Developing A Sustainable Business Model For A Football Pub

Customer Segmentation

The modern day business environment is changing in a significant manner and as the traditional business opportunities are facing significant amount of competition, the business houses are considering innovative business opportunities. In recent years it is observed that the business organizations are trying to attempt the leisure of the general people. The modern people specifically the sport lovers are observed to be affected by the stadium like environment in a significant manner (Dixon 2014). However it is seen that the busy lifestyle of the people of the modern society is barring them from their desired experience. There exists the reason behind the notable rise in attendance in the pubs. The pub is a sort of environment where those deprived sports lover can get the opportunity to experience a stadium like environment (Wittkowski and Betz 2016). It is like a public house where people gather to enjoy the match with many other sports lovers like them along with some nice refreshments in the form of alcoholic drinks and snacks (Gornall 2014). The introduction of the pubs are significant in reducing the stress and work dissatisfaction of the modern people and with the significant amount of up rise in attendance in the pubs, it is turning out to be a highly opportunistic business model for many renowned business organizations and entrepreneurs. The paper is focused in evaluating a business concept of football pub.

Srilanka is one of the few Asian countries where football is watched and loved by millions. Though Srilanka as a country is not at a fine position in the national team rankings published by the governing body FIFA, yet the enthusiasm is not going down at all. On the other hand, the bar and restaurant concept was getting significantly preferred by the people of the mentioned country. People of Srilanka were significantly liking the concept of the pubs and along with the atmosphere and the type of refreshments that they were having in the form of the beers and other alcoholic drinks (Turner 2013). As it is clear that the generation revenue in the football pubs will be based on the consumption of the alcohol or the food products that the organization offers to the customers, the statistics of the alcoholic drink consumption or the food products become significant. The statistics of the per capita alcohol consumption in the nation is a major proof of the probable success of the football pubs as it is able to observe a rise from 2.2 litres of 2005 to 3.7 litres of 2010 and in the year 2015, it recorded 4.5 litres (statista.com 2018). Hence the choice of the products are viable for the success of the pubs.  

The customers will be the general football lovers, member of various football fan clubs. There will not be any age boundary for the customers, yet it is observed that the customers generally belongs to the age of 18 to 55 years (Williams 2013). The gender preferences regarding the customers will not have a massive importance as it is seen that the country is gaining more number of female football supporters. The customers having a salary of at least 35 thousand Srilankan rupee will be the aim of the pubs.

Target Customer Profile Segmentation

The customers of the pubs are needed to be passionate for the sport or any football club which will attract them to the pubs in a significant manner. Along with the interest on football, the customers who like to enjoy the social gatherings will be preferable for the pub authority.

The footballing events like the world cup, Euro cup, Asian Championship or the SAFF Cup will be significant for the pub authority to attract the occasional customers (Brown 2013). The list also includes the local and national club games and the tournaments like the UEFA Champions League, UEFA Europa League. The organization is in need to introduce effective loyalty and rewarding policies along with notable discount offers in order to attract the occasional customers in a significant manner.

The emotion and the connection of the customers towards the sports and their loved clubs are the main influential factor in the increment of the sales of the products of the pubs. Other than that, the pubs will be able to attract the customers, specifically the youth, with the online gaming opportunities (Fuster et al. 2014). Along with that, the pubs will have the chance to capture the attention of the customers with the increment in the food and beverage products. The increment in the product chain of beers and other drinks along with pizzas will be significant. Along with that the usual operations like the frequent dance nights will be unique for the organization. The atmosphere of the pubs will also be significant as the customers who are unable to attend the matches in the stadium, like to be in the pubs in order to get the same experience. Hence the pub authorities are in need to make sure that they be able to provide almost a same surrounding.

The distribution channels will be the football fan clubs of Srilanka. Along with that, the professional clubs of Srilanka will also be a notable channel for the pubs as the pubs will be the perfect choice for the screening of the away games. Other than these channels, the pubs will have the chance to distribute their business by the Television or newspaper promotion. The people of Srilanka are observed to inherit the skills and competencies of using the social media in a significant manner and this will be crucial for the pubs in distributing their business through the various social media platforms like Facebook, Twitter or YouTube (Van Dijck and Poell 2013).

The pubs need to manage their business in such a manner that it be able to attract the customers. The best way in doing so is by following the customer trends and customer preferences. The pubs are in need to monitor the consumption of the customers and specifically the type of the food and beverage products that are consumed in large amount by the customers. It will enable the pub authorities to align their products in accordance to the preferences of the customers and will also be helpful in manufacturing those products with the same specifications.

Value Proposition

Apart from this the pub authorities are in need to make sure that they be able to attract the Srilankan people by forming effective and lucrative offers for their customers (Shrivastava and Verma 2014). The authorities must introduce loyalty discounts to the regular customers and this will be benefitting for both the customers and the pub authorities. As the member of fan clubs and the supporters of the professional clubs will face the need to go to the pubs in a repetitive manner to watch the matches, the loyalty discounts will be significantly attractive for them. On the other hand the pub authorities will be able to ensure the repetitive purchases of the customers which will be instrumental in earning a significant amount of profit for the organization. The sale of the merchandises like the jersey, caps or scurf for the customers will also be notable from the part of the pubs authorities as that will enable the organization to take care of the individual preferences of their customers.

