The Gucci Bar by LH Tsai

LXFM Final Project The Gucci Bar

Li Hsuan Tsai Prof:Franca Canepa

Contents I. Introduction

5. Consumer Overview

004-005

04-045

2. Company Overview

6. Primary Research

008-012

047-060

Bar Market Analysis

The Gucci Bar Strategy

014-030

062-092

Hong Kong Overview

Conclusion

032-038

094

PART I.

Introduction

Gucci Bar in Tsim Sha Tsui, Hong Kong. The Gucci Bar will use Alessandro Michele’s aesthetic

Gucci is a luxury brand, which is world-fa- to let customers experience Gucci’s brand image

mous an Italian heritage brand. In recent years, through cocktails and foods. According to BOF, Alessandro Michele’s innovative ideas and designs Hong Kong still ranked number one in consumpput Gucci back on top again. According to Goo- tion of luxury jewelry and handbags, which means gle and Lyst Index, Gucci was the number-one

Hong Kong plays a vital role in fashion industry.

searched brand in the world in 2017. Alessandro

Moreover, The World Tourism Organization es-

Michele’s maximalist aesthetic has created great timates that the number of tourists visiting Hong success on Instagram because Gucci started to use Kong in 2020 is expected to increase to 57 million. Then, Hong Kong will become the fifth most visit-

the same clear design language on everything from

products to social media platforms. Furthermore, ed city for tourists in the world. As a result, Hong Gucci launched more affordable products to reach Kong will be a perfect starting location before exthe groups that are usually unable to afford high- panding to other cities in Asia. The Gucci bar will end luxury goods. These factors led to Gucci’s ex- combine the traditional Italian cocktail “Aperitivio” with Hong Kong’s signature cuisine “Dim Sum.”

cellent business strategy.

Today, true luxury customers are changing their Our goal is to use an amazing drinking experience consuming habits from personal luxury goods to to flip young people’s stereotypes of luxury brands and provide a place for people to get away from their

luxury experiences and services. In addition, new

luxury customers can understand more about lux- busy lives. In order to launch this project, research ury brands through these services and experiences. will analyze the advantages and potential risks of In order to meet consumers’ expectations, more and the Hong Kong market. As for primary research, I will interview the owner of The Draft Land bar in

more luxury brands are engaging in food businesses

such as Tiffany’s café in New York. Through these Taipei to understand Chinese customers’ cocktail services, luxury brands can consolidate their brand preferences and current bar industry trends. The identities and secure loyal customers. According to

surveys will focus on understanding Hong Kong

Bain & Co.’s annual report, sales of luxury wines

citizens’ drinking habits and preferences. Through

and spirits and food are worth 120 billion, up six

this research, The Gucci Bar can perfectly present

percent from last year, more than luxury handbags

Gucci’s aesthetic and meet customers’ needs at the

or clothes. As a result, the food and drink market

same time. As for my deliverables, this research will

will be the new blue ocean strategy for the fashion

include Hong Kong bar market analysis, bar con-

brands in the future.

sumer research, business strategy and marketing

In order to expand its market of young Chi- strategy of The Gucci Bar.

nese customers, Gucci is going to launch The

PART 2.

Company Overview

2.1 Brand History

brand in 2017. Alessandro Michele will definite-

Gucci was founded by Guccio Gucci in ly use his unprecedented designs to surprise the

Florence in 1921. In the beginning, Gucci only

whole fashion industry.

made the luxury leather goods for horseback riding. Before founding Gucci, Gucci was a hotel

2.2 Brand Current Status

manager in Savoy Hotel and he usually observed

2.2.1 Gucci

different luggage from all over the world. These

experiences strengthened his goals to open a store

lishing its brand images in order to break down the

In 2015, Gucci fully focused on re-estab-

to sell luggage and equestrian supplies. Due to ex- stereotype that Gucci was a tired and old-fashioned cellent fabric and craftsmanship, Gucci became a brand. Inspired by Alessandro Michele’s aesthetic, world famous brand and started to open two stores

Gucci began to challenge itself and use innovative

overseas in the 1950s. After Guccio Gucci’s death, methods to change the business climate. For inhis sons followed in their father’s footsteps and kept stance, Alessandro combined gorgeous embroidery Gucci growing rapidly. In the 1960s, Gucci began

with 80s street style to create an unprecedented

to use its iconic logo “double G” in order to show maximalist look. Gucci’s new vision is to redefine respect to its founder, Guccio Gucci. At the same

the luxury for the 21st century luxury in order to

time, Gucci released lots of iconic products such reinforce the company’s position as a leading brand. as the bamboo bag and hobo bag (Background

As for Gucci’s mission, Gucci wants to combine

Gucci). In the 1970s, Gucci entered the Asia mar- their Italian craftsmans=hip with sustainability and ket and opened stores in Hong Kong and Tokyo. promote the diversity of people. In terms of prodThe ready-to-wear was added into their product ucts, the leather goods and shoes offer has been line and they opened a dedicated store to clothing built around new iconic pillars as the main business in New York. After Tom Ford became the creative base, and on innovation and continuous experidirector of Gucci, he brought his strong person- mentation by exploring new territories in terms of al style into Gucci’s designs, which created a new functionalities and market trends to sustain Gucci’s modern and sexy brand image. In 2014, Gucci saw

leadership in the fashion industry (Kering Annual

an unprecedented change after Alessandro Michele Report, 2017). In supply chain management, Gubecame the creative director of Gucci. Alessandro

cci promoted the vertical integration of the supply

Michele’s maximalist aesthetic changed the pub- chain and reduced lead-time in order to optimize lic’s perception of Gucci. Furthermore, Alessandro

their supply chain (Business of Fashion, 2017). To

Michele took fully advantage of social media plat- shorten Gucci’s production cycle, Gucci will open forms and built a strong brand identity from win- the Gucci Art Lab, a new production center, in Itdow displays to Instagram. According to The

aly. The Gucci Art Lab will specialize in manufac-

Business of Fashion, Gucci was the most popular

turing leather goods and shoes.

The center will respond more quickly to today’s develop its social media strategy and gives ideas on trends and source sustainable materials. With a

different processes. Gucci is using the advantages

closer production center, Gucci can speed up the

of different platforms to create one clear aesthetic.

rate at which they launch new products (Mau, Furthermore, Alessandro Michelle also opened hid 2017). Gucci continued to reform their stores in social platforms to the public and allowed people their new aesthetic. In 2017, almost 25% of its

to co-create with him to build shared values with t

stores have been remodeled. In 2018, Gucci will

customers. Two examples are #GucciGram where

finish integrating the entire brand with the brand’s

Alessandro invited artists and illustrators to repur-

new aesthetic. In this year, Gucci hopes to increase

pose three of Gucci’s iconic motifs on Instagram,

the density of its e-commerce and maintain the new

and #24HourAce, where the brand handed over

aesthetic through whole platforms. These factors the reins of its Snapchat account to a series of difwill be key drivers of growth in the next few years.

ferent artists for a full 24 hours and asked them to

2.2.2 Digital Strategy

shoot a creative and colorful mini-video centered

The core spirit of Gucci’s digital strategy is

around the Ace sneakers (LuxuryHighlight, 2018).

based on Alessandro Michele’s aesthetic and tries

In all these strategies, Gucci’s digital strategy put

to tell a story to customers. The ultimate goal of

more emphasis on individualism and emotional

Alessandro is to build an authority in popular cul- connection. More interactions generate more emoture. However, the main issue Gucci faces at the

tional connections and more creative ideas lead to

moment is how to integrate those digital platforms

more unique individualism. As a result, customers

and customers’ experiences to present a brand new are more willing to spend their money. According experience and react to the real sales number. In to Kering’s chairman, 50 percent of Gucci’s sales the past few years, Gucci was always associated with

are from millennials and Gucci became the most-

bad taste. What is the reason that rapidly turned

searched brand with 35 million searches in 2017

Gucci into the most popular brand in the world? (Maria, 2017). In addition to be recognized for a The answer is Gucci’s successful digital strategy. strong social media strategy, Gucci received the Gucci’s main social media platform is Instagram, Momentum Award from SimilarWeb in 2017. Simwhich has 22.6 million followers as of 2018. To- ilarWeb is a market intelligence company which day, Gen Z and Millennials care more about ex- tracks traffic across the entire Internet. According periences than buying stuff. Brands need to use a

to their research, Gucci’s web traffic was more than

strong story to convince these groups to buy their doubled last year (Pamela, 2018). However, conproducts and social media is the best tool to broad- sumers still prefer purchasing products in person cast their value and story. As a result, Gucci has rather than online. In response to this trend, Gucstructured a committee with members all under 30 ci and Farfetch partnered to launch a “90-minute years old. This committee helps Gucci

drive through.” The idea is to bring customers from 9

online to offline. Farfetch provides customers in- 2.2.3 Financial Status store scanners that store staff can use to understand

