diploma paper finale
TRANSCRIPT
An exploration into the factors that have caused the decline of the Irish pub industry.
Arjun O’Sullivan
Measures and solutions undertaken to solve these issues.
A research paper submitted in partial satisfaction of the requirement for the Swiss
Higher Diploma in Hotel Restaurant Management
By
Arjun O’Sullivan
Copyright © 2013
Swiss School of Tourism and Hospitality
Chur, Switzerland
i
Table of Contents
List of Figures ……………………………………………………………………………….iii
List of Table………………………………………………………………………………….iv
Acknowledgement…………………………………………………………………………..v
Abstract of Diploma Paper………………………………………………………………...vi
Chapter:1. Introduction..............................................................................................................9
1.1 Ireland: Country Overview.................................................................................9
1.2 Pub Culture History...........................................................................................9
1.3 Irish Pubs: Global Influence............................................................................11
1.4 Initial Situation.................................................................................................12
2. Main Issues...........................................................................................................15
2.1 Trends and Population Dynamics....................................................................15
2.2 Identifying The Main Issues.............................................................................16
2.3 Improved Technology......................................................................................16
2.3.1 Customer Standpoint.................................................................................17
2.3.2 Pub Standpoint..........................................................................................17
2.4 Live Entertainment & Events..........................................................................18
2.4.1 Customer Standpoint...............................................................................18
2.4.2 Pub Standpoint.........................................................................................19
2.5 Higher Quality of Food....................................................................................20
2.5.1 Customer Standpoint................................................................................20
2.5.2 Pub Standpoint..........................................................................................20
2.6 Smoking Ban....................................................................................................21
2.6.1 Trend.........................................................................................................21
2.6.3 Solutions....................................................................................................23
2.7 Retail Outlets....................................................................................................25
Table of Contents ii
2.7.1 Overview...................................................................................................25
2.7.2 Threat to Pub Industry...............................................................................26
2.7.3 Solutions....................................................................................................27
3. SWOT Analysis......................................................................................................30
3.1 Usage and Importance.....................................................................................30
3.2 SWOT Analysis of Pub Industry.......................................................................31
3.2.1 Strengths...................................................................................................31
3.2.3 Weaknesses:.............................................................................................32
3.2.4 Opportunities.............................................................................................34
3.2.5 Threats......................................................................................................36
4. Conclusion..............................................................................................................38
Appendix………………………………………………………………………………….....40
References………………………………………………………………………………….41
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List of FiguresFigure
1. Sean’s Bar: Oldest Pub…................................................................................9
2. Chart showing change in visits of customers…………………………………..11
3. Table showing percentage of pub owners that conducted appraisals………12
4. Data showing the percentage decrease in value of a pub………………….. 13
5. Percentile of smokers according to different age groups…………………… 21
6. Dubai Smoking Lounge………………………………………………………… 23
7. Electronic Cigarette…………………………………………………………….. 24
8. Example of how pubs could market…………………………………………... 27
9. Template of SWOT Analysis…………………………………………………… 29
10. Chart depicting migration within Ireland………………………………………. 35
iv
List of tables
Table
1. Number of Irish pubs outside of Ireland………………………………………. 11
v
Acknowledgment
I would like to extend my gratitude to all who have assisted me in writing my diploma
paper and providing me with resourceful feedback and contributions.
I would also like to thank my main advisor, Mr. Helmi, who has provided much
valuable guidance and assistance whenever I needed it. Secondly, I would like to
thank my external advisor, Mr. Tom Campbell-James who has given me some in-
depth insight through the process of my writing. Both were extremely helpful and
have always been present whenever needed. Apart from my advisors I would also
like to thank all my teachers as all of them provided me with help at any time I
needed it.
I would also like to thank my father, mother and sister for also giving me feedback
and support whenever needed.
Finally, I would like to further thank my father who established the foundations of the
paper and showed me the best direction to take.
Thank you,
Arjun O’Sullivan
Passugg September 2013
Abstract vi
Abstract
The main purpose of writing this paper is to investigate the domestic issues
concerning the pub industry in Ireland and to provide solutions to these issues.
The paper is divided into three chapters concerning the issues and solutions of the
pub industry. Within the first chapter, information on Ireland and the history of the pub
industry are provided alongside the current situation of the pub industry.
The second chapter highlights the main issues affecting the industry; trend
management, the smoking ban and competition versus retail outlets. Alongside the
examination of these issues, the solutions for them will be discussed and how it
should be implemented.
In the third chapter, a SWOT Analysis of the pub industry is conducted to determine
the many other different factors and their roles inside the pub industry.
Finally, in chapter four, an arrival to how the pub industry can improve and become
more profitable is presented.
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1. IntroductionThe Irish pub industry has faced a multitude of challenges in the last ten years and
seen a tremendous fall in both its sales and employment. Goodfellow (2012) found
that since 2004, the industry has seen a 10% fall or more specifically; the closings of
805 pubs. Furthermore, Goodfellow (2012) also states that from 2005 until 2012,
pubs have been closing at the rate of one establishment per day. This slump is due
to different factors that have been present over the last few years due to many
different factors both external and internal which combined together are causing the
pub industry extreme concerns that could possibly spell the downfall of the industry.
However, there are many different solutions that will be presented that could possibly
assist in countering the present difficulties and maximize revenue for the future.
These solutions mainly cover the aspects of marketing, human resources and event
management, which continuously link up and are interconnected.
1.1 Ireland: Country OverviewThe Republic of Ireland, The Golden Island, or simply known as Ireland, is a small
nation filled with much history, scenic landscape and culture. One of the biggest
influences of these aspects is the high regard to social interaction within Irish culture.
Irish people are known to be extremely friendly, sociable and out going in their
general persona. This is a great influence to Ireland’s rich heritage and culture, which
can noticed both on a domestic and international level. This strong global cultural
outreach has affected many worldly features, especially the hospitality industry. Irish
hospitality has a strong standing within the overall concept of hospitality and within
the many characteristics that shape Irish hospitality, the Irish pub culture is one of the
standouts.
1.2 Pub Culture HistoryIrish pub culture is not only a dominant force within the Irish hospitality industry but
also within Irish culture. Irish pubs, first called public houses, have been functioning
for a very long time with the oldest pub, named Sean’s Bar, serving customers since
the tenth century (Scanlon 2006). This strong traditional concept is further
exemplified by the fact that most Irish pubs started of by being owned by different
independent families. The ownership and control of pubs would then be passed down
to the next generation and this has been the case for most Irish pubs. At first, Irish
pubs began as establishments that provided both alcoholic beverages and general
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grocery items with a few also providing rooms for travellers. However, with the
introduction of retail supermarkets to Ireland in the 1960’s, the “supermarket” side of
the Irish pubs became non-profitable, and this led to pub owners to turn their focus
on to just the licensed selling of alcohol (Scanlon 2006).