The revenue streams for the pubs will be the subscription or entry fees for the entry into the pubs. This will be a fixed price for the customers. Along with the subscription fees, the pubs will have the chance to generate revenue on the drinks that they offer to their customers along with the food products available in the pubs. Apart from that the online gaming zone will also be a major source of revenue for the organization. The sales of the football club merchandises will also earn a considerable amount of money for the pubs.

Products	Prices (In Srilankan Rupees)
Fried Camembert Cheese with Stewed apples, chutney and berry compote	690
Crumb Fried Prawns	1060
Butcher’s Plate of Assorted Cold Meats, Olives, gherkins and Sauerkraut	905
Chunky Beef Goulash	520
Cream of Chicken and Noodle	410
Flame Grilled Chicken Steak with Pepper sauce, Vegetables, Salad and potatoes	1380
Grilled Chicken Served with BBQ Sauce Fries and Coleslaw	1300
Creamy Mixed Vegetable Packages with Cheese and Salad	800
New Zealand Red Wine (Spy Valley Syrah)	7350
New Zealand White Wine (Spy Valley Sauvignon Blanc)	6850
Red or White Wine	475
Carlsberg (Small)	520
Cinderella	465
Carlsberg (Large)	575

The area or the location for the pubs must be selected at the centre of the city with considerable mount if crowd gathering. This will be significant for the organization to attract crowd easily.

The intellectual resources for the organization is the infrastructural development. The pubs authorities are in need to set up screens for the matches along with that the dance floor. The gaming zone must include upgraded versions of software and gaming infrastructures. The organization needs to set up the technologically advanced kitchen along with better cooling facility for the beverages.

The organization is in need to recruit considerable number of employees with experience in the same sector for at least 3 years to manage and serve the customers with the desired level of perfection. The customer satisfaction is a significantly important part in the mentioned business sector, hence the organizations or the pub authorities need to decide wisely on the recruitment of the employees after evaluating the competencies and the skills of the employees in the mentioned sector (Gannon, Roper and Doherty 2015). The employee rating by the customers is also a significant medium of assessing the performances of the customers which the organizations need to consider.

The building of the infrastructure along with the continuous development is much needed for the pub authorities. The organization must gather sufficient amount of funding for the purchasing of the equipment like the screen, the air conditioners, gaming equipment, the beverage product containers along with the cooling arrangement for the beverage products (Powell, Harris and Fox 2013). The organization is in need to incorporate upgraded technology in their kitchen for fast and effective production of the food products.

Distribution Channels

Being a football pubs, the organization is responsible for producing the food products like the salad, soup, fries and pizzas. Along with that, the organization is significantly focused towards the beverage business with the introduction of beers and alcoholic drinks.

The organizations need to make sure that the Srilankan people be aware of their activity. The absence of the brand awareness is a concern for pubs and in order to eliminate such concern, the organizations are in need to promote their activity. The organization needs to create football related advertisements for Television and along with that the social media promotion is also vital in capturing the attention of the youth generation. Apart from this, the organizations need to use the newspaper advertisements in order to attract the customers. The organizations are in need to collaborate with the fan clubs in order to catch the limelight in the market and fan base.

The organizations need to tie up with investors in an effective manner where the investors or the investment banks will be able to understand the policy of the organization. The authorities of the pubs need to make sure that they be able to convince the investment banks with the portrayal of the path that will be earning them improved return on their investments.

The organizations will focus on the supporters’ forum along with the fan clubs as the distribution channels. Apart from that, the pubs can tie up with event management organizations as well.

As the organization produces food and beverage products, the organizations are in need to be significantly focused with the supply and logistics. The organizations need to form effective supplier’s code which will strictly monitor the operation and business conduction of their suppliers. It is observed in past that the organizations’ sales gets highly affected due to the unethical conduct of the suppliers. Hence the formation of the suppliers’ code will enable to the pubs to avoid such issues. Along with that, with the formation of the suppliers’ code, the organization will be able to avoid the issues like interrupted supply of the raw materials, inappropriate price hike in the raw materials (Grimm, Hofstetter and Sarkis 2016).

Apart from that, the organizations need to form effective strategy for the funding of the infrastructure with the formation of the path which will earn increased amount of return on the investment of the banks.