In 2017, Gucci’s revenue reached $6.62

customers’ wish lists. Therefore, customers can ex- billion, growing 41.6 percent more than it had in perience a more smooth transition from offline to

2016. Retailed sales increased 47 percent because

online. In 2018, Gucci will keep combining Gucci. Gucci improved its productivity. In a matured marcom with e-commerce in different regions.

ket, Western Europe posted the highest increase in

2.2.3 Competitiors

revenue. The main driver was a broader and young-

Today, Gucci is already the top luxury brand er customer base. Due to the brand new appeal,

in the world and Gucci’s competitor is only itself. Gucci was one of the most purchased brands by The fashion and luxury industries must continue

tourists in Europe. In the North American market,

to evolve and innovate to maintain their compet- due to Millennials, sales increased 43.9 percent for itive advantages. Therefore, Gucci is on the right the year as a whole. In the Asian market, all regions track to build its long-term strategy. Influenced by had excellent performance, especially China and its strong brand image and new aesthetic, people Korea. In 2017, Gucci had already renewed almost will start to have more reasons to buy Gucci be- all of their product categories. cause Gucci products have deep significance to customers.

For Leather Goods, Gucci had already replaced all their older collections in 2016. In 2017, sales proved that Gucci is on the right track to build its new brand equity. In other product categories, Gucci also has very strong growth based on the broader customer base. By the end of the 2017, Gucci had 529 directly operated stores, including 222 stores in emerging market (Kering Annual Report, 2017). In 2018, Gucci will focus on finishing its refurbishment program in order to increase growth. Due to the renewal strategy, any aspect of Gucci’s financial status will definitely grow in the next few years.

2.4 Gucci Future Strategy

The Italian fashion house has opened it’s the latest restaurant, Gucci Osteria, in Florence in 2018.

The Gucci Garden in Florence is a retail hub that includes experiences like art exhibits and restaurants, as well as multi-brand collaborations. These endeavors encapsulate what Pinault (Kering CEO) believes to be the future of luxury (Hilary, 2018). This restaurant can be said to be a microcosm of Gucci’s longterm strategy. In other words, restaurants are also a long-term strategy for all fashion brands. The Gucci Osteria is used in-store, which shares the same retailing space with theatre, stores and exhibition space. This is an age where strong brand image and products are not enough. Although e-commerce is becoming more and more important, brick-and-mortar is still the key of future luxury retail. Luxury brands need to know how to drive foot traffic and stimulate customers to spend their money. As a result, 11

improving customers’ experiences become the most important issues for all luxury brands. Engaging in the food business seems like the most common solution that chosen by luxury brands. For instance, Armani has a total of 13 Armani restaurants and cafes around the world. Giorgio Armani said “I’ve always wanted to create a complete Armani lifestyle that reflects my ideas and can be applied to different areas, not just fashion. Restaurants and cafés seemed a logical expansion.”(Business of fashion, 2015) To sum up, the goal of The Gucci Bar is not to generate huge amount of revenue but to give customers another reason to visit Gucci’s store. The Gucci Osteria and The Gucci Bar are Gucci’s long-term strategy of Gucci. However, why does Gucci want to use a food business to improve customers’ experiences rather than other venues? In Hong Kong, Hong Kong residents eat out more than four times a week, which is the highest of any city in the Asia Pacific. The Gucci Osteria and The Gucci Bar will enhance customers’ experiences and help Gucci become a lifestyle luxury brand.

PART 3.

Bar Market Analysis

3.1 Hong Kong Bar Market Analysis

Hong Kong people’s living habits have been deeply influenced by British culture. In addition to

Asia’s unique afternoon tea culture, Hong Kong also has very splendid bar culture in Lan Kwai Fong. Hong Kong is a pioneering city of Asian drinking culture. Bar culture is from Western culture and is also a way of socializing and a lifestyle. According to Euromonitor, in the past the bar industry had focused on strong spirits like Brandy, Cognac and Whisky, which were sought after by consumers in the 80s in Hong Kong. It was a period when customers sought hard drinking and favored volume over the quality of alcoholic drinks. Beer and cocktails were introduced to the drinking scene in the 90s in Hong Kong. During the 2000s, champagne and wine caught on in Hong Kong as bars that focused on hard drinking and the “drink as much you can” concept faded away (Euromonitor, 2016) While sipping a whisky or chatting with a friend over a colorful cocktail, people also sense the echo of people in the same field, meeting new people and receiving new knowledge, sharing each other’s lives. The interpersonal atmosphere is the true draw of bar culture. With Hong Kong’s rapid economic growth, bars have also become more and more diverse. For instance, sport bars are the places where you can enjoy sporting events with amazing beverages. Today, the bar industry continues to grow and open their doors to customers from all around the world. The lifestyle style trend stimulated the growth in capita spending on alcoholic drinks, which reached $210 per year. The growth drives an increasing number of bars.

3.2 Global Alcoholic Drink Market

Zhiyan is an authoritative market-research company in China. According to their report, the sales

of global bar industry had reached 200 billion dollars in 2015. In the next few years, the global bar industry will also maintain a growth rate of around 2%(Zhiyan, 2017). Euromontior uses the forecast model based on global economic conditions to measure possible performance of the global alcoholic drink’s market. There are some possible scenarios due to the different economic conditons. Although total volume sales of alcoholic have not directly related to bar visits, we can understand the development of the bar industry in the next few years.

In China, the government has stopped the movement of cracking conspicuous consumption. As a

result, China’s luxury alcoholic drink’s market can return to the former condition. With global volumes of alcoholic drinks growing at 1.5% over 2011-2016, the importance of driving value sales in all categories has grown in importance, as constant sales increased by 6% in constant US dollar terms at a fixed exchange rate (Euromonitor, 2016)

3.3 China Alcoholic Drink Market

Beer in China plays a dominant role in both Oxford, Robin Dunbar points out people who reg-

volume and value, which it accounts for 29% of ularly drink at bars are usually more happy and total alcoholic drink’s value sales. As for spirits, satisfied with their lives. In addition, the research local spirit “Baijiu” also dominates the market of shows that people who often run local bars have spirits, which accounts for 44% of the total spirit’s more friends. Their average number of friends is volumes. According to these two statics, we can un- 8 and the average number of friends who do not derstand that Chinese has strong preferences of the run bars is 6. Bar can help people strengthen the local alcoholic drinks. As for export alcoholic drink, connection with others and relieve mental illness Chinese prefer high-end cognacs. Pernod’s Martell (Robin Dunbar, 2017). is the most popular brand in China. Moreover, in Chinese culture, high-end alcohol drink can show respect to clients and friends.

3.4 Bar Intangible Value

For many people, the reasons that they go

to bars are not only just for a drink but to make friends. According to BBC’s report, British government is to use to bars to help community achieve sustainable development (Norman, 2017). In the other word, we can change bar into a multi-functional place. People can make new friends or learn the new thing.