Figure. 1: Sean’s Bar. The oldest pub in Ireland, source
http://www.cntraveler.com/daily-traveler/2013/03/photos-irish-pubs-bars-st-patricks-
day_slideshow_item0_1
In addition to the strong view on social interactions within Irish culture is the well
renowned stout drinking habits of Irish people. Alongside this strong drinking culture
is the Irish dominance in the production of alcoholic beverages. The likes of
Guinness beer and Jameson whisky have become modern day symbols of Ireland
and its culture (O’Neill’s Bar 2012). Keeping these aspects in mind, the common Irish
pub has consequently served to be a perfect dwelling for the consumption of alcohol
at a pleasurable pace and social interaction with family, friends or strangers (O’Neill’s
Bar 2012). These social interactions can be very informal and unplanned and at the
same time can be formal events such as; weddings, birthdays, funerals, christenings
and many more. Apart from being a common meeting ground, Irish pubs also play a
significant role in the artistic property of Irish culture. Many famous Irish poets and
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writers such as Oscar Wilde and James Joyce have created their best work in a pub.
Besides influences on Irish literature, Irish pubs have also had a solid impact on Irish
music. Irish pubs welcome music and are commonly known for hosting both planned
and spontaneous musical sessions, where anyone with a talented hand for playing
music can showcase their talent within an Irish pub (O’Neill’s Bar 2012). Most people
who frequent Irish pubs will witness at least one form of musical performance at one
time or another. This shows that Irish pubs have had a large influence on a large part
of Irish culture and has constantly played a major role throughout Irish history
(O’Neill’s Bar 2012).
1.3 Irish Pubs: Global Influence Irish pubs have made a strong statement throughout the world and there are many
Irish pubs located throughout the world, whether acting as stand-alone
establishments or as part of another establishment. According to Irish Abroad (2009)
there are officially 3710 Irish themed pubs located outside of Ireland. Below, Table 1
provides a breakdown of the number of official pubs in 11 different regions in
accordance with Irish Abroad (2009):
Table. 1 Number of Irish pubs outside of Ireland
Region Number of Pubs
United Kingdom 178
United States America 1687
Australia 91
Europe 684
New Zealand 22
Asia 97
Africa 11
Central America 20
South America 53
Middle East 18
Total: 3
170
As Table 1 shows, there are a lot of official Irish themed pubs located outside of
Ireland, which is a relatively big number considering how Ireland is such a small
country and yet has made such an impact throughout the world. However, this table
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does not take into account the more modern Irish pub-restaurants and the smaller
and family owned Irish pubs within these different regions. Furthermore, this table
reiterates the importance of Irish pubs in Irish history as this table shows how Irish
people have migrated all over the world, as it shows, the United States has the most
pubs due to the heavy migration of the Irish population to the United States during
the 17th and 18th century.
1.4 Initial SituationThe current situation of Irish pubs is not a good one; the industry is finding itself in a
steep decline that does not look like halting anytime soon. According to the Irish
Vintner’s Association, over the last 5 years, the Irish pub industry has faced a 34
percent decrease in the trade while more than 800 pubs are facing severe financial
issues (O'Carroll 2012). Also, more than 20 percent of members (pub owners) of the
Irish Vintner’s Association have stated that they are facing a crisis while more than
54,000 workers in the pub industry could face job loss at anytime. From almost 2005,
the number of pub licenses being issues has decreased sharply and more than 60
pubs in Ireland’s biggest counties have shut down since 2006 (O'Carroll 2012).
According to Kiely (2012) who conducted a survey among Irish pub owners to
establish their outlook and gain figures from the owner perspective, many of these
pub owners have fairly negative views and assessments of their establishments.
Figure. 2: Chart showing change in visits of customers, source
http://www.rsmfarrellgrantsparks.ie/wp-content/uploads/2012/10/FGS109-Pub-
Industry-Survey_WEB.pdf
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Figure 2 shows the decrease in the average number of visitations from customers
during the year 2012, and as it shows, 65 percent of owners saw a 10-20 percent
decrease in customer attendance and visitations. This is an enormous decrease in
for any hospitality establishment, let alone an Irish pub. Moreover, many pub owners
also had their businesses appraised during the year of 2012 and almost half of these
appraisals showed pubs to have a decrease in valuation (Kiely 2012).
Figure. 3: Table showing percentage of pub owners that conducted appraisals,
source http://www.rsmfarrellgrantsparks.ie/wp-content/uploads/2012/10/FGS109-
Pub-Industry-Survey_WEB.pdf
As shown in Figure 3, 45 percent of pub owners who received an appraisal saw a
decrease in their establishments’ valuation. Also, another relatively worrying aspect
of the information shown in Figure 3 is that 51 percent of pub owners have not
conducted appraisals and thus there could be a lot more pubs that have faced a
decrease in value. Finally, pub owners were questioned on their thoughts of exactly
how much of a decrease had occurred on their respective establishments.
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Figure 4: Data showing the percentage decrease in value of a pub according to the
owner, source
http://www.rsmfarrellgrantsparks.ie/wp-content/uploads/2012/10/FGS109-Pub-
Industry-Survey_WEB.pdf
Figure 4 casts a very dark shadow across the pub industry because the figures are
based directly on the opinions of pub owners of their own establishment, where it
would be naturally believed that the respective pub owners would not cast such a
negative outlook on their own property. However, as shown in Figure 6, many pub
owners (64 percent) do consider their properties to be on a sharp decline in terms of
value. From this, at least 58 percent of Irish pub owners have completed capital
refurbishments in an attempt to rejuvinate customer attendance and improve on
revenue and sales (Kiely 2012). Thus, the current situation is looking fairly negative
with most pub owners feeling highly pessimistic about the pub industry and the
direction it is heading in. This is also more worrying as if the pioneers of the pub
industry do not believe in their own industry then the same feeling will be extended to
the customer base frequenting Irish pubs meaning that the situation with Irish pubs in
Ireland is not a good one.
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2. Main Issues
2.1 Trends and Population DynamicsA major issue facing the Irish Pub industry is the demographics of the Irish population
and the trends that are affecting the different groups. There have been many
changes within both the elderly population of Ireland and the younger generation of
Ireland. These changes in the outlooks of the various groups within the population
have had a significant impact on the Irish pub industry as demographics have a
significant issue on trends, which are extremely important to the hospitality industry.
Trends are highly important for any industry as the concept of trends allows an
establishment or company to decipher exactly how a market base is changing or
developing in a certain direction. Trends are directly connected with population
dynamics, and Ireland is currently facing an increase in the younger generation of the
populous. According to Index Mundi (2012), 44.5% of the total 4 million people in
Ireland are in between the ages of 25-54 years, and this should be the target market
that Irish pubs are catering to. However, Irish pubs have failed to notice the different
trends that make up this section of population because of various reasons.
