"To create authentic expierences that ROCK!"
Concept of Product
The concept of the Hard Rock Cafe is an entertainment and leisure company for music lovers. Each cafe is covered with authentic rock 'n' roll memorabilia and a design unique to its location. The cafes serve casual American food at moderate prices and each cafe has its own merchandise store. Many cafes have a small music venue that host live bands.Although it is a corporate company, HRC has an irreverent free spirit attitude which is often imitated by competitors. The Hard Rock has been 'anti-established' since 1971.
In the early seventies, the world was experiencing free love, drugs and some of the greatest rock and roll of all time. HRC has been providing a rock 'n' roll atmosphere for 40 years.With 136 cafes, HRC's are in just about every major city around the world including 49 in the United States Gen Xers can enjoy memorabilia like a Janis Joplin concert outfit or a Jimi Hendrix guitar whenever they travel.
The reason for its success has been its ability to keep the Generation Xers intrested. Gen Xers desire the experience, not just the product. By following its own mission statement, "To spread the spirit of rock 'n' roll by creating experiences that rock," HRC understands who their target market is and how to keep them coming back.
SWOT ANALYSIS
Strengths: This year the Hard Rock will celebrate its 40th anniversary, which by itself is
a major accomplishment and strength for a company that started with two men in London. In those 40 years HRC has become a globally known brand name. HRC has grown from a partnership to a worldwide corporation with 148 cafes in 47 countries (and counting). HRC merchandise is the life blood of the company. HRC has a die-hard following of rock ‘n’ roll enthusiast that purchase rock ‘n’ roll themed souvenirs and collect pins from each café they visit. Sales from merchandise are responsible for the expansion efforts and global recognition of the brand.
Weakness: Slumping domestic market has caused cafes to close. HRC is too heavily invested in the American market. There are 54 cafes in the United States alone. In April 2008 Hard Rock Park theme park was opened in South Carolina. In September 2008 the theme park filed for bankruptcy and closed. This failed venture cost 400 million dollars and damaged the Hard Rock brand. HRC has also had to close several American cafes due to low sales while international cafes have continued to grow rapidly.
Opportunities: Rapid international growth and joint ventures are leading to high profits for HRC. In 2004 HRC began a joint venture with Sol Melia to open Spain’s first Hard Rock Hotel. Loew’s Hotels has joined with Hard Rock International to open three hotels in south east Asia. New York City, San Diego and Chicago also have joint venture hotels. Along with hotels, Hard Rock International has expanded into resorts and casinos. These are the cities HRC is scheduled to open:
Cafes Coming Soon
*NOTE: All are outside the U.S.
Threats: American recession and more affordable take out options are threats to HRC. With the American dollar not going as far as it did five years ago, the busy American consumer is looking for more affordable ways to buy prepared food. 48% of American’s food budget goes to prepared foods; this is great for the domestic restaurant industry including casual dining restaurants. HRC is in the casual dining range but at the higher end. Their prices are getting beaten by other casual dining spots that offer coupons, discounts, specials and happy hour marketed toward locals in search for a bargain. For example a family of four on a budget and in a hurry will choose Applebee’s over Hard Rock because Applebee’s runs a 2 for $20 promotion where guest get one appetizer and two entrees for $20. Grocery stores are offering more prepared items for consumers looking to bring home a meal rather than cook. There are more options in the take-out and delivery world than ever before. Families have more than pizza and Chinese food to choose from; growth in affordable Hispanic, Halal, vegan, Japanese (sushi) and Mexican take-out spots are sprouting up in cities HRC can be found in.
Marketing objectives
- Attract Gen Y consumers
Hard Rock International has added live concert venues to introduce a younger crowd to the Hard Rock brand.
- Maintain Gen X target market.
Gen X is still the market Hard Rock targets because of their ability to purchase and brand loyalty. Hard Rock International Has developed all inclusive resorts and casinos marketed to gen X and baby boomers.
- Grow All Access program.
The all Access program will promote repeat buying and brand loyalty, essentials for bigger profits.
- Push merchandise. Spend marketing dollars on introducing new retail items.
HRC is a specialty retail store that sells food. Sales of merchandise have a larger profit margin than food sales.
- Increase brand loyalty over seas.
Retailing Activities
Each Hard Rock Cafe has an on site store called The Rock Shop. These stores can be considered specialty stores because it has a narrow product line with a large depth. The Rock Shop sells tee shirts, outerware, hats, jewelery, keychains, glassware and pins. The merchandise found in the Rock Shops are specialized for the city its located in. This is another high selling point for each Rock Shop. A consumer can only find a Hard Rock hurricane glass from Tokyo in Japan. Because of the universal brand appeal, souvenirs with locations are highly sought after. The retailer can charge a higher price for location labeled merchandise because it can not be found anywhere else and the target market is willing to pay for it.
Online merchandise sales are more generic and require more sales and promotions to keep buyers interested. Online Rock Shop promotions focus on featured items that consumers are being introduced to. Holiday pins and limited time only pins are often introduced online before they are available in stores, some can only be purchased online. These items are not location specific so they can be marketed and sold the same way world wide.