In Hong Kong, people all suffered from

long working hours and stressful working environment. Hong Kongers don’t have any social lives. In the last decade, Hong Kongers’ proportions of the unmarried and late-marriage continue to grow. This factor will lead to a very serious social problem. As a result, The Gucci Bar can hold the events or workshops to help people build a relationship. According to the research of the University of

3.5 Bar Trend Analysis 3.5.1 Global Bar Trend

goods. As a result, owner of bars and bartenders

IWSR uses their new product “Radius” to can create more creative drinks to attract custom-

predict 2018 drink trends. Firstly, the moderation ers. and mindful drinking will be future trend because 3.5.2 Asia Bar Related Product Analysis young generation really drink much less than their By analyzing Euromonitor’s bar trend report in parent’s generation. For instance, for some high- Asia, we can identify some major drivers in the bar er-ABV spirits such as vodka has been replaced with industry. In this report, they use frequency of keylower-ABV alternatives such as sherry, port. With word mentioned on the social media platforms to this trend growing popular, bartenders definite- identify changes in the industry. Contrasting keyly need to adjust their recipe to satisfy customers. words in 2016 and 2017, it is not surprising that Secondly, sustainability is still the future trend of generic words like “cocktail”, “menu” and “food” the industry. More and more bars start to use sus- continued to dominate the space. Nonetheless, intainable ingredients and methods such as remov- teresting shifts are also evident, as words like “gin” ing straws. The signature serves are still important. and “craft” gained traction, while topics such as Although this is nothing new, unique drinks and “whisky” and “cognac” seemed to lose steam (Andrinking experiences, these are still the key drivers drea, 2018). of the industry. In 2018, people are predicted to spend 5% more on luxury experiences than luxury 16

Searches for product category, “gin” ranked number one among social media searches. The open-

ing of gin bars such as Atlas in Singapore continued to create a buzz. The annual East Imperial Gin Jubilee also increases the popularity of gin. More and more Asian cities have already joined the trend of gin. Moreover, gin-based cocktails such as “Gin and Tonic” start to replace the status “Negroni”. “Tea” is also one rising keyword because many bartenders in Hong Kong or Taiwan love to use tea as a cocktail ingredient, which indicates that tea is a popular cocktail favor in the Chinese market.

3.5.3 Six Key Trends In Asia Bar Market

From the keyword analysis, gin-based cock-

tails are becoming more and more popular. Between 2016 and 2021, the volume of on-trade gin will grow faster in Singapore, China, India, Japan, Taiwan and Hong Kong than last five years. Due to the growing popularity of Gin, bartenders can use the gin trend to combine local ingredients to increase consumer awareness. Secondly, due to the craftsmanship movement, more and more bartenders are starting to explore their own food & drink culture. Localization has already become the trend in Asian bars. Bars can use this advantage to attract tourists and add more intangible values. For instance, bartender Aki Wang of Indulge Experimental Bistro has been collaborating with Bacardi Group to create a tea-infused cognac liqueur, as well as experimenting with other tea-infused spirits (Andrea, 2018). Rachel Tann, owner of the Remy Cointreau, says that In the past, we used to all be about globalization. However, as the market matures, how can we make something foreign our own, while telling Singaporean and Asian stories in our bars (Drink Magazine, 2018).

Thirdly, the majority of bartenders and cus-

tomers are more and more knowledgeable. Due to this factor, bartenders can boldly use creative ways to design cocktails and bar owners can try to educate their customers by classes or workshops. Fourthly, more and more bars want to build strong connection with their customers. Therefore, many bars launch customized menu to let customers design their own drinks by individual preference. In Vietnam, Layla Eatery and Bar allows customers to mix their own cocktails. Customers can decide

6 Key Trends in Asia

on their own alcohol bases and mix in botanicals or fruits. Today, people are strongly health conscious especially younger customers. As a result, mindful drinking has started to catch customersâ&#x20AC;&#x2122; eyes. More and more bars are starting to provide guilt-free drinks for health-conscious customers. Although it is not popular so far in Asia, this trend will definitely increase in popularity over time. Moreover, in some Asian countries such as China or Japan, drinking habits have gradually changed to match this trend. Some bars in Asia have begun to follow this trend. They replaced high calorie refined sugar with low calorie fruit and reduced amounts of alcohol. To sum up, Asian customers prefer unique drinking experiences, which indirectly drives the customized drinks and the rise of combining local food culture. On the other hand, bartenders should create more health-conscious drink such as guilt-free drinks. Today, the Asian bar industry has already become very mature. Although this market is more complex than any other market in the world, it has become more globalized than before.

3.5.4 Key Market Drivers in Hong Kong

Today, the independent bars are more and more popular due to their innovative drinks and ser-

vices. Furthermore, bar chains also launche multiple kinds of bars under different brand names for specific theme. In addition to live band performances, customers care more and more about experiences and services because Hong Kong people really appreciate their quality of life. In Hong Kong, there are plenty of bars and pubs. However, the trend of the bar usually changes every five to ten years. In recent years, bars that serve craft beers, wine and cocktails have become more and more popular. In Hong Kong, customers consider experience as an important part of the bar. For instance, many bars provide live music or special bar food in order to attract customers. As a result, owners of the bar need to use creative way to build interesting scenarios. This concept will still dominate Hong Kong Bar market over the next few years. 3.5.5 Low Abv and Non Abv Cocktail

As drinking habits changing, people are more longing for low and no abv cocktail. The goal of

drinking cocktails is not about getting drunk. As a result, light beer, other fruit cocktails, or non-alcoholic beverages have become increasingly important in the drinking culture. More and more people are beginning to care about the wine-tasting process. Non-alcoholic cocktail can provide full experience for non-alcoholic customers. Absolutely, the wine-tasting process is including social and relaxation. Non-alcoholic cocktail can provide full experience for non-alcoholic customers and the pursuit of healthy styles. For instance, Seedlip founder Ben Branson explains “If we go out for dinner and you have the wine flight and I don’t? If I’m just having water? A.) I’m not getting the full experience and B.) You’re not making any money from me (Elva, 2018). As a result, more and more bars start to deploy non-alcoholic drinks. As for bartenders, aperitifs and low-alcohol cocktails present a new format for us to play with, says LAbased owner Alex Day. You can strip away the strong personality of a high-proof spirit and begin exploring flavors in different ways. It’s a whole new avenue for creating cocktails (Punch, 2018).

Common alcohol drinks are with high calories and sugar, which is really unhealthy to our body.

Seedlips is a non-alcoholic alternative alcoholic beverage with fresh tastes and no sugar. The founder of Seedlips collaborated with wineries, botanists, and historians. After two years, he finally developed two flavors of alcohol-free distilled spirits. Today, Seedlips has become the most popular cocktail base for the non-alcoholic drink.

3.6 Drinking Habits in Hong Kong

The drinking culture in Hong Kong is not as popular as Western countries. The alcohol consump-

tion per capita is 2.64 liters, which is lower than Japan (7.79 liters) and South Korea (14.81 liters). The Chinese alcohol consumption is 5.56 liters. According to Interface’s drinking habit study, we can under 21

stand Hong Kong residents’ drinking habits and consuming preferences. Compared with other countries, female respondents in Hong Kong, Taiwan and China drink less frequently in Korea and Japan. However, Hong Kong ranks no.2 in monthly alcohol expense (South Korea ranks no.1). Beer, wine and cocktail are top 3 alcohol drinks in Hong Kong. In all countries, taste and price are the most important factors for the customers.

3.5 Future Hong Kong Bar Industry

Hong Kong consumers become picky about dining preferences. They want value-for-money

drinking experiences and premium drinks to experience upstream life. These factors drives bar to keep innovating drinks and services to meet customers’ expectation. Otherwise, customers will embrace other competitors who are able to satisfy their needs.

Hong Kong bar industry is facing a serious shortage of experienced bartenders and customer ser-

vice staff. Hong Kong people don’t consider customer services in food industry an ideal career option. As a result, due to this factor, bar owners need to hire labors from China, which makes them vulnerable to follow cross-border labor restriction. Although staff replacement rates is still the key of the bar industry, the owners still can hire part-time service staff to compensate the vacancy.