One of these reasons is the heavy reliance on older business strategies, which have
proved to be successful in the past, but are not applicable in the present day. This is
a popular phenomenon within the hospitality industry, specifically smaller
establishments, such as the Irish pub. Edmiston (2007) found that many small
establishments rely on business strategies that are outdated or were not developed
on. This same reason can be noticed with Irish pubs as most just relied on age-old
business strategies that are not applicable in the hospitality industry today. In order to
improve these strategies, there are many techniques that Irish pubs can use that are
both cost-effective and have already proven to be successful.
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2.2 Identifying The Main IssuesThere are a number of various techniques that can be used to target the market
segmentation that is available to pubs. These techniques are mainly related to
marketing and the idea of retaining and turning your customers into clients. Firstly, to
cater to certain market segmentation, an establishment must understand the market
segment that is being catered to before any strategies can be applied (Kotler, Brown
and Makens, 2010, ppg.197-206). To implement this strategy, pubs can use many
techniques in understanding their target market. The requirements for this is to first
segment the market in accordance with its graphics; geographic, psychographics and
behavioral graphics (Kotler, Brown and Makens 2010, ppg.197-206). From this, Irish
pubs can establish where their main customers are located, what they think and how
they behave. Once these notions are understood, it can finally be understood what
type of customers are being catered to and what exactly they want from an
establishment so that these wants can be catered for (Kotler, Brown and Makens
2010, ppg.197-206). Now as stated before the main target market for Irish pubs are
the 44.5% of the Irish population aged between 25-54. This specific market
segmentation would frequent pubs more often if there were certain changes
implemented within the pub industry and these changes identified by Kennedy (2012)
are:
Better Technology
Live Entertainment
Higher quality standard of food
2.3 Improved TechnologyAs stated, pubs in Ireland are very outdates or static in their business strategies and
rely too much on old techniques that do not apply to the present day environment of
the hospitality industry. In relation to this, the concept of technology has not yet been
implemented within most Irish pubs, which is causing a major problem in with
customer numbers as technology plays such a big role within society.
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2.3.1 Customer StandpointImplementing simple technological aspects will bring about great benefactors for
customers and will also enhance the customer has when attending an Irish pub. It
also provides customers with the chance to show-off their night out which will make
them want to frequent the establishment again but also use pubs as a valuable
source to quench any technological needs. Rothery (2012) stated that in an survey
conducted by Molson Coors; more than half of the 18-24 year old demographic of the
Irish population would frequent a pub establishment more often if there was free
wireless internet available. The younger generation of today’s world tends to need to
stay connected online, thus implanting a free wireless system will increase profit
revenues and visitations from the younger generation (Rothery 2012). Also, another
benefit to customers being connected online will be free marketing, as the latest
trend in the world regarding technology is to share activities and whereabouts on
social media networks. For example, Rashtchy, et al. (2007) recants that the latest
fad is that people like to share images of their night out and what they are exactly
doing but also more specifically sometimes what they are eating or drinking. With this
comes free marketing, as customers will take pictures of the establishment and what
they are doing which is free marketing for pubs and these pictures will be shared to a
various number of people who will then gain knowledge about the specific pub.
2.3.2 Pub StandpointBetter technology does not better only present sales and revenue but more
importantly, allows an establishment to maintain the consistency of sales and
revenue. Within the hospitality industry, it is found that managing trends becomes
much easier through the use of technology (Buhalis and Costa 2006, ppg. 7-14).
Since the world is continuously changing and people’s interests are seemingly short-
lived, monitoring trends through technology allows many hospitality establishments to
cater to customers better (Buhalis and Costa 2006, ppg. 7-14). Apply this to pubs
and through the use of technology, pubs can manage trends and predict what
customers will want in the future. Furthermore, Bolton and Tarasi (2007) emphasize
the importance of turning customers into clients and making the customer a part of
the business culture and customers should not be regarded as a separate entity and
with the use of better technological use from pubs, the industry can start turning more
customers into clients. Shugan (2009) further stresses the importance of technology
and online channels to turn customers into clients, as it was found that when
feedback on an establishment is given through an online medium, it creates a
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through the use of better technology, pubs can better communicate with their
customers and create a more personal relationship with customers. Another positive
advantage to the use of better technology is promoting and creating events through
the online distribution channel. Mangold and Faulds (2009) found that most
consumers respond more effectively to promotions and events through social media
and online channels than compared with other distribution channels. This means that
through the use of these several Internet portals and social media sites, pubs can
reach a broader customer base while establishing personal connections with
customers.
2.4 Live Entertainment & Events The concept of live entertainment is not new to the pub industry; however, there can
be many developments on this notion. Expanding on live entertainment and merging
this with the notion of events can change the outlook and stem the decline of the pub
industry.
2.4.1 Customer StandpointEvents are very important to the hospitality industry as events can generate massive
revenue for an establishment. Certain hospitality establishments can rely just on
events and banquets to sustain the profitability of their business. Maguire and
Hanrahan (2013) found that many Irish hospitality businesses are starting to turn
directly to events as they view events as the most profitable way to pick up business.
Thus, from this, pubs should start throwing small events that will promote a pubs
image and also bring a new touch to the pub industry. For example, Hampson (2012)
found that a pub located in the coastal county of Kerry entitled Ring Lyne is planning
to sponsor a dart competition where all the proceeds will be donated to the nearby
hospital as a technique to bring in more customers. The pub is slowly starting to pick
up on business because of this and this example also reiterates the importance of
customer interaction. The concept of this event by the Ring Lyne pub is perfectly
designed as customers can enjoy themselves while feeling a sense of moral
goodness from knowing that the proceeds of their competition will be benefiting an
important aspect of the community. Another example of this as found in Hampson
(2012) with the same pub, Ring Lyne, which has recruited a local college student to
perform short stand-up comedy sketches for the attending customers. Again, this is
highly beneficial because this college student will encourage his own friends to
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attend the pub plus it will also allow a present customer to showcase their talent,
which could encourage other potential talented customers to stage their own talent.
2.4.2 Pub StandpointOrganizing and hosting events can be very beneficial for the revenue side of the pub
industry. Most Irish pubs can only afford to organize fairly small events, however the
impact of small events can be phenomenal as major events. As stated in Preece
(2007), small events create a high number of repeat visitors to an establishment as
customers will always feel that each time these events are organized, there will be
something new or different to attend. This is beneficial to Irish pubs because with
customers returning often to an establishment will result in not only revenue gains,
but also allow pubs to retain these customers and turn these customers into clients.