Summary Statement
Sources of Capital
Owners’ and Other Investments	$         54,000
Bank Loans	12,000
Other Loans	–
Total Source of Funds	$         66,000

	Fixed Expenses
Fixed Expenses
Social media	$                   68,650
SEO	12,050
Mobile marketing	45,000
Google adwards	12,500
Opening Inventory	–
Advertising / Promo Expenses	7,250
Other Expenses	50,000
Total Fixed Expenses	$                 195,450

		Year 1	Year 2	Year 3
Operating activities
	Net income	$0	$0	$0
	Depreciation	$25,140	$25,643	$26,146
	Accounts receivable	$0	$0	$0
	Inventories	$0	$0	$0
	Accounts payable	$0	$0	$0
	Amortization	1,000,000	1,000,000	$1,000,000
	Other liabilities	65,000	65,000	$65,000
	Other operating cash flow items	150,000	150,000	$150,000
	Total operating activities	$1,240,140	$1,240,643	$1,241,146
Investing activities
	Capital expenditures	$0	$0	$0
	Acquisition of business	0	0	0
	Sale of fixed assets	($505,546)	($515,657)	($536,440)
	Other investing cash flow items	0	0	0
	Total investing activities	($505,546)	($515,657)	($536,440)
Financing activities
	Long-term debt/financing	($12,000)	$0	$0
	Preferred stock	500	500	500
	Total cash dividends paid	5,000	5,000	5,000
	Common stock	0	0	0
	Other financing cash flow items	0	0	0
	Total financing activities	($6,500)	$5,500	$5,500
Cumulative cash flow	$728,094	$730,486	$710,205
Beginning cash balance	$0	$728,094	$1,458,580
Ending cash balance	$728,094	$1,458,580	$2,168,785

		Year 1	Year 2	Year 3
Gross revenue		$1,905,750	$1,943,865	$2,021,620
Cost of goods sold		$138,206	$140,970	$146,609
Gross margin		$1,767,544	$1,802,895	$1,875,010
Other revenue [source]		$0	$0	$0
Interest income		$0	$0	$0
Total revenue		$1,767,544	$1,802,895	$1,875,010
Sales and marketing		$7,250	$7,395	$7,691
Payroll and payroll taxes		$50,000	$51,000	$53,040
Depreciation		$25,140	$25,643	$26,146
Maintenance, repair, and overhaul		$0	$0	$0
Total operating expenses		$82,390	$84,038	$86,876
		$1,685,154	$1,718,857	$1,788,134
Interest expense on long-term debt		$0	$0	$0
		$1,685,154	$1,718,857	$1,788,134
Loss (gain) on sale of assets		$0	$0	$0
Other unusual expenses (income)		$0	$0	$0
		$1,685,154	$1,718,857	$1,788,134
	30%	$505,546	$515,657	$536,440
		$1,179,608	$1,203,200	$1,251,694

Conclusion:

On a concluding note it can be said that the business model of the football pubs will be a significantly profitable business idea in Srilanka. The chance of enjoying a stadium like environment along with the appropriate refreshments are the influential factor in the increment of the customers. The Srilankan society has the all the resources needed for the success of such business model. The increasing interest of the people of the nation on sports specifically football will be a major reason behind the success of such a business plan.

References:

Dixon, K., 2014. The football fan and the pub: An enduring relationship. International Review for the Sociology of Sport, 49(3-4), pp.382-399.

Gornall, J., 2014. World Cup 2014: festival of football or alcohol?. BMJ: British Medical Journal (Online), 348.

Turner, M., 2013. Modern ‘live’football: moving from the panoptican gaze to the performative, virtual and carnivalesque. Sport in Society, 16(1), pp.85-93.

Williams, J.M., 2013. Fans: Consumers, hooligans and activists.

Brown, S. ed., 2013. Football fans around the world: From supporters to fanatics. Routledge.

Shrivastava, P. and Verma, D.S., 2014. Application of quality function deployment to improve customer satisfaction in hotel industry. International Journal of Scientific and Engineering Research, 5(6), pp.957-962.

Van Dijck, J. and Poell, T., 2013. Understanding social media logic.

Powell, L.M., Harris, J.L. and Fox, T., 2013. Food marketing expenditures aimed at youth: putting the numbers in context. American Journal of Preventive Medicine, 45(4), pp.453-461.

Grimm, J.H., Hofstetter, J.S. and Sarkis, J., 2016. Exploring sub-suppliers’ compliance with corporate sustainability standards. Journal of Cleaner Production, 112, pp.1971-1984.

Gannon, J.M., Roper, A. and Doherty, L., 2015. Strategic human resource management: Insights from the international hotel industry. International Journal of Hospitality Management, 47, pp.65-75.

Fuster, H., Chamarro, A., Carbonell, X. and Vallerand, R.J., 2014. Relationship between passion and motivation for gaming in players of massively multiplayer online role-playing games. Cyberpsychology, Behavior, and Social Networking, 17(5), pp.292-297.

statista.com (2018). Per capita alcohol consumption in Sri Lanka in 2005, 2. (2018). Sri Lanka: per capita alcohol consumption 2015 | Statistic. [online] Statista. Available at: https://www.statista.com/statistics/691374/sri-lanka-per-capita-alcohol-consumption/

Wittkowski, J. and Betz, G., 2016, September. Conference Report: Of Football-Themed Church Services and Techno Parties in Pubs:” The Hybridization of Staged Events. On Discussions About Events During Periods of Time”. In Forum Qualitative Sozialforschung/Forum: Qualitative Social Research (Vol. 17, No. 3).