Bars have become a place for local residents to social and hang out. These bars target local resi-

dents by offering friendly and affordable drinks. In contrast, high-end cocktails bars are usually opened in the central district of Hong Kong.These bars take an advantage of Hong Kong’s beautiful city landscape. These bars offer lots of interesting events to create a fun experience. The target customers of these bars are tourists. Therefore, compared with local bars, the global and domestic economic performance can directly influence their revenue. 22

3.8 Dim Sum Overview

According to a report by Hong Kong Econom-

ic Times, Hong Kongers visiting dim sum restaurant average 5.6 times per month. More than sixty percent of adults love to choose Siu Mai as their favorite snack. From twenty-year-old to forty-year-old people, ninety-five percent of Hong Kongers love dim sum. Siu Mai is the most popular snack followed by shrimp dumpling, custard bun, steamed chicken claws and mangosteen beef. Furthermore, Hong Kongers love to go to dim sum restaurant with their family on weekend morings because they use this opportunity to enjoy time with their families. 24

Compared with twenty years ago, dim sum 3.8.2 Hong Kong Cha Chann Teng Culture

has been more creative in many aspects. Hong

Cha Chaan Teng culture and Dim Sum are

Kong is a Freeport so that the freshest ingredients two representative food cultures in Hong Kong. all gather in Hong Kong. These ingredients evaluate Cha Chaan Teng is the epitome of the Hong Kong dim sum into the next level and give chefs more op- culture. Cha Chaan Teng is a restaurant that serves tions to design a new cuisine. Furthermore, people both western food and Chinese food. Cha Chaan in Hong Kong become more and more health-con- Teng can represent Hong Kong local food culture scious. As a result, dim sum has to change their and history. Hong Kongers usually go to Cha Chaan traditional cooking way or ingredients. However, it Teng at the afternoon to have a break. After three doesnâ&#x20AC;&#x2122;t mean that the essence of Dim Sum needs pm, Cha Chann Teng will transfer into afternoon to be changed. In the other word, chef should focus tea style. An afternoon tea meal costs almost three on improve customersâ&#x20AC;&#x2122; dining experiences. Fur- dollars, which is much cheaper than lunch. The thermore, Hong Kong is a cultural melting pot, so dishes are including French toasts, chicken wings, that there are many different cuisines from differ- fries and a cup of milk tea. They serve some classic ent. As a result, chefs of dim sum restaurant can Hong Kong food such as milk tea, pineapple bread use this advantage to combine characteristics from and egg tart. Today, Cha Chaan Teng combines the different food culture. As for dim sum, customers food culture from all around the world due to the not only care about how delicious it is but also what large number of foreign workers. Cha Chaan Teng the food looks like because people love to take a keeps innovate new dishes and become the sharing photo before eating. The outlooks of dishes become memory of Hong Kong people. significantly important because nice outlook can easily attract more customers by the social media.

3.9 Leader Analysis in Hong Kong Bar Industry

Bar Pacific Group

Bar Pacific was found in 1999 and opened

its first store in Hung Hom. Their mission is to â&#x20AC;&#x153;Bring Joy to ALLâ&#x20AC;?. Over the years, it has been dedicated to create a unique local pub culture and provide customers quality drinking entertainment. Bar Pacific is currently the largest bar company with 33 stores across Hong Kong, Kowloon and New Territories. The average annual customer flow is 800,000.

Bar Pacific uses different channels, such as

billboards and digital media platforms to promote their latest company information. Moreover, they also adopted mass media such as TV commercials. Bar Pacific also collaborated with different brands and sponsored different activities such as concerts.

Bar Pacific is Hong Kongâ&#x20AC;&#x2122;s first chain man-

agement bar company. In order to debunk the stereotypes about bars, Bar Pacific uses affordable price to let customers experience unique cocktail culture. At their locations, Bar Pacific has wellequipped facilities such as darts and Beer Pong. Bar Pacific regularly launches new food and drinks in order to provide customers with extraordinary drinking experiences. 27

ingredients. For the cocktail enthusiasts, they keep using creative ways to push boundaries of their drinking experience. These factors drove Quinary to become the top bar in Hong Kong. Quniary also sets their drink prices from $12 to $18, which is very affordable (Bars & Restaurant, 2013).

Dim Sum Library

Dim Sum library is a brand under Aqua

group. The biggest feature of this restaurant is offering Chinese cuisines with cocktails. This idea is very similar to The Gucci Bar. However, Dim Sum Library puts more emphasis on dishes than cocktails. Dim Sum library wants to build a modern Chinese restaurant. As for dishes, the chef of Dim Sun Library uses fancy ingredients to take dim sum to the next level. For instance, they combine black truffle har gow or US oysters for a fresh take on the traditional dishes. Dim

Quninary

Sum Library also uses Chinese traditional tea culture in their cocktails. For instance, the One

Quinary was ranked number one in Hong

Thousand Years Song consists of the tea with

Kong’s bar industry by The World’s 50 Best Bars. Tanqueray Gin and chilled Chinese peach puree Antonio Lai is one of the best cocktail bartenders in Hong Kong, specializing in molecular bartending. Lai uses Quinary as a lab for Lai to experiment with his crazy and innovative idea. The name Quinary means a numeral system with five different senses. The signature drink of Quinary is Lai’s Earl Grey Caviar Martini. Quinary uses some iconic Chinese ingredients to build unique cocktails. Quinary even uses laboratory equipment such as a centrifuge and a distiller. They use these machines to reorganize the tastes of 28

(Andrea, 2017).

Ozone

Ozone has the most beautiful night view

in Hong Kong. The cocktail bar and its light restaurant are located in the 118th floor of the Global Commerce Plaza. Ozone has a superb location to admire the night view of the Victoria Harbor. Ozone is designed to appeal the young fashionable and affluent demographic. Ozone doesnâ&#x20AC;&#x2122;t provide too many cocktail but the classic Martini, Litchi Martini and Vesper Martini, show the bartenderâ&#x20AC;&#x2122;s excellent skills. This bar is designed for Hong Kong and trendy hipsters will love this place (Time Out, 2012). 29

Armani Prive

After opening bars in Milan, Tokyo and

Dubai, Hong Kong is the latest location of Armani cocktail bar. Armani/Prive is the splendid combination of a glamorous lounge bar and rooftop terrace bar. Armani Prive is an extension of Armaniâ&#x20AC;&#x2122;s lifestyle and designs. Armani Prive is collaboration between the Giorgio Armani group and famous Aqua Restaurant Group of Hong Kong. Aramani Prive is located on the upper levels of the Armani retail emporium in Central Hong Kong. The rooftop terrace is an ideal place for a drink after work and socializing with your friends. Armani Prive provides signature cocktails and some premium spirits. However, snack of Armani is slightly monotonous. Furthermore, Armani Prive also invite world famous DJs to perform. As a result, Aramni Prive can be the main competitor of The Gucci Bar (Asia Bars & Restaurants, 2012).

PART 4.

Hong Kong Overview

4.1 Introduction

Hong Kong is one of the two special administrative regions of the Peopleâ&#x20AC;&#x2122;s Republic of China.

Hong Kong was a British colony before transferring its sovereignty back to China. It is located on the northern shore of the South China Sea and the east side of the Pearl River. Hong Kong is now part of China, including the Kowloon island area and New Territories. The Hong Kong Island is the most developed and luxury area, which includes the Hong Kong finance area and shopping area. As for its geographical environment, Hong Kong includes the Kowloon Peninsula and constitutes 263 islands. The Hong Kong population is approximately 7.39 millions now. Furthermore, Hong Kong has the busiest airport in the Asia. This is also the reason that Hong Kong is the air hub in the Asia.

4.2.1 Hong Kong Economic Overview

After the economic recession in 2016, Hong Kong’s economy will become but still see growth in

2018. Exports and consumer spending are the main drivers of the economy. Hong Kong’s economy is highly dependent on the free market and international trade. International trade (22.3 of the total GDP), finance (17.6 percent), service industry (12.3 percent) and tourism (5 percent) are the four main industries of Hong Kong’s economy. As for its international ranking, Hong Kong has been ranked as the freest economy for 22 years. According to Global Competitive Report, Hong Kong has ranked ninth among the top ten most competitive economies in the world.