Additionally, small events do not cost a lot of money to host, but can generate a
heavy amount of income and can result in a very high profit margin. Apply this to
pubs and this will produce great results as pubs can lower their costs during the
tough period but reap in plenty of benefits due to the success rate of small events.
Another example of this is found in Preece (2007), which states that many hospitality
establishments in Scotland have started investing more money into small events and
this is expected to bring in a large economic return. Consequently, from observing
this action in a country very similar to Ireland, it is fairly obvious that Irish pubs should
start investing more into hosting small events as it will reap plenty of revenue benefits
and provide a much more profitable base for pubs to start working with.
Besides having the potential to have a very positive influence on the financial aspect
of Irish pubs, the implantation of more events will also have a positive impact on the
community side of the pub industry. As mentioned in this paper before, Irish pubs
were central to their respective communities and provided a place for people to
interact which each other in a comfortable environment. Thus, according to Hampson
(2012), if pubs can continue to adapt and bring in more events while incorporating
the customer with these events it will re-create that same level of importance in which
pubs held within the community. This means that pubs will have a greater role in the
community and thus pubs can enhance their image through the use of aspects such
as Corporate Social Responsibility. As mentioned before, the Ring Lyne pub example
shows that the image and knowledge of the pub grew just by providing for another
element of the community.
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2.5 Higher Quality of FoodMost Irish pubs do not serve any food to their customers and the pubs that do serve
food mainly serve dishes that can be easily referred to as generic fast food.
However, the implementation of a higher quality standard of food can prove to be
extremely beneficial to the average Irish pub.
2.5.1 Customer StandpointProviding better options for dining will prove to be highly beneficial from a customer
point of view. Firstly, a recent trend in the last few years within the world is the
concept of “foodie groups” or foodies, which is defined by Weston (2006) as being
"someone who has an ardent or refined interest in food." With this trend, pubs
serving good food can engage a new market of customers who are interested in food
and dining and provide a new reason for customers to frequent a pub. Also, the
implementation of a higher food quality could potentially entice a market that would
not normally consider pubs as an establishment that would provide enjoyment or
pleasure. It will also increase the number of alternatives that Irish people look to
when looking to have a decent dining experience. This introduction of a better
standard of food will also bring more customers together which will only further
improve community ties and provide for new links and connections to be established.
Better food quality can also bring substantial customer interaction with pub
establishments as customers can provide feedback to this new concept and thus feel
as if they were part of the tailoring of better food quality within the pub industry.
2.5.2 Pub StandpointBringing about a higher quality standard of food will be advantageous to the pub
industry for many reasons. Firstly, pubs will be able to create a new opportunity of
revenue for themselves as pubs can now start to cater to a new market of customers
looking for a comfortable dining experience and many of these customers could also
potentially fall into a higher income class of the population. The image of pubs will
also be enhanced through this, as pubs will be seen as making a change to their
business attitudes, which can be the starting point for a more reputable image.
According to Deegan (2013), between years of 2011 and 2012, there was a ten
percent increase of people frequenting higher quality dining establishments. This
shows that pubs should start considering the introduction of a quality dining
experience, as there seems to be a growing trend within the Irish population of eating
out in higher quality food establishments. Moreover, despite catering to a growing
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trend, pubs can also develop this new concept further and transform the pub industry
and lead it into many new directions. For example, with the implementation of this
higher standard of dining concept, pub establishments can transform into large dining
premises that could have large cover-turnovers compared to the kind of cover-
turnovers being faced at the moment. Finally, the introduction of a higher quality
dining service could enhance the traditional and community values that are rooted
within the pub industry. Pubs could provide traditional Irish food while simultaneously
implementing a high standard of dining quality thus maintaining their traditional
elements but also providing a memorable experience for customers.
2.6 Smoking BanOne of the issues addressed with the slump is the smoking ban that occurred in 2003
in Ireland. The smoking ban legislation, implemented by the Irish government,
outlawed the smoking of cigarettes in workplaces and public areas all over Ireland.
2.6.1 TrendBefore examining the impact of the smoking law in Ireland, the history and trend of
smoking in Ireland must first be understood. A study of the prevalence of smoking
within different age groups of people conducted by in Ireland HSE (2012) provides a
great deal of information on the trend of smoking within Ireland.
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Figure 5: Percentile of smokers according to different age groups, source
http://www.hse.ie/eng/about/Who/TobaccoControl/Research/Chart_1_2.html
As figure 5 shows, the highest percentile of cigarette smokers are people between
the ages of 18-34. This information is highly important as it shows that the customers
who frequent the pub the most also lie in the highest percentile of smokers.
2.6.2 Effect on Pub CultureSmokefreeaction (n.d) found that a large number of people working in Irish pubs lost
their jobs directly after the smoking ban was implemented because of the low number
of customers visiting pub establishments. Furthermore, smokefreeactions (n.d) also
found there was a significant drop in pub sales directly after the smoking band was
implemented. In addition to this evidence, Corporate Responsibility Consulting (2010)
further found that within 48 months of the implementation of the smoking ban, 1097
official pubs closed down. Furthermore, there was an 11% decrease in beverage
sales within that same time, and the combination of both these factors overrides
critics claiming that it was just coincidence (Corporate Responsibility Consulting
2010). Finally, (Corporate Responsibility Consulting) further stated that there was a
definite downward trend of pub sales after four years of the implementation of the
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smoking ban. In addition to this, I conducted an interview (see Appendix) with the
head of the Vintner’s Federation Ireland who act as the pub union, Padraig Cribben,
about the influence of the smoking ban and its effect on the pub industry. Based on
the interview, Mr. Cribben did highlight that the smoking ban was not the sole cause
of concern but stated that there was no doubt that the law had had a negative effect
on the pub industry. Mr. Cribben also mentioned the same 11% decrease in pub
sales and is currently pushing for the allocation of smoking rooms within Irish pubs
along with reviewing other potential alternatives for smoking-prevalent customers.
2.6.3 SolutionsThe smoking ban had quite a detrimental effect on the pub industry and did cause a
sharp decline of smoking customers frequenting pubs. However, with this come a
variety of solutions that can be derived to hinder the effect of the smoking ban.
Smoking Rooms
Smoking rooms are a popular solution for many establishments throughout the world
to provide cigarette smokers a place where they can smoke without disturbing non-
smoking customers. Widely popular throughout Europe and America where there are
certain restrictions on cigarette smoking, this would be a quick and easy solution for
Irish pubs to accommodate smokers. Pubs can then expand on these rooms in very
simplistic manners to improve the service for the customers who do smoke. For
example, placing stylish zippo lighters around the room will entice smokers to use
this room and allow for pubs to stand out from each other. Along with the placement
of stylish zippo lighters, little trivia information cards about Ireland and/or the pub can
be placed around the room for the customers. Finally, designing these rooms in a
creative manner will also add on to the overall effect of the room and make smokers
feel less segregated. As shown in Figure 3, Dubai Airport has a very stylish smoking
lounge, which creates an effect and gives visitors something to remember.
