000+$2,000+$2,400+(3)$3,600+$10,400= $389,600
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Royal Entertainment Marketing Plan
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Royal Entertainment Marketing Plan http://www.claritas.com/MyBestSegments http://www.sbdcnet.org/small-business-research-reports/bar-business-2012 http://www.ibisworld.com/ http://www.castlechicago.com
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Castle. (2013, November). Castle Entertainment Complex. Retrieved from http://www.castlechicago.com/
Brueski, T. (2009, June 24). How Much Does Radio Advertising Cost? Retrieved from http://localmarketingideas.com/how-much-does-radio-advertising-cost/
Neilson (2013). 16 Bohemian Mix. Retrieved from http://www.claritas.com/MyBestSegments/Default.jsp?ID=20&menuOption=ziplookup&pa geName=ZIP%2BCode%2BLookup
Nciaa. (2013). The Official Trade Organization of Nightlife and Club Industry. Retrieved from http://www.nciaa.com/content.aspx?page_id=22&club_id=160641&module_id=29898
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