According to HK TDC’s research, many sectors of Hong Kong’s economy are showing significant

growth. Supported by a growing global economy and strong internal demand, the Hong Kong government predicts that Hong Kong’s economy will grow by 3-4 percent in 2018 (HKTDC, 2018). 4.2.2 Economic Reationshio With China

Today, Hong Kong is the most important transit port in China. According to the Hong Kong gov-

ernment’s statics, 58 percent of the re-exports originated from China and 54 percent were to the China. Hong Kong is the third trading partner, following the United States and Japan. On the other hand, China is the main investing resource of Hong Kong. Until the end of the 2016, the direct investment from China was calculated at a market value of $418 billion, accounting for 25.7 percent of all resources. 4.2.3 Center of Asia Pacific Region

Hong Kong is a popular location for international corporations to set up their headquarters or

offices in order to manage their business in the Asia Pacific region. According to the Hong Kong government’s survey in 2017, there are a total of 3,752 regional headquarters and offices. Seventy-six of these companies are responsible for business in China. Therefore, Hong Kong is an excellent platform for doing business with China and also a nice platform to test new ideas before expanding to China.

4.3 Tourism Industry 4.3.1 Tourism Industry in Hong Kong According to Hong Kong’s immigration department, there are 58,472,157, tourists, which is almost 3.2 percent more than in 2016. After facing tourism declines for two consecutive years, the growth rate is back on track. Chinese tourists are the main resource of the Hong Kong tourism industry. Top 5 markets are Taiwan, United States, 4.3.2 Chinese Torists South Korea, Japan and the Philippines.

In 2017, tourists from China were 3.9 per-

According to the Hong Kong Tourism cent than 2016 and the total number is 44,445,259.

Board, business travelers have increased 9.9 per- Chinese tourist accounts for 76% of the total tourcent and reached 4.5 million in 2016. The main ists. Moreover, Guangzhou-Shenzhen-Hong Kong reason of business travelers’ growth is many large express will open soon. The high-speed express conferences and exhibitions hold in Hong Kong. will reduce commuting time between Hong Kong Business travelers usually spend on fine dining in and Shenzhen and directly stimulate more Chinese restaurants or bars in order to relax from the stress- tourists to visit Hong Kong. With Hong Kong resful work. The average consumption of business idents’ anti-China attitudes fading away, more and traveler is $827 per capital. As a result, bar owners more Chinese tourists are gradually coming back can adopt suitable strategies to target the growing to visit Hong Kong. The main factor that drives number of business travelers (Hong Kong Tourism Chinese to visit Hong Kong is cultural distance. Board, 2016).

Culture distance is a source of curiosity for Chi-

However, Hong Kong’s tourism industry is nese tourist but also a source of dissatisfaction of

unable to shake off its high dependence on Chinese tourism services at destinations. However, the cultourists. Although Chinese tourists can bring huge ture and economic difference have already affected economic profits, this factor also drives the tourism Hong Kong people’s lives, which lead some Hong industry to become more and more uniform and Kong people to have anti-communist mentality. boring. Therefore, Hong Kong’s tourism industry

In recent years, Chinese tourists have start-

should develop more diversely in order to attract ed to change their consuming habits. They care customers from different countries.

more about the experiences rather than luxury goods now. Chinese tourists spend more on accommodation, dining and experiences. Moreover, Chinese tourists prefer using mobile payment. As a result, stores must make some changes in order to react to this trend.

Forecasts of Visitor Arrivals to Hong Kong 2016-2020 Source from: The Hong Kong Polytechnic University 35

4.4 Long Hour & Poor Working Condition

introduce innovative dining concepts and display new brand images.

Hong Kong has been the city with the lon- 4.5.2 Advantages of Hong Kong Catering Market

gest working hours for a long time. According to

Hong Kong is the capital of Asian cuisine

government data, thousands of people work more and has a variety of restaurants. Moreover, there than 75 hours a week (Ng, 2018). The long work- are six Michelin three-star restaurants in Hong ing hours will lead to both mental and physical Kong and nine restaurants were selected as the problems. According to a 2016 census report by

“Best Asian Restaurant in Asia 2016” by William

the Hong Kong government, 3.43 million work at

Reed Business Media in the United Kingdom (In-

least 60 hours a week. The high social costs and vestHK, 2017). As for the tax system, Hong Kong risks that caused by long-working-hour culture will

is the world’s freest economy, with low tax rates and

have a determine effect on society. For some types

simple tax system. Hong Kong has comprehensive

of jobs, such as professional drivers or medical ser- transportation and logistic infrastructure, which vice workers, excessive working hours will bring

can reduce your shipping cost and increase oper-

dangers to workers and clients alike. The whole so- ation efficiency. As for Human’s resources, Hong ciety is put a risk by the long-working-hour culture. Kong has very concise and simple employment regFurthermore, one in six Hong Kong people suf- ulations and well-trained workforce. Furthermore, fer from mental illness (Louise, 2017). As a result, Hong Kong has many large events for the catering government and the whole society need to work to- industry such as Taste of Hong Kong and Hong gether to find the solution. Furthermore, providing Kong food expo. These activities can be the suita suitable place for people to relax, such as cocktail

able platforms to promote new idea and introduce

bar or spas, is also important.

new businesses. In 2016, there were more than 243

4.5 Hong Kong Catering Industry

thousand people working in the catering industry

and the revenue from catering was 12,749 million dollars.

Hong Kong is an international cosmopoli- 4.5.3 Risks of Hong Kong Catering Market

tan city and Asia’s premier tourist city. Hong Kong

The main risk in Hong Kong’s catering

is a place where Eastern culture meets Western market is Hong Kong’s economic status. Howevculture. As a result, Hong Kong has a very strong er, Hong Kong’s economic status has improved in rich food culture and different kinds of restaurants. the recent years. There are still some factors that Hong Kong local residents have high incomes and

will affect the development of Hong Kong’s cater-

enjoy food and drink. Furthermore, Hong Kong ing market. First of all, Hong Kong’s government has an excellent service culture and transportation changed the minimum wage from US 3.5 to US network. Therefore, Hong Kong is an ideal place to 3.8. This regulation will have a direct impact on 36

the industry. The owner of the business needs to absorb rising wages, which may increase their operating income. The barriers to entry for catering businesses are very few. However, new business owners of business could face minimal bureaucracy when applying for official licenses. Moreover, due to the competitive environment, the survival rate for new businesses is very low. Owners need to quickly respond to the changes in the market and used creative promoting strategies to attract customers.

4.6 In-store Installation

Today, brick-and-mortar stores are strengthening one thing that Internet can’t do: real world

experience. The in-store food or drinks are the most common that brands add into their stores. These services can increase the traffic but also help brands deliver their brands’ messages. For instance, the Vivienne Westwood in the Shanghai brought in an annual revenue of $1.3 million. According to managing director of Vivienne Westwood café in the Hong Kong, she said “We can’t say exactly how much traffic the cafe has drawn to the Vivienne boutique shop next door…But it is a win-win situation for both the Vivienne cafe and the boutique.” Furthermore, the posts of bar or cafes on social medias can also increase the brand awareness of brands. The food or drink markets are very explosive due to the economic growth. Retailing brands can use this advantage to transform online customers to visit their brick-and-mortar stores (Yu Yifan).

PART 5.