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Electronic Cigarettes
Electronic cigarettes are slowly gaining in popularity in Ireland due to the lower health
risks posed to second hand smokers (Hanley 2013). Electronic cigarettes produce a
lot less vapour and have more organic based products within them compared to
normal cigarettes. Electronic cigarettes can also release vapour with more pleasant
aromas and thus cause less discomfort to non-smokers (Hanley 2013). Thus, in
accordance with this, Irish pubs should start pushing for the use of electronic
cigarettes to be allowed within pub establishments. This will allow for smokers to
smoke without feeling segregated and also allows for non-smokers to feel
comfortable and not work about the health risks from second-hand smoke. Also, this
allows for potential market expansion, pubs can link up with electronic cigarette
companies and use this as a potential avenue for further profit expansion. This will
also allow for pubs to broadcast their own name throughout and can use these
potential partnerships as an outlet for a creative marketing campaign, which can
result in revival in the pub industry.
Arjun O’Sullivan Measures and solutions undertaken to
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Figure 6: Dubai Smoking Lounge, source
http://www.moodiereport.com/document.php?doc_id=30471
25
Figure 7: Electronic Cigarette source, http://www.rokuniversal.co.uk/news.php?
newsid=13
Anti-Smoking Campaigns
Anti-smoking campaigns are very popular and are a great potential to market a
name. If pubs were to join hands and campaign against smoking, this could bring a
positive image to the pub culture and therefore lead to a progressive business
potential. Also, this anti-smoking campaign might encourage smokers to stop
smoking and return to pubs that they stopped visiting because of the public smoking
band. An anti-smoking campaign will also bring a real positive image to pubs and will
be a surprise stance that could potentially benefit the pub industry and allow for a
positive change in pub culture, as it will not be attributed with the image of the
promotion of cigarette smoking.
2.7 Retail Outlets
Irish retail outlets or supermarkets have always been the direct competition to Irish
pubs since their implementation in the early 1960s. The introduction of the
supermarket in Ireland eliminated the grocer side of an Irish pub and in present day,
retail outlets threaten to drive the Irish pub to complete extinction.
2.7.1 OverviewThe first official large Irish supermarket to open was Dunnes stores, which opened its
first venue in 1956. From then on, Dunnes stores have grown to be a massive
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organization with hundreds of stores spread across the Ireland. From then on,
various domestic and international companies have opened up in Ireland and
expanded on the success seen within Ireland (Forfas 2010). Ireland has a total of six
different major supermarket chains that are currently active within Ireland; Aldi, Lidl, Dunnes Stores, SuperQuinn, Supervalue, and Tesco. According to RTE (2013),
the Irish retail industry continues to grow by 1% at least every year with major
expansion plans in current progress as these big retail companies continue to
takeover and dominate the market. The Irish supermarket industry brings in an
approximate € 9 billion to the Irish economy at the present moment and is an
extremely profitable and important industry (IrishTimes 2013).
2.7.2 Threat to Pub IndustryLooking at the pub industry and comparing it with the Irish retail industry can be quite
confusing as both are very different and both provide services but in different
mannerisms. However, the Irish retail industry and Irish pub industry have now
become direct competition with each other due to one main factor; the abolishment of
the Groceries Order (Gibbons 2006). The Groceries Order was implemented in 1987
and its main aim was to regulate grocery prices by banning big retail chains from
selling goods below the cost of purchase. Yet, in 2006, the order was outlawed by
the Competition Act which gave the freedom to retail outlets when pricing goods. This
allowed for the big retail outlets to then offer goods at a large discount and this has
lead to these retail outlets to slowly start to gain control of the market (Gibbons
2006). This has affected the pub industry because these retail outlets started offering
alcohol at considerably low prices compared to most pubs, as most pubs are too
small to have the same sort of business luxury as these massive retail organizations.
The average price of a pint in Ireland is about € 6 or CHF 7.20 which can hold
approximately 600 ml of beer. Nonetheless, a pack of beer containing 20 bottles or
cans of 300 ml will cost a consumer € 20 or CHF 25 which is much more worth it for
a customer as 4 pints in an Irish pub will already exceed the amount spent on a 20
pack of beer in a retail outlet. This may seem normal, however due to this factor,
much of the Irish population have stopped visiting the pub for a relaxing drink and
instead choose to socialize with friends within their own households because of how
much money can be saved.
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2.7.3 SolutionsCountering the negative impact of retail outlets is extremely challenging because as
described before, Irish pubs have no way of being able to have the care-free ability to
adjust their prices.
Emphasis on Service and Atmosphere
A difference between the Irish pub and a retail supermarket is the atmosphere and
service that one can receive in an Irish pub and this should be start to emphasized
on by pubs when marketing their products. Pubs should start reminding customers of
the atmosphere and service that can be found within a pub and how this creates a
better experience for the customer. If Irish pubs can start focusing on marketing the
atmosphere of the establishment, it will give the customers something to think about
and also make them forget the fact that they can obtain alcohol for a much lower
price. Focusing on keeping the customer thinking that they are paying mainly for a
friendly and comfortable atmosphere will unconsciously stop the customer from
worrying about the price of alcohol and how much will be spent specifically on the
drink, but however the customer will start to view the pub as a place that provides a
great atmosphere and comfort for the customer at the same time. I have created a
template to assist in showing how this technique will be used or what exactly could
be done to market the atmosphere of a pub;
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Figure 8: Example of how pubs could market, source
http://fineartamerica.com/featured/crowds-of-people-outside-the-duke-of-york-pub-at-
night-in-belfast-city-centre-northern-ireland-joe-fox.html
This is a simple example of how pubs can market their atmosphere towards their
customer base, as it can be seen here, this template hints mischievously at the retail
supermarket while also showing what people are missing by not attending a pub
establishment. In a general marketing sense, this example also has a humorous
notion to it, which will only further assist in encouraging people to spend more times
at pubs.
