Perceptual Map and Positioning Analysis: Lawrence Bars

Aaron Blackburn, Christopher Finley, and Chad Kyzar Spring 2012

Introduction Our group selected Lawrence bars as our category. Bars are interesting as products because they consist of goods, services, and experiences. The presence of these three factors also allows for greater differentiation between bars. However, bars are also highly imitable, having no barriers to entry beyond branding protections. Therefore while the bar industry has great variation within it, there is also plenty of imitation. Bars can also appeal to a wide variety of market segments. Some establishments will actively seek out particular segments they feel they can best serve and profit from. Other bars do not expend effort in capturing a certain segment. These places attract members from multiple segments, or an individual segment will dominate a bar through reputation and/or chance. There are close to 60 establishments in Lawrence, Kansas that self-identify as being a bar1. These establishments can be segmented, based upon how they offer goods, services, or experiences. There are bars whose primary focus is just in serving drinks, like Harbour Lights, Henrys, and the Cross Town Tavern. Some establishments focus on hosting and attracting live music acts, such as the Jackpot Music Hall, The Bottleneck, and the Jazzhaus. Other bars serve as restaurants and include Dempseys Burger Pub, The Wheel, and Cielito Lindo. Establishments like the Replay Lounge, the Eighth Street Taproom, and Wildes Chateau 24 provide space specifically for dancing. Bars can also be segmented by the clientele they attract. Establishments like Brothers, Bullwinkles, and Lousies West are typically frequented by college students. Shenago Lounge, Willies Bar, and Cadillac Ranch are bars that appeal more to the long-term residents of Lawrence. And then there are places that attract a variety of people like Red Lyon Tavern,
1

Lawrence Marketplace. http://www2.ljworld.com/marketplace/categories/arts-and-entertainment/bars-clubs/.

Wayne & Larrys Sports Bar & Grill, and Johnnys Tavern West. With so many possible avenues of pursuit, bars need to be strategic as to where they concentrate their resources to provide the goods, services, and experiences that lead to profitable success. The Problem Lawrence bars and eating establishments face what many restaurants and bars face, What brings customers into my establishment? and What brings customers back to my establishment? By asking and understanding these two questions, owners can better utilize their core business efficiencies to better attract and retain patrons. As noted, the Lawrence bar scene is saturated with many different choices and experiences, so understanding what their patrons like and dislike can be advantageous to owners looking to differentiate themselves from the competition. As a group, we wanted to narrow down what exactly it is that a patron looks for when picking a bar in Lawrence. Collectively, and with a diverse amount of experiences in a majority of the bars within the city, we derived a list of a couple dozen common variables that we thought were of importance when opening and running an establishment. From this list, after interviews with a handful of reputable local bar owners, combined with our own personal experiences, we narrowed the number of characteristics down to eight. These eight variables consist of: 1) Drink Selection, 2) Drink Specials, 3) Service, 4) Music, 5) Physical Atmosphere, 6) Location, 7) Hotness (Attractiveness) of Patrons, and 8) Place to Get Drunk. Any such findings could give light into what a particular bar should be focusing on to give themselves any sort of differentiation or advantages in attracting and retaining customers.

Methodology Utilizing an expert panel of local bar patrons, we chose six bars to concentrate on for our survey. These brands are The Cave, The Hawk, Quintons Bar & Deli, The Sandbar, Tonic, and Yacht Club Sports Bar & Grill. They are bars that are very familiar to our sample group. It was important to select establishments that survey participants know because they are more than likely to have well defined opinions and experiences with these bars. Thus, their perceptions would be more informed. Through our research, we categorized a majority of the bars in Lawrence into 3 typical types: 1) Traditional Watering-hole, 2) Cater to dancing, 3) Restaurant with a bar. The Hawk and The Sandbar are more traditional watering-holes. The Cave and Tonic are places that cater to dancing. Quintons Bar & Deli and Yacht Club Sports Bar & Grill are establishments that operate primarily as a restaurant during the day. The diversity in brands would show if perception diverges between types. The bars familiarity to our sample group and their variety gives an opportunity for accurate and wide-ranging consumer perception. Our survey participants were chosen from our current, and recently former, university classmates. The participants were both male and female, between the ages of 21-35, college educated (either only a bachelor degree, working towards a graduate degree, or holding multiple degrees), and technologically inclined. Their comfort with technology was key to the way we chose to distribute the survey. We used SurveyMonkey.com to make the questionnaire, and then distributed through social media networks on Facebook and LinkedIn. Because our sample group was narrowly defined to people who would be familiar with the selected bars, the natural choice for our two major market segments were males and females. These segments are well recognized by the industry, as evident in countless ladies night promotions bars of every