Consumer Overview

5.1 Bar Consumers in Hong Kong

with the latest fashions and are willing to try new things. The other one are achievement-oriented consumers who like high quality products and also

Hong Kongâ&#x20AC;&#x2122;s bar consumers are mostly care about the social problems such as environment

white-collar workers. The main demographic of bar issues at the same time. The motivation that people customers in Hong Kong are males and females visit luxury bar rather than regular bar is about refrom 25 to 40 years old. Among them, unmarried warding themselves. This group really focuses on people are the main consumers of bars. Their in- quality of lives and is more willing to spend more come is above $2500 per month, which belongs to money to enjoy the lives. the middle-income group. This income is not a very

Due to their intense working environment,

high income in Hong Kongâ&#x20AC;&#x2122;s society. However, the Hong Kongers usually go to work at 9 or 10 am bar owners wants to stimulate people buying more and take an hour break at the noon. They will be drinks. Therefore, the price of single cup of cocktail off work at five or six pm and go to Happy Hour, is affordable. Especially, in recent years, consump- which is from six to eight pm. After Happy Hour, tion of alcohol by women increased rapidly. These they start their dinner around nine or ten pm. Ficustomers are usually highly-educated people. Due nance and entertain industry are two significant to intense working environment, they go to bars in industries. They are usually off their work after order to relax and socialize. The psychographic of nine pm. Therefore, this factor leads both bars and Hong Kong has two main categories. The first is restaurants still opened until two or three am. fashion-oriented consumers who liketo keep up 40

5.2 Millennial Consumer

According to Deloitte report, Millennials

are more willing to spend their money compared with their parents. Chinese Millennials is the most powerful group in the world, which accounts for 400 million people. There are five major factors affecting Millennialsâ&#x20AC;&#x2122; consuming habits or behaviors (Hua, 2017). Firstly, the Millennials consumers prefer to consume experiences rather than goods. In terms of gender, females choose to consume experiences rather than the male. Secondly, the Millennials care about sustainability. In terms of food or drink, they have more healthy diets style and love high-quality dining experiences. Thirdly, Millennials are all heavily addicted to social media. They receive all kinds of trends or information through the social media. Iconic Internet celebrities have a huge influence on the Millennials. Especially, Chinese Millennials are strongly influenced by the digital content, social media and key opinions leaders. They will decide what to eat or wear based on influencersâ&#x20AC;&#x2122; posts. They are looking for quality products, inspirations and truly luxury experience. However, Hong Kong Miilennials usually use Facebook as their major social media platform, accounted for 57 of the total Hong Kong consumers. Chinese Millennial customers use WeChat as the most popular social media platforms. Therefore, Chinese social media platforms such as Weibo or Yuku are important to target Chinese Millennials customers. Fourthly, Millennials usually have very low brand loyalty. The reasons that they buy products are they think products look attractive or they believe in brandsâ&#x20AC;&#x2122; values. Moreover, the 41

experiences of products are more persuasive than their parents in some respects. In the past, Chinese others’ opinions. The main reason is that the Mil- drinking culture was based on business because lennials are very experience-driven and social-driv- people usually use drinks to build relationships en group. They are easily attracted to the store by with others. Today, drinking is more about relaxing, a new concept instead of products. Furthermore, enjoying time and with friends. Millennials love to take photo and upload to the

social media platforms.

according to China Landscape 2016, the aver-

age number of consumers who drink two times of

In terms of food, Millennials are known as a

Taking China’s wine market for example,

food lover generation. They love to try new exotic wines among the Millennials has reached 48 milcuisines, and they are also easily affected by trend. lion (Xavier, 2016). The research also found out Because of their health concerns, they will pay ex- that the millennials prefer buying wines online. tra attention to food resources, food additives and whether or not the brand is environment-friendly. Millennials are proud of their “food safety awareness.” As a result, the potential market needs to provide a friendly, cool and healthy dining environment.

5.3 Chinese Alcohol Consumer

Chinese have been recognized as a group

that uses alcohol in moderation. The drinking habits of young Chinese usually resemble their parents’ drinking habits. There are some reasons that why Chinese consume fewer alcoholic drinks than Western country. Chinese society is based on Confucian and Taoist philosophies, which emphasize on moderation. As a result, Chinese tend to drink moderately due to their philosophies and health consciousness. Furthermore, genetically, some Chinese have a protective genetic factor that slows the removal of alcohol from their body, which makes them uncomfortable and flushed when overindulging alcohol. However, Chinese Millennials differ from their 42

Source: Simmons Spring 2017 NHCS Adult Study 12 months

5.4 Millennial Alcohol Consumer

It is not new news that Millennials (aged from 18 to 34) drink less than their parents’ generation.

However, there are some misunderstandings about Millennials’ drinking habits. One little known fact is that Millennials drink more liquor than their predecessors did at their age. Emerging Millennials also show greater interest at an earlier age and in a broader variety of alcoholic drinks (Collage Group, 2018).

Older Millennials drink a broad variety of alcohol. Fifty-seven percent of Millennials are diverse

drinkers and emerging Millennials are more willing to go to bars than that age group was five years ago. According to Cellar Trends, almost nine out of ten younger drinkers now enjoy cocktail when they are on a night out. Furthermore, Millennials around the world care more about their health. As for drinks, some of them prefer gluten-free drinks or non-alcohol cocktails. At the same time, more and more bartenders are starting to use as many fresh fruits as they can and minimize the waste. For instance, bartenders serve up a cocktail in a hard-shelled husk of coconut rather than a regular glass. The “World Class Bartender of the Year” competition also reports that nearly one in two customers expressed a willingness to pay a 10 percent premium for socially responsible and environmentally friendly goods (Prem, 2017). Millennials also prefer a unique drink with an amazing story because they care more about the drinking experience rather than a common drink.

According to the above factors, we can understand that alcohols still play an important role in

Millennials’ lives and they just change their tastes. Millennials is the biggest group of wine consumption in USA. Compared with other generations, Millennials don’t hesitate to pay for high-quality food and drink. Craft beers and high-end wines all prove that Millennials are more willing to pay for high-quality drink. As a result, bars are not necessary to lower the price of drink. However, they need to come up with new ideas of cocktails and do their best to improve consumers’ drinking experience. 43

5.4.2 Hong Kong Consumer Behavior

A survey of purchasing habits of Mastercard customers, successfully interviewed 8,235 consumers

from 16 countries including China, Hong Kong, Japan, South Korea and so on. The survey showed that the purchasing power of Hong Kong consumer remains strong. The average monthly expenditure on dining was $225, which was ranked No. 1 in this region. More than 80 percent of the respondents had eaten at family restaurants, followed by fast food restaurants, food courts. Hong Kongers’ average consumption in the bar is from $30 to $50. However, the expense in luxury bar can reach to $100 or higher.

Hong Kong people’s disposable income has reached 2800 dollars per month on average. At the

same time, annual per capita consumption has also reached 27,051 dollars. In the future, Hong Kong residents’ disposable income will be predicted to continue to increase.

5.5 Potentail Consumer from the Luxury Market

According to The State of Fashion by Business of Fashion, Hong Kong is predicted to rank second

in sales of the fashion footwear, and number one in fashion jewelry and handbags in 2025. Chinese consumption of luxury goods accounted for $120.4 billion, which was equivalent to buying half of the global luxury goods globally in 2016. Hong Kong is still the preferred area to the shop for the luxury goods for the Chinese. However, young luxury customers will reduce their consumption of the traditional luxury goods. One main reason is that many luxury brands are launching e-commerce websites in China. As a result, luxury brands need to add extra values to their products. For instance, Cucci launched its dog year collection to feature Chinese New Year. In neighbouring Hong Kong, consumers have a more perhaps realistic, definition of luxury. The most popular definition is “expensive”, or “not essential in day to day life”. This is an interesting finding considering both the Mainland Chinese and Hong Kongers share a common ancestry and culture. What exactly makes the difference? Economic euphoria in China V.S slowed growth in Hong Kong could be one factor (Amrita, 2017).Compared with Chinese consumers, Hong Kong consumers prefer luxury experiences rather than luxury goods. Therefore, The Gucci Bar will focus on improving customers’ experiences.

As for the luxury market, Hong Kong residents and Chinese tourists all put strong emphasis on

brand names. Therefore, Gucci is a synonym for high quality and excellent services. Furthermore, Gucci launched its brand new home goods collection, featuring cushions, candles, incense trays, chairs, screens, wallpaper, metal trays and metal folding tables (Madeleine, 2017). The bold and imaginative design of home goods has impressed and won over the hearts of the Chinese Milllennials. The Gucci Bar can be an ideal place to display this collection and launch some “The Gucci Bar limited products” such as The Gucci Bar’s cocktail glasses or t-shirts to attract existing Gucci customers. The Gucci Bar will combine both existing collections and cocktail dining services, with an understanding that both markets are important. The Gucci Bar will help the existing Gucci store increase customer traffic and boost sales. 44

PART 6.