Partnerships & Expansion
Within the hospitality industry and many other industries, the concept of partnerships
and expansion has become more popular as it can produce some very profitable
results. Business partnerships have a lot of benefits to them such as; reduction of
costs, greater competitive advantage and creates better revenue opportunities (Hull
2013). Business partnerships also bring a more collaborative approach to in the
process of achieving goals, as it is always better to have more than one opinion (Hull
2013). This proves that business partnerships do reap benefits and if done correctly
can produce very effective results. Apply this to the pub industry and the potential for
some very profitable business partnerships can be realized. According to Hampson Arjun O’Sullivan Measures and solutions undertaken to
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(2012) there are approximately 8300 located in Ireland, which shows how easy it
would be for pubs to partner up and start working together. If pubs were to start
partnering up, it could lead to a huge change in the pub industry and possibly remove
it from its downfall. As already mentioned before, events are highly important in the
hospitality industry and can really make a difference and combine this factor with two
pubs in partnership it could result in bigger events being thrown and more revenue
being gained. Business partnerships could also help share the weight of marketing
and outreach; pubs could create bigger and better marketing campaigns that will
have a broader outreach and possibly match the marketing capabilities of the
enormous chain supermarkets. Finally, business partnerships within pubs can result
in the combination of establishments, which means pubs, can provide better live
entertainment and also better manage the concept of a higher quality of food items.
Hence, business partnerships can provide Irish pubs with reinforcement when as the
more pubs working together means a strengthened counter-competitive effort against
the large retail supermarkets.
Along with business partnerships, the similar concept of horizontal integration can
also be useful in providing competition against retail outlets. Horizontal integration,
according to Jurevicius (2012) is defined as; “the process of acquiring or merging
with competitors, leading to industry consolidation.” Horizontal integration is mainly
used as a measure for organizations to bolster their position within a certain industry
(Vassoughi 2012). There are many advantages to horizontal integration that include;
lower costs, reduced competitions, increased diversity, increased market share and
access to new distribution channels (Vassoughi 2012). These advantages of
horizontal integration clearly show just how effective horizontal integration can be
and will be extremely beneficial for the pub industry. If pubs were to adopt horizontal
integration it could lead to the start of some fresh growth for the pub industry and
possible revitalization. Horizontal integration will allow pubs to start having a better
and bigger name but also provide for more strength when competing against the
retail outlets that continue to grow and expand. The concept of horizontal integration
will allow pubs to realize some prospective growth against the likes of the large retail
outlets. Horizontal integration will bring opportunities for pubs to establish chains of
pubs, allow for smaller to pubs to flower under the guidance of bigger and more
successful pubs and cut costs. significantly. With horizontal integration, the pub
industry could mimic the same strategy the retail supermarkets are using to gain
competitive edge. Since costs will be shared, pubs can start reducing prices and thus
reduce incentive for customers to purchase alcohol from retail outlets. Likewise, pubs Arjun O’Sullivan Measures and solutions undertaken to
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could start to adopt chain-like concepts when trying to become more profitable. A
chain of pubs can open up many opportunities such as setting a standard of service,
establishing a strong a knit of establishments working together and it will also assist
in customers remembering pubs as the name will be shared making it significantly
easier for customers to remember the establishments. Ultimately, the concept of
horizontal integration will make link more pubs together within the industry and allow
for less individual competitive action against the retail supermarkets but a more
collective one that will be much more dominant.
3. SWOT Analysis
3.1 Usage and ImportanceA SWOT analysis according to CompleteBusinessStartup (n.d) is a tool that
evaluates an organizations overall strengths, weaknesses, opportunities and threats.
Figure 9: Template of SWOT Analysis, source
http://leadershipchamps.wordpress.com/2008/04/09/swot-analysis/
The strengths and weaknesses of the SWOT analysis are based on internal factors
whereas the opportunities and threats of the SWOT analysis are based on external
factors that can influence the organization (completebusinessstartup n.d). SWOT
analyses are very important in establishing targets and objectives but also very
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effective in realizing an establishment’s strength and what can be developed on and
what possible factors are weaknesses for an organization (completebusinessstartup
n.d).
3.2 SWOT Analysis of Pub IndustryA SWOT analysis of the pub industry will allow for a breakdown of exactly how pubs
are faring, as this will show a better overview of the other smaller factors that play a
role in the pub industry in addition to the main issues and factors shown previously.
3.2.1 Strengths
Tradition: A major strength is the strong traditional roots that pubs have
stemmed from as pubs started out as the center of the community and were
the center of social interaction for small rural Irish communities. This strong
root in tradition means that pubs can work off this, as it is a strong point for
pubs to work from, as Ireland is a country that still holds strong roots on
certain traditional values especially with social culture and drinking. Last year,
Ireland had the second-highest consumption of alcohol with the average adult
consuming up to 12 liters of alcohol as found by Reilly (2013), revealing how
popular the drinking culture still is. This means that through the strong sense
of tradition that is apparent in Ireland, pubs can use their own traditional
values to appeal to these similar traditional strengths within Irish culture.
Global Influence: As mentioned before, the Irish pub industry has a massive
influence globally due to many reasons. Firstly, the aspect of community
social interaction within Irish culture has proved to be a large success on a
global level especially in North America as the profit margin regarding Irish
pub concepts are said to be much higher in comparison with other food and
beverage outlets (Long 2011). This is a valuable strength as it can lead to a
number of future developments such as partnerships, foreign investments
and a strong global input. This global influence will also be very important in
keeping Irish pub culture alive because if Irish pubs do become obsolete
within Ireland, there will be still a strong global network of Irish pubs that will
keep the tradition and culture alive.
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Basic Human Interaction: The Irish pub also stands apart from other
establishment because of its unique atmosphere production and how it
provides a center for people to come together. The modern world replies on
technology heavily, and the Irish pub is an establishment, which encourages
the human aspect of communication. Irish pubs are also establishments
which breakthrough the barrier between customer and employee and most
Irish pubs function like a household, which is providing for its guests. This,
again, enforces the human aspect of communication and interaction and
more importantly goes along with a popular trend of having very personal
relationships between establishments and customers.
3.2.3 Weaknesses:
Business Complacency: Irish pubs promote and surround their concept
around strong social and communal values and this is due to the fact that this
concept has maintained its presence throughout generations of Irish pubs.
However, despite having being extremely advantageous to Irish pubs it has
also led to pubs being complacent with business strategies and expansion.
Pubs have failed to adapt to the growing trends within the Irish population and
this has led to them falling behind other forms of hospitality industries. The
traditional values found within Irish pubs have failed to extend themselves to
certain sections of the Irish population, which has created universal business
complacency amongst Irish pubs. Also, the fact that many Irish pubs are
located in rural communities which makes it harder to reach out to new
customer markets, thus location has been a big factor in leading to business
complacency. The concept of business complacency has also come out of
many pubs being kept in the family, as the next generations just adopt the
same business concept as not to break family tradition or values.
High Staff Turnover: Another common weakness that the Irish pub industry
faces is the high staff turnover of the common Irish pub. Most people do not
look to the Irish pub as a permanent place for work and thus most pubs do
not have permanent staff apart from anyone closely related to the owner.