Advertisement
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| GET CLOSER TO THE SHOW JOIN THE ALL ACCESS CLUB MEMBERS RECEIVE PRIORITY SEATING |
Hard Rock Holiday Valued Customer Promotion
The Hard Rock Cafe has two frequent buyer programs, the first is the All Access Card which uses a dollars for points method and The Pin Club Card which gives pin collectors 10% off every purchase. HRC sends weekly promotions to members of these frequent buyer programs. These weekly promotions target the brand loyal buyer. Some promotions offer the card holder 'sneek peaks' of new seasonal pins and merchandise that card holders can purchase before the general public.
To implement such a promotion, HRC must have a new product that they know their target market is interested in such as a holiday pin. Holiday pins are exclusive and valuable to pin collectors and Hard Rock enthusiasts because they are made in limited quantities and are sold for a limited time.
A mass email can be sent to both Pin Club and All Access card holders advertising the new holiday pins.
These are the components of an effecive promotion:
1. Card holders can preview and purchase new holiday pins two weeks before they are available in stores.
- This component controls timing of the puurchase.
2. Offering a 15% discount for online orders of $100 or more.
3. Free shipping on purchases of $150 or more.- 2 & 3 will increase per guest averages.
These components drive up sales because the consumer will want to spend more in order to recieve a discount and free shipping. By allowing card holders the power to purchase before the public adds value to the frequent buyer programs.
Integrated Marketing Communications
To introduce a new product to consumers companies may need more than one type of advertisement. Consumers are more likely to purchase a product after seeing it multiple times. They will associate that product with reliability and popularity when they see it often even if they never used it. To introduce Spa services at Hard Rock Hotels, the public will need to be convinced to buy through multiple advertisings.
1. Billboards
Billboards are located near highways and busy intersections. They are effective because thousands of commuters will see them at least five days a week twice a day as the commute to and from work.
Location: Chicago
Chicago has a Hard Rock hotel that locals may know about but they may not know about the hotels services. Commuters seeing an ad for the spa service will think about how much they need a break. They will more likely purchase because they won’t need to go far since the hotel is local.
The Billboard would say:
Need a break? The Spa at Hard Rock Hotel Chicago
*there would also be a photo of a woman getting a massage.
2. Online Add-Ons
Add –ons can be found online the same way they can be found in checkout lines. The cashier may ask a guest if they would like to purchase a featured product at a discount price. The checkouts at many websites do the same.
Location: hardrock.com
While a consumer is reserving a hotel room online they will be introduced to a the spa service provided by the hotel.
The add-on will read:
Book now and get 50% off of any service at the Hard Rock Spa
3. Brochure
Brochures are located near other forms of information, usually in the lobby of a hotel. They are used by local companies to inform tourist of local restaurants, shopping and services. Hotels may put their own brochures in the lobby to advertise services that are a part of the hotel but under a different name.
Location: hotel lobby
The brochure will provide information like:
Types of services: massages, facials, manicures Hours of service and Rates
4. Automated recordings
Automated recordings are one way hotels use inexpensive advertising. When a consumer calls a hotel to inquire about rates or availability they may be put on hold. Instead of hearing music they will hear a woman’s voice telling them about the new spa the hotel offers.
Location: receptionist
Example: “Have you heard of the Grecian Spa Experience at the Hard Rock Hotel? The new Spa located inside of the Hard Rock Hotel Chicago has what you need for an ultimate relaxing stay. You will receive discounts if you make a reservation today ask the receptionist for more details.”
*this also works if the guest dials 0 from their room. Instead of ringing they will hear this message followed by “Your call will be answered shortly”
My Predictions for Hard Rock in 2012 Next year will be full of product placements for Hard Rock International. Hard Rock will try to market itself to 21-35 year olds. Look for Hard Rock resorts to be the 'go to' spot for spring breakers. This will bring lots of American dollars to Mexican and Carribean Hard Rock resorts (most spring breakers travel in packs).
As for product placement look for hard rock in films marketed toward young men in the 18-30 age range like 2011 movie 'The Hangover 2'.
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| Hard Rock Cafe Bangkok sweat shirt in 'The Hangover 2' |
Hard Rock will also be advertising its hotels and the night clubs in them during 2012.
Musicians are still brand ambassadors like yesteryear execpt with pop like Sean Paul instead of Paul McCartney. This is heavy product placement in Sean Paul latest video 'Got 2 Luv U'
MP Assignment #9
Long term success for Hard Rock International will happen through the next generation to fall in love with the rock ‘n’ roll themed company. Licensing of domestic cafés for additional money to invest in cash cows like casinos, resorts, hotels and nightclubs. The use of product placement in music videos, songs and movies will increase brand awareness among the Gen Y demographic. Getting hot pop stars to host events at Hard Rock night clubs and staying at HR hotels will build brand equity to Gen Yers (who follow the lead of their favorite pop stars).