Primary Research

6.1 Introduction of the Primary Research

As for my primary research, it includes two observations, two surveys and interview. Two obser-

vations have been placed in Gucci Garden, Florence and Gucci Harbor City, Hong Kong. The goals of the observation are to understand the customer base and the latest Gucci’s aesthetic in their stores. The surveys focus on two different groups, Hong Kong residents and Chinese. The goals of surveys are to understand preferences of targeting groups and find the common points between these two groups. Moreover, in order to understand the Millennials customers’ preferences, cross-analysis uses the results of two surveys to analyze their preferences and attitudes toward The Gucci Bar. As for the interview with the owner of Draft Land, we can understand the latest trend of the bar industry and the Asia cocktail trend.

6.2 Observation-The Gucci Store in Harbour City

According to observation in Gucci Harbor City, The Gucci store is a two-floor space. According a

short interview with Gucci’s staff, the customer traffic on week-days is around 2000 people and the peak time is afternoon and after dinner. Tourist account for more than 90 percent of customers. Moreover, the largest age group is from 25 to 35 and young customers accounted for 80 percent. As a result, the average customer is a younger-generation Chinese person. Furthermore, the Gucci store has traffic control in order to provide a comfortable consuming space for customers. Gucci Hong Kong doesn’t provide any sales promotions or local marketing strategies.

6.3 Observation-The Gucci Garden, Florence

The Gucci Garden is the brand new conceptual retailing space in Florence. The Gucci Garden

includes a retailing store, an exhibition center and a restaurant. This observation will focus on the Gucci Osteria restaurant, which invites the three-Michelin-star chef Massimo Bottura to serve up high-end dishes. As for the interior design of restaurant, Alessandro Michelle created many hand-printed pattern on the walls and floors. As for tableware and furniture, Gucci Osteria uses the latest Gucci home goods collection from screens to cups. As a result, The Gucci Bar can use the same concept to place existing products in the bar.

6.4 Survey- The Gucci Bar Customer Research

The research objectives of this survey are to understand Hong Kong peopleâ&#x20AC;&#x2122;s preferences and

opinions toward The Gucci Bar. Through the answers from the respondents, we can understand their opinions toward existing bars and find the solutions to improve The Gucci Barâ&#x20AC;&#x2122;s products and services. A random sampling will be chosen to represent our target population. As a result, a random sample will have an equal chance of being selected. With the regard to surveys, I will confine our targeting population into the group that aging from 18 to 45. This research will only include two targeting population. One group (100 respondents) will focus on Hong Kong residents. The other group (337 respondents) will target on Chinese tourists, which is including Taiwanese and Chinese. The result of survey will help us understand the target groupsâ&#x20AC;&#x2122; bar preferences and opinions toward fashion brands opening a cocktail bar. Furthermore, survey will discover a mutually beneficial relationship between fashion brands and cocktail bar. Through this research, we can properly construct our business strategy.

In order to combine to quantitative data with quality, another survey was designed based on my

research of Hong Kong bar industry and drinking habits. The online surveys were designed with Google docs and uploaded to collect responses. The URL of the survey will be sent to the targe population and completed online. 6.3.1 Survey Analysis (Chinese tourists)

In total, there are 337 surveys are being collected. According to the table below, the surveys were

gathered from customers mainly ages from 18 to 35, which id the Millennials generation. In total 74.5 percent of participants have been to Hong Kong and 37.8 percent of participants have been to bars in Hong Kong (existing customers). According to the survey, 63 respondents income are from $2500 to $4000. 126 respndents income are from $1000 to $2500. 48 respondents income are above $4000, which are mostly people above 45 years old. 99 respondents income are under $1000, which can be students

In order to uderstand existing bar consumers’ preferences and the potential market, the cross-analysis will be used on Q.6(Which bar do you usually like to go to?), Q.7 (Which part of the bar do you care about?), Q.8( How much do you usually spend in the bar?) and Q.9(Have you ever been to any Italian cocktail bar in Hong Kong?). In total, there are 95 respondents that have been to Hong Kong’s bars. According to the table below, the surveys show that lounge bar is the top option of the Chinese Millennial customers followed by the cocktail bar and the craft beer bar. Among Millennials customer, live house is third option that they usually go to. Therefore, we can predict that Millennials customers view music as a very important part of the bar.

In order to understand customers’ bar preferences, I use Q.7 (Which part of the bar do you care

about?). According to the table below, the top three options are service, location and quality of food. However, the interior design of bars is the least important part for the existing customers. Millennial respondents consider drink quality is the most important factor. Q.9 (How much do you usually spend in the bar) is to understand existing customers’ consuming habits in order to develop The Gucci Bar pricing strategy. 70 respondents answered that they usually spend $16 to $30 or above $30. However, among Millennial customers, the spending range is between $16 and $30. Furthermore, according to Q.10 ( Have you ever been to any Italian cocktail bar in Hong Kong), 80 percent of the total respondents answered that they have never been to any Italian cocktail bar in Hong Kong. Therefore, The Aperitivo style cocktail is very new and unfamiliar with the Chinese tourists. In the next part of survey, the questions will focus on both existing customers and potential customers. Q.12 (If Gucci launches the Italian cocktail bar in their store in Tsim Sha Tsui, will you have the interest in visiting their bar?) is to understand 50

touristsâ&#x20AC;&#x2122; attitude toward The Gucci Bar. According to the survey, the existing customers rate The Gucci Bar at 6.2 out of ten points, and potential customer is at 4.8. Nevertheless, Millennial customers give higher points than any other group, averaging 6.3. Moreover, we will use the results from cross-analyzing Q.11 (Have you ever shopped in the Gucci Hong Kong) and Q.14 (Will you increase brand preference after you consuming in The Gucci Bar) to understand whether The Gucci Bar can help Gucci increase brand preference or not. According to the survey, 200 respondents answered that they never shopped in Gucci before, which can be considered as our potential Q.13 (What kind of dim sum is the best suited for cocktails?) is an open-ended question.

The goal of this question is to understand what kinds of dim sum can match our Italian cocktails. According to the survey, the top five dishes of Chinese tourists are Shang Hai dumpling, fried sesame balls, shrimp dumplings, pork siu mai and steamed pork ribs with plum and black bean sauce. Based on the result, we can develop our creative dim sum cuisine for The Gucci Bar. Although some respondents think cocktails dim sum doesnâ&#x20AC;&#x2122;t complement, there are some similar restaurants providing cocktails and dim sum based on my secondary research. 6.3.2 Business Travelers

Among all respondents, business travelers only account for 24.8 percent of the total. Among all

business travelers, 93 percent are over 35 years old. However, business travelers have high incomes and 47 percent of this age group had been to bars in Hong Kong. Lounge bars are the first choices for business travelers and over 83 percent of business travelers spend more than $16 in bars. As a result, business travelers can be one potential group for The Gucci Bar. 51

6.3.3 Survey Analysis (Hong Kong Residents)

In total, 100 surveys were being collected. Although this survey focuses on Hong Kong residents, 11

people answered that they donâ&#x20AC;&#x2122;t live in Hong Kong now. Due to the helps from my friends in SCAD Hong Kong, this survey can successfully reach its goal. This survey also focuses on both existing customers and potential customers in the Hong Kong bar market. According to the table below, the major participants are also from 18 to 35. As a result, we can understand Hong Kong Millennials consuming habits. Among all participants, there are 55 percent that go to bars at least once a month, which can be considered as our existing customers. Among Millennials customers, 56 percent of respondents answered that they go to bar once a month. Q.5 (Which bar do you usually like to go to) and Q.6 (Which part of bar do you care about?) are to analyze the preferences of the existing customers. The top three option that Hong Kong like to go to are cocktail bars, lounge bars and craft beer bars, which are the same as for Chinese tourists.