According to Foley (2008) almost 41% of staff employees are part-time and
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would not consider a future within an Irish pub. This is extremely
disadvantageous as maintaining the success of a business and maintaining
profitable customer relationships means keeping staff turnover low and not
allowing for staff to continuously be changing throughout, especially within the
hospitality industry, which relies which on a very strong service culture
(Kotler, Brown and Makens, 2010, ppg. 270-271). The reason for this high
staff turnover can be attributed to a number of factors and one of these
factors is the low pay that staff receive when working for a pub establishment.
Many pubs pay a considerably low amount to their employees which results in
many to not consider the pub as a place for decent employment (Foley 2008).
Pubs also can’t offer the same benefits that bigger hospitality establishments
can offer thus it is very hard to attract workers for employment (Foley 2008).
This is mainly due to the high costs that pubs have which results in pubs
having no choice but to offer considerably low wages and lesser benefits.
Thus, due to this, the likes of college students and other individuals who are
not looking for a permanent job are attracted to working in pubs, which is then
a direct cause of the high staff turnover.
Differentiation: As stated before, within the Irish pub industry there are an
approximate 8300 pubs located all over Ireland (Hampson 2012). This is a
very large number considering how small Ireland is and led me to believe that
there is an issue regarding differentiation. Basically, there are too many Irish
pubs within Ireland resulting in many pubs to be devoid of customers and
business. This is because once people become familiar with a pub, they will
make it their local hangout and will most likely not familiarize themselves with
another establishment. Thus, once the handful of pubs that are popular will
reap many benefits, which results in other pubs to struggle to provide to that
same market. Moreover, when the majority of pubs do struggle to establish
business, it pulls down the overall value of the pub industry because of the
high number struggling to find new customers to attend to. Also, as
mentioned previously, the natural interest in pubs is dissipating and this
compounded with the high number of Irish pubs makes it almost impossible
for pubs to find both a set base and maintain a comfortable stream of
customers.
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3.2.4 Opportunities
New Market Realities: An opportunity with Irish pubs is the availability of new
markets at their disposal. For example, as shown before, the strongest
market within Ireland age between 25-54 and Irish pubs have a perfect
opportunity to cater to this specific market. In order to this, strategies have to
be implemented and in order to create thorough and foolproof strategies;
extensive research must be conducted of the different elements that make up
the specific market (Kotler, Brown and Makens 2010, ppg. 197-206). Once
the target market has fully been understood, the process of developing the
market strategy can be established. In order to appeal to this market pubs
can use a variety of techniques that will satisfy consumer needs, for example,
creating happy hour sessions during peak times when the specific target
market could potentially bring in a lot more customers. Creating events
through social media and promoting pub events in areas where there are
known to be high numbers of customers, within the specific target market will
allow for pubs to directly market to their customers. Also, when conducting
this, pubs could potentially gather information from customers and also
engage potential customers, which will only assist in attracting more people to
pubs. Finally, with this, pubs can also appeal to this market becoming more
active on social media networks by promoting specific aspects, interacting
with customers and creating various contests to engage customers.
Branding: Branding is an extremely valuable tool and is used as a tool to
attribute certain products to certain organizations (Tepeci 1999). Brands bring
a great many positives such as stability to business, protect from imitation
and allow for customers to easily identify products (Tepeci 1999). Within the
hospitality industry, the concept of brand loyalty is growing and many major
players within the hospitality industry use brand loyalty as a tool to reach out
and establish concrete relationships with customers (Tepeci 1999). The
importance of branding can’t be stated enough as branding can reduce costs;
specifically marketing costs as with more concrete customers comes loyalty
which means the less need for marketing (Tepeci 1999). More loyal
customers also leads to a more continuous stream of profit as these it is
almost given that these customers will spend money. Finally, the longer a
customer stays loyal means the more that customer will spend over time as
their start to trust the establishment more (Tepeci 1999). Apply this to pubs Arjun O’Sullivan Measures and solutions undertaken to
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and it lead to a real boost in the economy of the pub industry. For example, a
specific pub could provide certain aspects that will separate it from the next
pub such as a fine dining service. Combining the pub aspect with the concept
of fine dining would really set a pub against its competition and thus allow for
it to be known as the pub with image of having a perfect blend of fine dining
service combined with the traditional atmosphere of the Irish pub. In addition
to this, pubs can create a system of reward points to make customers come
back more often to their establishments. For example, creating a system
where the more spent within a pub can earn a customer points and with these
points customers can earn rewards or purchase certain goods with these
specific points. Branding also allows customers to differentiate between the
many different pubs in Ireland and allow customers to easily choose the right
pub that would suit their needs.
Global Partnerships: Setting up a global partnership or developing an
international link can have a lot of advantages (Delaney 2013). These many
advantages which include; broadening contact base, enhancing image within
the international marketplace and potentially enlarging distribution channels
(Delaney 2013). As stated before, the Irish pub has had a huge influence on
the global hospitality industry. This success on a global level can allow for
Irish pubs within Ireland to form partnerships with other Irish themed pubs
located around the world. The potential partnerships could allow for pubs to
establish global links, which could procure many benefits. For example, if an
Irish pub was to partner with an Irish pub located in America, both could
market for each other and thus share the weight of marketing costs. Also,
these global links and networking conducted by Irish pubs will make
consumers feel that the Irish pub industry is continuously growing and
expanding which will help attract these consumers. In addition to this,
partnerships on a global level could bring comfort for Irish people travelling as
if there was an Irish pub located abroad which was recommended by a local
pub in Ireland, the respective person travelling would most likely consider
visiting the establishment or at least know it can be trusted as it was
recommended by their local pub in Ireland. Furthermore, having a global
network means that the industry will be more respected and the image of the
industry will be enhanced, as consumers will want to be frequenting
establishments that have strong global outreach. Besides the benefits for
customers, establishing a strong network means gaining access to new Arjun O’Sullivan Measures and solutions undertaken to
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contacts, cheaper suppliers and also allows for potentials in global expansion
for Irish pubs.
3.2.5 Threats Emigration: Emigration is a concept that can be both beneficial and at the
same time have its disadvantages. For the sending country, it can mean
economic downturn as more people leave meaning that the amount of people
that could contribute to the economics of the sending country will be lower
(Drinkwater, et al. 2002). Ireland is a country that has faced a large numbers
of emigrations with approximately 1000 people emigrating from Ireland per
week in the year of 2012 (Fátharta 2012). Since 2008, a little more than
200,000 Irish citizens have left Ireland to other countries and this figure has
been predicted to increase in the next three years (Kenny 2013). Furthermore
Kenny (2013) found that least 40,000 of emigrants have been between the
ages of 24 and 44, which falls right into the demographics of the pub
industries target market.
