ABCBar is a night club bar located in Melbourne City, in Australia. Thebar owner intends to build an extensive consumer base in the city byproviding the best service as well as customer satisfaction.Currently, Elite Sports Bar only operates on a three year term thatis secured by a lease of the same time. As a good bar in the city,the bar operates on a 3000 square feet of space, selling wines andspirit only. This makes the space of the bar sufficient enough tohandle an expansive number of customers and even divide in accordanceto various market segments. However, to understand the market, theowner of the bar needs to comprehensively understand consumerbehavior.
Themanagement of the bar is ready to understand the dynamic consumerbehavior as part of engaging in strategies that will make the barcompetitive and profitable after paying the $4000 monthly lease.Among them is the inclusion of country music in addition to whatother best music customers will love. This paper is prepared todescribe the importance of understanding consumer behavior for thebar. In addition, the paper will highlight the impact of theunderstanding of consumer behavior on the market and services of thebar. Moreover, the owners of the bar will find the recommendationsproposed in this paper for their start up business in Melbourne City.
Importanceof Understanding Consumer Behavior
Serviceto the customer
Tostart with, it is through the understanding of the consumer behavior,the management of the bar will recognize the position that thecustomer holds in the business. Blackwell (7) argues that thisunderstanding reveals to businesses that the customer is the mostimportant person in the venture. First, the management of the barwill realize that it is through the focus of their operations on thecustomer that the business will succeed. To make the businessprofitable and pay off the costs of leasing, operating and profitpayback, the management will have to deliver the service to the mostimportant person, the customer.
Theunderstanding of the customer as the central point of the bar makesthe decision making process of the bar simple and strategic. This ispossible by considering the effect of the decisions of the businesson the customer (Blackwell 8). As the most central person in thebusiness, the management will be forced to plan and think with thecustomer in the mind (Karniel and Reich 33). Through this approach,the services of the bar will focus on making the drinking experienceat the bar enjoying. Moreover, the business will create a culture ofvaluing and treating the customer with respect as the most importantperson in the business.
Identifyingthe best drinks, facilities and Entertainment
Understandingof consumer behavior will be important in the identification of themost appropriate product packages for the customers. The bar hasthree main elements of its product package, namely the drinks, nightclub facilities and entertainment. By understanding the diversitiesin the tastes and preferences of the consumers, the management willbe able to identify the fast moving products and services (Foxall27). This will save the management a lotof money by avoiding tying crucial working capital in undesireddrinks. Being in the alcohol industry, the owner of the bar faces avolatile risk of spending money on stock of drinks that are notcustomer favorites in Melbourne City.
Theowner of the bar is currently undecided on the type of outlook togive to the bar. This explains how ignorant the management is inregard to customer needs, preferences and tastes. According toKarniel and Reich (21), this is a situation that leads to theintroduction of business image or products that do not reflect thepreferences of the customer. The understanding of the consumerbehavior will be the most appropriate way for the manager to decideon the type of look or feel the bar should have. The bar shouldappeal to both gender and all the classes of customers either on thesocial or economic basis. This can only be done by establishing factsabout consumer behavior in Melbourne City.
Thetype of music to be played in the club will also be determined by theunderstanding of the consumer behavior in Melbourne City. The type ofmusic to be played in the club should be a selection of the customersand not the manager or the owner. Currently, the manager isconsidering playing country music, simply because he loves it. Thisis another evidence of the ignorance the owner has on the customerneeds. In fact, the question he has not asked is simple do all thecustomers in Melbourne City love country music? The answer to thatquestion will be determined by the extent of his understanding ofcustomers in Melbourne City in regard to entertainment and nightclubbing.
Inregard to serving food at the club or the bar, the owner seems tohave portrayed further ignorance in consumer behavior. To serve foodor not is not to be left to the opinion of the owner, but the needsof the customers. As recommended by Kuester(110), the understanding of the consumerbehavior will determine the exact needs the consumers in MelbourneCity want and how they want it. If consumers want to be served foodwhile at the bar, the owner has no choice but to offer the service.Otherwise, he will lose customers to bars and nightclubs that canserve them food. This will negatively reflect on his cash flow, whichwill lead to closure of the business when he fails to pay the $4000lease amount.
Understandingthe consumer behavior will enable the management to plan the bar withthe social dynamics in mind, as to why different customers drink, ortake a night out. According to Kahn (45), different customers belongto different social classes. Therefore, each social class of thecustomers has its own motivators and reasons for buying differently(Foxall 47).This will make the management organize the bar for each of theseclasses in order to meet the diverse needs of each one of them. Thisway, the owner of the bar will analyze the customers in MelbourneCity and serve them each group with its own uniqueness.
Forinstance, the main customers’ needs in the city could from themiddle class earners who desire a classy hang out with a drink asthey enjoy sporting actions on the bar and on the media. For these,the bar could provide a good ordinary lounge with a sereneenvironment and sporting facilities. The secondary target customerscould be high income earners. Their social need may be the desire acool place to join with friends for a drink and sports games andfacilities. This customer group is mostly composed of the employedpeople who spend time in social drinking facilities as well as sportscenters and media channels. With several sporting teams andfacilities surrounding the neighborhoods in Melbourne City, thepotential middle-class consumers in Melbourne City will admire comingto the Bar.
Theunderstanding of consumer behavior will help the management of thebar to understand the changes the customers experience in terms ofpreferences and tastes. This prediction is in relation to masschanges in product trends affecting both from the suppliers andconsumers (Kahn 19). Through this understanding, the bar owners willbe able to predict the future of the market. This way, the bar willadjust to the changing needs of customers. For instance, if manycustomers anticipate drinking more beer during the summer, then thebar owner will predict and look for more financing to stock moredrinks. In another example, customers may change the type of drinksthey take due to changes in the taste or manufacture of the drink,this will happen with full knowledge of the customer, who will reducethe stock in the affected drink.
CompetitiveAdvantage and Positioning
Throughthe understanding of consumer behavior, the management of ABC barwill be able to understand the market. This will be possible byunderstanding the tastes, preferences and special needs of thecustomers of all social and economic classes. Through theunderstanding of consumer behavior, the management will be able tosegment the market, according to the needs of each unique customer ora class of customers (Kuester 112).The bar owner will be able to understand the consumer-relatedchallenges that the bar owners in the Melbourne City face. Therefore,the owner of the bar will strategically make decisions to solve thechallenges based on the consumer’s side and not on the side of thebar industry.
Theneeds of all the consumers are reflected in the market situation,which is the entire bar industry in Melbourne City. Therefore, byunderstanding the consumer behavior, the owners of ABC bar willcomprehend the market situation of the city. This will be importantin the formulation of strategies of marketing the bar and attractingnew customers. As a start-up, the bar will need to outsmart theexisting ones. This can most appropriately be done by understandingthe needs of the consumers in their desire to party, spend time inclubs and engage in drinking. This will make the bar competitive andfriendly to customers.
6-MonthAction Steps for the Start-Up Bar
Thefirst action that I will help the owner of the bar to take is tocarry out a comprehensive market research on the needs, tastes andpreferences of the consumers. This will reveal all the facts that thebar need to know about drinkers and revelers in Melbourne City.Through the facts and information provided by the consumers, themanagement will need to process the information and understand thebehavior of the consumers in the market (Kuester110). Through this understanding, thebar will be able to design their facilities, entertainment and selectthe drinks to stock, as well as the quantities of each. This way, theowner will realize the type of music to play in the bar and not playcountry music.
Anothermajor action is to use the information to understand the marketsituation in the city of Melbourne, from the perspective of thecustomer. This will reveal competition for customers in the sportsbar industry, besides increasing bars located in the conventionalparts of every street in Melbourne. The customer information willhelp the bar owner understand the services the customer appreciatesin the top sports bars in Melbourne and those that they dislike.
Theother most consumer-related action that the owner of the bar shouldtake is to establish plans, programs, facilities, entertainment andother services based on the information. For instance, if somecustomers prefer privacy while others prefer dancing public, theowner of the bar should divide the 3000 square foot spacestrategically, to give space to each of the two diverse customergroups. With such customer-related actions are well implemented,customers will automatically shift to the bar. Additionally, ABCbar’s competitive edge would be the fact that it will be focused onthe consumers.
Understandingof consumer behavior is important for ABC bar since it helps themanagement focus on the customer as the center of the business. Withthe need to remain competitive and gain business performance thatwill sustain its lease payment and profitability, the ABC Bar needsto attract and retain customers. This will only be possible throughthe understanding of consumer behavior. In addition, understandingconsumer behavior will provide with market information, productinformation and also help in making decisions that will leave the ABCBar in a competitive position. To utilize the importance of consumerbehavior information, the management of the bar will need to gatherconsumer information through market research, analyze the informationand make decisions based on the consumer’s perspective.
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