Summit Struggles In Light Of 21 Ordinance

Tony Hamilton, Luke Hernandez, Tim Schmecht, Dustin McAninch, Grace Lowery

The SummitOverview of Business

Owned by Mike PorterOpened in December 2001 in downtown Iowa

CityIt is a bar, restaurant, and nightclub

Current Marketing EnvironmentHas a Website and Facebook pageDirect competition with other Iowa City bars

21-Ordinance• No person under the age of 21 is

allowed in an Iowa City bar after 10pm

• Potential effects on Summit Less patrons Decrease in sales Possibly go out of business

Management Decision ProblemsMDP

How can we increase market share in downtown Iowa City in wake of the 21 ordinance?

Alternative ActionsAdvertise moreSpecial theme nightsLower prices for patronsCelebrity guests

Marketing Research ProblemsMRP’s

What do college students look for in a bar?What specials appeal to students the most?Who would students want to see in a celebrity

guest? What are competitors doing differently to

increase their market share? What are competitors pricing strategies? What can The Summit do differently to

increase profits in wake of the 21 ordinance?

Exploratory ResearchIn-depth Interview

Key questions and answersPossible Reasons for MDP’s

Secondary research findingsLocal paper articlesFacebook page and web site

Observational research

Sampling TechniqueNon probabilityQuota

Males and females Then convenience sample

(friends/classmates/coworkers)Quick & easyNot completely random

Data Collection Method

Face to face Convenience

Target population condensed in one area

Low cost, easily

accessible

Improvements that can be made

Measurement•N

umber of ?’s, types of ?’s, what we discovered:

Our Questionnaire

•Of The Summit

Perceptions

•Specials, events, the website

Awareness

•Gender and age

Demographic

•Atmosphere, specials, 21 ordinance, etc.

Preferences

Do Males or Females visit IC bars more often?Cross tab (gender & avg.

nights a week visit IC bars)

0 nights Males=10.5% (4 males) Females=18.9% (7 females)

1-2 nights Males= 55.3% (21 males) Females = 54.1% (20 females)

3-4 nights Males= 26.3% (10 males) Females = 27% (10 females)

5-7 nights Males = 7.9% (3 males) Females = 0% (0 females)

Males and Females go out about the same amount of nights a week

Outlier: Small amount (3) of Male extremists who go out 5-7 times a week

What Nights Are the Most Popular to Go Out On?Frequency Distribution

Monday = 5% Tuesday = 19% Wednesday= 21% Thursday = 59% Friday = 69% Saturday = 67% Sunday = 4% Don’t go out = 16%

The most people tend to go out on Thursdays, Fridays, and Saturdays (popular nights)

Mon

days

Tuesd

ays

Wed

nesd

ays

Thurs

days

Friday

s

Satur

days

Sunda

ys

Don't

usua

lly g

o0%

10%20%30%40%50%60%70%

5%

19% 21%

59%69% 67%

4%

16%

Days Respondents Usually Go Out

Days of Week

Perc

ent

Sele

cte

d

Chi Square Test of Association Ho: Going out on one popular night is not associated with going

out on another popular night Ha: Going out on one popular night is associated with going out

on another popular nightPeople who go out on Thurs. tend to go out Fri. and vice

versa P-value=.001<.05=α, reject Ho

People who go out on Fri. tend to go out Sat. and vice versa P-value=0<.05=α, reject Ho

Cannot Claim people who go out Thurs. tend to go out Sat. and vice versa P-value=.068>.05=α, fail to reject Ho

Do people who go out on one of the most popular nights tend to go out on other popular nights?

Frequency DistributionWord of mouth = 57.3%Social network = 41.3%Newspaper = 1.3%Word of mouth and social networks are the most

frequent ways people gain info about IC bars

41.33%

57.34%

1.33%

Most Frequent Form of Gaining Info About DT IC

BarsSocial NetworksWord of MouthNewspaper

What is the most frequent way of gaining info on IC bars?

Is Word of Mouth Considered the #1 Way to Gain Info About IC Bars?Hypothesis Test

Ho: % Ranking WOM & SN #1 ≤ 50%Ha: % Ranking WOM & SN #1 > 50%P-value=0 < .05=α, Reject Ho

We have sufficient evidence that Word of mouth and Social Networks are the most frequent ways consumers gain info about IC bars

What Bar Characteristics Influence Bar Choice?

Frequency DistributionDance club = 42Sports Coverage = 39Crowded = 31Seating room = 28Other = 24Uncrowded = 12

People prefer bars that offer a dance floor and/or sports coverage

What are the Most Important Factors in Deciding Which IC Bar to Visit?Frequency Distribution

Drink prices = 37Atmosphere= 26Cover charge =9Speed of service = 2Live entertainment = 1

Drink price and atmosphere considered the #1 factors that influence what bar people go to

Are Drink Price and Atmosphere the Most Important Factors in Deciding What Bar to Visit?Hypothesis Test

Ho: % ranking DP & Atsp most important ≤ 50%

Ha: % ranking DP & Atsp most important > 50%

P-value= 0 < .05=α, Reject HoWe have significant evidence that Drink Price

and Atmosphere are the most important factors in deciding what bar to visit

What is IC’s Favorite Bar?Frequency Distribution

Brothers = 28% Union = 19%Fieldhouse = 17%Summit = 15%DC’s = 12%Other = 9%

Brothers was selected as the favorite bar by the most people

Summit Vs BrothersRan cross tabs between:

Favorite bar & #1 Most important Factor in deciding which bar to go to 76% of those listing Brothers as their favorite bar, listed drink price as

the most important factor when choosing a bar to go toBrothers Drink Prices attract customers and make it a

desirable destinationBrothers Advantage – Drink Prices

Brothers’ 76% compared to Summit’s 36 % shows that Brothers offers more desirable drink prices

Summit should offer better drink specials

Summit Vs BrothersAtmosphere

Summit’s 55% compared to Brothers’ 10% shows Summit offers a more desirable atmosphere

Summit Advantage – AtmosphereSummit should continue to push that they have the

atmosphere the consumers wantKeep the atmosphere desirable

• Sports Bar• Among the respondents who chose Summit as

their favorite bar, only 27% of them preferred a sports bar

• Brothers was above 60% in this area• Recommendations: Focus on

creating/enhancing a sports bar image for summit

Summit Vs Brothers

Summit Vs BrothersDance Club

Summit obviously has an advantage over Brothers in this area

73% of those favoring Summit prefer a dance club Huge compared to 38% of BrothersWhy isn’t Summit successful then?More info!!

Age IssuesAs shown previously, 73% of those selecting

Summit as their favorite bar also selected dance club as a preference

We wanted to see what the mean age of those preferring a dance club wereTurned out to be under 21This could be a main factor for the lack of

success since the 21 ordinance

Age IssueThis made us curious about the avg. age of those favoring Summit

and BrothersThe avg. age of those picking Summit as their favorite bar was 20

This is obviously an issue because the majority of people favoring Summit can no longer go there

Brothers continued success in light of 21 ordinance could be accredited to the avg. age of those favoring them being above 21

Recommendation: Discontinue serving alcohol and promote Summit as a alcohol free

dance club and/or allow BYOB policy to gain under age and of age customers

Key RecommendationsCoupons for drink discounts

Facebook At door on most popular nights

For less popular nights or both

Improve Social Networking Maintain and update Facebook

Events, specials, pictures, discounts Promote on Twitter

Bar Characteristics More emphasis on sports bar

Promote major events heavily Offer specials during games

More emphasis on dance club Schedule live Dj’s Separate upstairs from downstairs (underage dance club)

Questions???