Figure 10: Chart depicting migration within Ireland, source
http://usatoday30.usatoday.com/news/world/story/2012-09-23/ireland-economy/
57832862/1
As shown in figure 7, within the years of 2008 till 2011 there have been a high
number of people emigrating from Ireland. Emigration threatens the Irish pub industry Arjun O’Sullivan Measures and solutions undertaken to
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because with already dwindling customer attendance it means that there will be less
people within the target market and other markets that could potentially be
addressed, as there could be a possibility that numbers of the population within these
markets could be very low. Emigration can also result in a phenomenon known as
“brain drain” where in which there are not enough skilled white-collar workers around
to fulfill economic needs (Drinkwater, et al. 2002). This can have an impact on the
pub industry, as within the emigrations numbers could be hospitality professionals
that could possibly improve the economic state of the pub industry, however, if the
number continues to increase, the pub industry could see a further slump within the
next year.
Recession and Weakening Economy: The global recession hit most of the
world in 2008 and had a detrimental effect on most industries. In particular,
the hospitality industry was hit quite badly, with the North American and
European hospitality industry feeling the worst of the recession (Rothery
2012). Within the Ireland and the United Kingdom area, (Rothery 2012). found
that there was a steady decrease seen in the number of hospitality outlets.
Nonetheless before the year of 2008, the Irish economy flourished from 1997
till 2007 and this period of success was labeled the “Celtic Tiger.” Many
aspects of the Irish economy saw strong growth with the average Irish family
having access to very large disposal incomes, which led to a growth in
consumer expenditure (CSO 2005). Ireland also saw a rise in the amount of
immigrants with 10% of the Irish population in 2007 having foreign descent
(CSO 2005). This means that there pubs were benefiting from both the
access to cheap labor combined with strong consumer expenditure made the
pub industry a profitable one. Nonetheless, Ireland was the first country in
Europe to be hit by the global recession in 2008 as the finance and property
sector of Ireland collapsed which led to widespread unemployment, which
resulted in a decrease in consumer expenditure (Rothery 2012). The
unemployment rate in Ireland doubled between the years of 2008 (6.5%) and
2012 (14.8%) and there looks to be no sign of any major decrease in these
figures (CSO 2013). Consumer expenditure dropped as well with a decrease
of 2.4% between 2011-2012 and a further 3% decrease was also seen in the
first quarter of 2013 (Kelpie 2013). The pub industry was also terribly affected
by the recession with a 10% decrease seen in Irish pubs since the start of the
recession and have there has been at least 1 pub closing everyday since
2008 (Lambkin 2010). According to estimated forecasts and predictions, Arjun O’Sullivan Measures and solutions undertaken to
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Ireland has been predicted to continue to stay in recession for at least the
remainder of 2013 and into the beginning of 2014 (Ryan 2013). Unfortunately,
it is quite hard for pubs to battle against the recession, as the Irish economy is
concentrated heavily around the financial and property. Unless there is
improvement or growth within these sectors, consumer expenditure will
remain at a relatively low level, which will continue to deter plans and
strategies for improvement. The only solution to the recession for Irish pubs is
to ride the economic wave and also continue to work towards finding avenues
that could offer potential routes to higher profit margins.
4. ConclusionThe Irish pub industry faces a long multitude of challenges that it needs to conquer
before it can pick itself out of the crisis it is facing. In order to clear these hurdles and
create a better prospect for the future Irish pubs need to tackle and identify the main
issues bringing down the industry which is to improve product catering to customers
(knowing what customers want), the smoking ban and competing with the retail
powerhouses. After identifying the issues, pubs need to incorporate a variety of
techniques to tackle these main issues.
As highlighted, I would recommend the use of better trend management and market
segmentation in order for pubs to understand their target market and this
understanding must continuously developed due to the ever changing trends that lie
within the pub industries target market. Also, regarding the smoking ban, which is a
concern that can’t be attributed to the pub industry, however through the
implementation of different solutions such as; smoking rooms, electronic cigarettes
and anti-smoking campaigns could counter the damage done by the smoking ban.
Gaining competitive edge against the super grocery outlets is also a factor that was
not brought about by the pub industry however, just like the smoking ban, a variety of
techniques can be used to counter the strength of the super retail outlets. The use of
partnerships among pubs will allow for pubs to formulate together and become a
greater force when trying countering against the retail outlets. Also, besides
partnerships, the concept of horizontal integration will also provide for more profitable
results as just like partnerships, it will bring pubs together and allow for the pub
industry to pose a more competitive edge against the super retail companies. In
Arjun O’Sullivan Measures and solutions undertaken to
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addition to partnerships and horizontal integration, Irish pubs have an advantage
over these prime supermarkets as incorporated within the product of an Irish pub is
the atmosphere and service provided and thus should start focusing their marketing
and promotion on the service and atmosphere provided within an establishment, and
not necessarily try to compete directly against the large retail outlets.
Besides identifying the main factors going against the pub industry, a SWOT analysis
should be considered by the pub industry to define exactly what the pub industry is
about and how it can improve itself. Firstly, by identifying their strengths in tradition,
global influence and basic human interaction allows for pub establishments to know
where they stand within the market and their competitive advantage. Once the
strengths of the pub industry have been measured, the weaknesses of the pub
industry must be measured, of course, most pubs will differ from each other, but
understanding the weaknesses of the pub industry will allow for what aspects can be
developed on or corrected within the pub industry. The opportunities for pubs provide
for expansion and with the concepts of branding and exploring new market realities,
there should be a positive increase for the revenue side of the pub industry. Finally,
the threats posed to the pub industry can’t really be controlled nor improved on from
the pub industry point of view and thus all that can be done is to hope that the
general economy of Ireland starts to pick up again.
Irish pubs have such strong traditional roots within Ireland and have been such an
essential part of Irish history. However, the views on traditions are changing thus
Irish pubs need to do the same, by incorporating the different methods and
strategies, the Irish pub industry can slowly bring about the same business and
community strength they had once felt decades ago.
Appendices
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Appendix 1
1. Mr. Cribben, do you believe that the smoking ban had a detrimental effect on
the pub industry?
2. Was the smoking ban the sole cause of the downfall of the pub industry or is
it part of a system of concerns?
3. Any statistics you can point out that will assist in painting a picture of just how
bad of an affect the smoking ban had?
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I, Arjun O’Sullivan, herewith confirm that this diploma paper is the result of my
personal independent work and research, that it was completed without any
unauthorized outside assistance, and that all sources have been listed and accurately
quoted.
Arjun O’Sullivan Measures and solutions undertaken to
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46
Arjun O’Sullivan
The Diploma Paper of Arjun O’Sullivan is hereby approved.
For the Examination Board
September 2013
Swiss School of Tourism and Hospitality
Chur, Switzerland
Arjun O’Sullivan Measures and solutions undertaken to
solve these issues