variety use. SurveyMonkey.coms premium service allowed us to filter responses by our segments, which helped us greatly in reviewing the results. The survey consisted of 8 questions. The first question defined which market segment the participant belonged, male or female. In the following 6 questions, participants were asked to score the attributes for the selected bars from 1 to 7, where 1 is the Least Satisfactory and 7 is the Most Satisfactory. Finally, participants were asked to rank the eight attributes from most to least important. From which we were able to determine which two attributes were most influential to each of the market segments. The survey offered no reward and was anonymous and unsolicited. Therefore, it can be stated that participants answers are truthful and in good faith. Results The data collected from the survey was mostly naturally intuitive, but there were some surprises. As stated, the results were broken into eight variables from two different segments (men and women). Collectively, the two most important variables considered when choosing a bar for both segments were Service and Physical Atmosphere. On a scale from 1 to 7, with 7 being most important, they ranked 5.59 and 6.00 respectively. When breaking apart the two segments, of all of the variables, females rated service, physical atmosphere and music as the three most important. Males on the other hand valued physical atmosphere, location, and service as their three most important. Females found drink specials, music, and service more important than their counterparts, while males valued physical atmosphere more than females. The biggest discrepancy, which did not come as much of a surprise, was how much higher males ranked the importance of hot patrons in their choice of bar versus that of females.

When breaking down the bars individually using the most important variables derived from our survey (service and physical atmosphere), The Sandbar ranked the highest and The Hawk received the lowest ratings. Of the six bars we chose to have evaluated, two of them are dance oriented, two restaurant style, and two are simply bar bars. Not surprisingly, of the two dance oriented bars, Tonic and The Cave, both ranked very respectively in physical atmosphere. On the other side of the spectrum, these two bars both ranked poorly in drink specials and service. These results do not come as a surprise to us, as we speculate that customers go to these bars for their entertainment and are not as interested in drink specials and service. It was interesting comparing the watering hole bars of our group, The Sandbar and The Hawk. These two bars ranked first and last respectively when comparing them to service and physical atmosphere. And not surprisingly, as these two bars specialize in only serving drinks, they both ranked the highest as being the best place to get drunk of all the bars. The Yacht Club and Quintons fall into the last category of our bar selections as being the restaurant type bar. These to facilities both ranked exceptionally well in drink selection and drink specials and service. The Yacht Club in particular stood out from the rest of the bars (other than the Sandbar) as being far superior in service which makes sense being that much of their business is dependant on food and not just a late night college crowd interested in only drinking and socializing.

Conclusion After conducting multiple forms of research it is clear that the competitive advantage for bars to capitalize on in Lawrence is to have great service and a welcoming, enjoyable atmosphere. These results did come as a minor surprise however, as we were only half correct. We did predict that atmosphere would be important, as this is a significant part of enjoying yourself at a bar. The importance of service however caught us off guard. When dividing the two segments, our hypothesis was that men would be much more interested in the type of women that were at the bar and that women would be more concerned about drink selection. We felt a number of women elect for more exotic, hard liquor drinks, whereas men are for the most part satisfied with just drinking beer. These two assumptions were

proven wrong though, as men found hotness of patrons being only the fourth most important characteristic, and women ranked drink selection as sixth most important. Individually, the Sandbar came out as being the customer favorite thanks to its solid rankings in service, atmosphere, drink selection and location. The Hawk finished last due to poor scores in drink selection, service, music, atmosphere, and hotness of patrons. This was not much of a surprise to us as the Hawk has a pretty poor reputation for anyone over 21. The stunner in the bar category was Tonic which we thought would have ranked better than secondto-last because each week there is almost always a large line outside the door of people waiting to get in. In the end, it appears that each bar has one or two characteristics that it excels in which likely keep the profits coming. Our research and survey gave great insight into some of the bars in Lawrence and made it clear that service and physical atmosphere are king when it comes to pleasing the 21-35 aged bar goer.

Appendix Question 1 & Results:

Please Note: The attributes surveyed for Questions 2 through 8 are (from left to right): 1) Drink Selection, 2) Drink Specials, 3) Service, 4) Music, 5) Physical Atmosphere, 6) Location, 7) Hotness (Attractiveness) of Patrons, and 8) Place to Get Drunk. Question 2 & Results:

Question 3 & Results:

Question 4 & Results:

Question 5 & Results:

Question 6 & Results:

Question 7 & Results:

Question 8 & Results: