Marketing Report On Night Clubs In Australia

1.0 Introduction

The Australian night club industry has undergone numerous changes over the past few years. This is as a result of both internal and external factors that have put a strain on the overall performance of the industry. In Australia, nightclub-patronage has decreased substantially. Consequently, there is need to examine the reasons behind this decrease and determine some of the possible solutions to this challenge.

In the past, the night club industry recorded a higher market share than it does today. This was because there were less stringent laws on the issue of underage drinking. Besides that, other leisure alternatives at night were not that numerous. Besides this, regulation of alcoholic beverages was not intense. These and many more reasons caused high profit margins within the industry. However, the same factors do not apply today and night club owners have to look for creative ways of surviving in this cut-throat industry. (Rutman, 2004)

2.0 Situational analysis

Internal factors

The overall sales in the night club industry have dropped substantially from previous recordings. Companies are now trying to out compete one another in order to make the most of their limited client base. However, these negative sentiments simply refer to performance between bars. In terms of overall market share of the leisure industry, the nightclub industry boasts of reasonable sales compared to other industries. For instance, in the year 2006, Australian night clubs earned a revenue of seven billion dollars.(Barlon, 2006)

It should be noted that the night club industry has a high degree of fragmentation. Consequently, different night clubs have different opportunities to increase their own market share. (Graydon, 2003) Statistics show that some of the well known names in the industry only take up seven percent of the market share while the rest are accommodated by smaller players. Consequently, the issue of domination within this industry is not as common as it is in others. In terms of positioning, different clubs have different levels of importance depending on the type of service they offer. Since types of clients reporting to these night clubs vary; some may be tourists, some may be youngsters, others may be the working class etc, then night clubs accommodate different patrons depending on the nature of their client base. Consequently, no single company can boast of superior positioning in comparison to others.

Promotional strategies within the night club industry vary widely with the nature of the club. However, there are some common tactics. Promotions normally come in form of advertisements on media outlets. Most night clubs are fond of utilising the radio. Normally, a radio ad contains information about the unique services found in that respective club and where it is located etc. Promotions are also conducted through endorsements from well know artists or DJs. The DJs are usually hired to instil loyalty in certain client bases. Performing artists are usually invited to perform in those respective clubs. In this industry, external communication is done through a  variety of media outlets. For instance, many night clubs have created their own websites or listed their services in Australian search engines. Consequently, clients may easily access them through this channel. Besides this, the night clubs also advertise themselves through fashion or celebrity magazines and newspapers. (Rossi, 2003)

External factors

Some of the micro factors affecting the nightclub industry include the moderate attractiveness of the industry. The night club industry’s attractiveness has reduced tremendously owing to the fact that most of their clientele may get access to other more promising industries such as the food industry, movie industry and the like. (Hughes, 2005) One of the industry trends includes attracting loyal patrons. Most companies that do well here normally garner customer loyalty and can therefore count on them for future profitability. Another issue in Australian bars is the push towards a more sophisticated clientele. In the past, most night clubs would have attendants adorned in tattoos and the like. However, these days, patrons are looking of a more relaxed environment. Besides this, nightclubs are also realising that they have to provide consumers with a better mix of products. Nightclubs that can offer more creative cocktails are selling more than those that merely offer beer. Also, the move towards spirits in night clubs has become quite common.

Customer’s income largely determines profitability within this sector. Normally, those that do well are those ones that manage to get the attention of patrons. However, it should be noted that in order to attract a large client base, nightclubs need to stand out from the rest. Also, a substantial number of night clubs usually perform poorly in the first year of inception. This is because consumers are always looking for a place with lots of entertainment yet this is not particularly available within new nightclubs. Few people know about them and therefore people rarely go there. (Brown, 2000)

A competitive analysis of the Australian nightclub industry indicates that the level of competition within this industry is tremendously high. Large nightclubs usually have the capability of offering other services such as food and entertainment. Therefore, quality of these services largely determines the overall competitiveness. Additionally, the level of competition within this industry is also determined by the intensity of loyalty which one can generate. This is mostly prevalent in smaller night clubs. (Chekitan and Schultz, 2005)

Some of the Macro factors affecting the nightclub industry include Political factors. For instance, the Australian government introduced a new levy on music played in night clubs in order to reduce piracy and to give musical artists their dues. The charge is three point seven dollars per person. Many night club owners have asserted that this could cause a substantial loos in their market share and could greatly diminish their level of competitiveness. One of the economic factors affecting the night club industry are the type of fiscal policies. State taxation on night club ownership is tremendously high and this exerts a lot of pressure on their owners. One of the legal factors affecting nightclubs is government licensing. Australia has numerous licensing regulations that squeeze into night club’s entrepreneur’s profits. For instance, in order to sell alcohol, one is required have an alcoholic license. Besides that, to sell alcohol to persons who will consume it within the building also requires another licenses. It should be noted that different licenses are issued for different beverages. Beer and wine require lower investments than the sale of spirits yet spirits are in high demand. This is topped up an entertainment license required or performing any entertainment activities such as live shows or dancing. The major social factors affecting this industry include community resistance where residents may oppose night clubs because they create a lot of noise for them. As if that is not enough, clients keep changing their preferences. Sometimes, some may be attracted to certain trends which are not on offer in particular night clubs. (Doyle, 2000)

3.0 Goals and objectives

The overall objective of the marketing plan is to create a magazine for the night club industry. The specific objectives are

Create a sensational, entertaining and interesting nightclub magazine
Highlight problems in the Australian night club industry through the magazine
Give suggestions on how to solve these problems in the magazine
Create advertisements for a wide range of Australian night clubs within the magazines

The idea behind this research is to look for  away of boosting the Australian night club industry. Therefore the idea of a magazine exclusively for night clubs could be very useful. The main contents within the magazine will be industry trends, night club industry challenges and methods for industry improvements. It will also contain night club advertisements. (Mark, 2001)

4.0 Target market and segmentation

The major benefit of this night club magazine will be to boost overall performance of the industry. This aim will be achieved by advertising on behalf of the night clubs on their locations and services offered. It will also provide an insight into some of the problems facing the industry and the possible solutions that can be adopted by stakeholders. (Keller et al, 2005)

The market segment most likely to value this commodity is the category of small sized bars that are just entering into the market. This is because the magazine will give them exposure and will also guide them on how best to boost their sales within the industry. Research has shown that overall failure rate of new night clubs is eighty percent during the first year of operation. Consequently, if there was some external assistance that would guide this segment, then the targeted market segment (New nightclubs) can be well on their way to improving their performance. The overall market size for this commodity is most likely to take up sixty percent of the overall Australian night club industry.

The business market segmentation applicable within the night club industry is: geographical location. Night clubs are located in large cities and towns such as Sydney and Melbourne. Consequently, the magazine could be based in any of these cities. Additionally, customer size has a large part to play; there are numerous night clubs in Australia, consequently, possibilities of accessing them are also high. The benefits of a night club magazine is