Q.6 (Which part of the bar do you care about?) is to help us understand the preferences of Hong Kong people. According to survey, interior design, quality of drinks and services are the top three considerations of Hong Kong consumers. Q.7 (How much do you usually in the bar?) is to understand the alcoholic expenses of Hong Kong people. According to the survey, 30 percent of the existing customers spend more than $30, which is much higher than Chinese tourists. Furthermore, compared with Chinese Millennials customers, Hong Kong Millennials customers are more willing to spend more money on the alcoholic drinks. The next part of survey will focus on both existing and potential customers of The Gucci Bar. Q.10 (If Gucci launches the Italian cocktail bar in their store in Tsim Sha Tsui, will you have any interest in visiting their store?) is used 10-0 points to evaluate the scale of peopleâ&#x20AC;&#x2122;s interest. According to the survey, the total customer average attitude toward The Gucci Bar is 6.5, which is higher than Chinese tourists. As for the Millennials customers, the point is 6.6. As a result, we can predict that Hong Kong customers are highly interested in The Gucci Bar. As for Q.8 (Have you ever been to any Italian 52

cocktail bar. Therefore, The Gucci Bar needs to use other characteristics to attract Hong Kong customers. Q.9 (Have you ever shopped in the Gucci store in Hong Kong?) is to divide Gucci’s existing customers from potential customers in Hong Kong. Q.9 (Have you ever shopped in the Gucci store in Hong Kong?) and Q.12 (Will you increase brand preference and loyalty for Gucci after you consuming in The Gucci Bar?) are to understand whether The Gucci Bar will have a positive effect on Gucci’s customers in Hong Kong. Through cross-analysis of these two questions, according to survey, 62.5 percent of potential customers will be possible to increase their preferences after they visiting in The Gucci Bar. On the other hand, 80 percent of the total existing customers will be possible increase brand loyalty after consuming in The Gucci Bar. Q.11 (What kind of dim sum is best suited for cocktails?) is to understand Hong Kong’s tastes and preferences for dim sum. According to the survey, shrimp dumpling, sponge cake, pork siu mai, fried chicken wings and fried pork puff are top five dishes.

6.5 Hong Kong Residents V.S Chinese Tourists

The survey aims to find the common features between Chinese tourists. In order to understand

bar type preferences from both groups, Q.(Which bar do you usually like to go to?) can help us understand what kinds of bars are popular among these two groups. The figure below is the top three types of bar that they usually like to go to. According to the figure, the bar type preferences among these two groups are the same. Their first choices are both lounge bars. Therefore, The Gucci Bar can be positioned as a type of lounge bar. However, among Chinese Millennial customers, live house is the third highest option of bar type preferences. Chinese Millennilas tourists are the major target customers for The Gucci Bar. As a result, The Gucci Bar can hold musical events to attract the Chinese Milennials. Q. (Which part of the bar do you care about?) is to understand how to give the best customer experience for The Gucci Bar. With data from both groups of existing customers, we can understand the ranking of both internal and external factors. The chart below shows the ranking given by Hong Kong residents and Chinese tourists.

The table shows that the quality of drinks and service are both ranked among the top three im-

portant factors. Therefore, how to improve quality of drinks and service is the first priority of The Gucci Bar. These two factors will be preferentially considered in The Gucci Bar’s business strategy. On the other hand, interior design is ranked No.2 for Hong Kong respondents but ranked No.5 for Chinese tourist respondents. Therefore, interior design of The Gucci still can’t be ignored. For the Chinese Tourist respondents, location plays an important in the ranking. The Gucci Bar should be located in a prominent and easily accessible place such as commercial area. Comparing with both group of the expense in the bars, 42 percent of the Chinese tourist respondents are willing to spend $16 to $30 in the bars and 29 percent of the Chinese tourist respondents are willing to spend more than $30 dollars.

As for the second part of the survey, we can find out 80 percent of the Chinese Tourist respondents

had never been to any Italian cocktail bar, which is much higher than among Hong Kong respondents. Q. (Will you increase brand preference and loyalty for Gucci after you consuming in The Gucci Bar?) is to evaluate whether The Gucci Bar strategy will reach its goal or not. 64 percent of Hong Kong respondents answered “Yes” and 62 percent of Chinese tourist respondents answered “Yes”. The biggest feature of The Gucci Bar is our Dim Sum. As a result, it is really important to understand preferences from both groups. The table below shows the top five dim sums as chosen by the two groups.

As a result, these seven kinds of dim sum will be developed into creative cuisines in The Gucci Bar.

Moreover, dim sum is usually paired with Chinese tea. The Gucci Bar can combine this culture with the Italian cocktail.

6.6 Hong Kong Millennial V.S Chinese Millennial

Among 142 Chinese Millennial respondents, 53 percent answered that their income is under

$1000. The age group from 25 to 34 has already entered the work force. However, 38 percent of this age group earn under $1,000 per month and 51 percent of this age group earn from $1,000 to $2,500 per month. On the other hand, 44 percent of Hong Kong Millennial respondents have income from $1000 to $2500 and 22 percent of respondents have incomes exceeding than $2500.

Hong Kong Millennial Income As for bar expenses in the bar, 64 percent of Hong Kong Millennial customers spend more than

$16, which is higher than 50 percent of Chinese Millennial customers. This result matches with the fact of high income of Hong Kong Millennials. The potential Hong Kong Millennial customers are a group that goes to bar once a month and shop in the Gucci stores in Hong Kong. According to the interest scale of Q. (If Gucci launches the Italian cocktail bar in Tsim Sha Tsui store, will you have the interest in visiting their bar?), 60 percent answered more than five points. Therefore, we can predict that The Gucci Bar can reach the customers that their regular businesses can’t reach. As for the potential Chinese Millennial customers, 66 percent of the potential customer answered more than five points. According to these two groups, shrimp dumpling and Siu Mai are two mutual cuisines. Therefore, The Gucci Bar can develop these two cuisines based on Millennials customers’ tastes. The infinite goal of The Gucci Bar is to build Millennials customers’ brand loyalty and preferences because this group is considered the most infidelity customers. According to Q. (Will you increase brand preference and loyalty for Gucci after you consuming in The Gucci Bar?), 68.5 percent of Hong Kong Millennials customes answered “Yes” and 60.4 percent of Chinese Millennials customers answered “Yes”. 56

6.7 Interview with the Owner of The Draft Land

Goal: To understand the latest trend in the Asia Bar industry

Introduction of the interviewees: The Draft Land is the Asia’s premier standing bar. The Daft Land is using advanced nitrogen storage technology to store premixed cocktail. Angus Zou and Gina Huang are a couple and also the owner of Draft Land cocktail bar. Angus Zou is the champion of The World Class cocktail competition in Taiwan. Angus also had worked in many British bars in London and become the intern bartender in Tokyo. These working experiences let him understand the nature and background of liquor. Gina Huang was the owner of café and staff in Agnes b. café in Taipei. Gina specializes in cuisine and desserts and Angus is in charge of the drinks. Draft Land is a brainchild of integration of their expertise.

Questions: 1.Why does The Draft Land want to use standing bar rather than common bar style with seats?

The biggest advantage of the standing bar is to let people meet new people. However, the standing

bar is not about the trend. We hope not only to create the trend but also attitudes and choices of life. The standing style bars or restaurants are more widespread in the more mature cities. We just brought this lifestyle back to Taiwan. 2.What do you think the biggest difference between pre-patched cocktail and regular cocktail? Do you think cocktails on tap will be the future trend?

We use high-pressure gas to push the pre-mixed cocktail out of the barrel. As a result, without

bartenders in the bar, we can also supply good quality cocktail drinks. Draft Land replaces on-site mixing with precise calculation of ingredients and uses nitrogen, carbon dioxide, or a mixture of gas to stimulate bartenders’ stirring, shaking, and rolling techniques to complete an excellent cocktail. This homogeneous, fast and clear service structure allows customers to try the tastes instead of blind drinking. 3. According to your experiences, what is the biggest change of the bar industry in the recent years? What is the possible direction of the future trend?

With the maturity of drinking culture, Asia bar industry will have a variety of forms and contents.

The keys factors will be using local ingredients and re-understand the traditional food culture to create the drinks that only appears in the Asia. It is more about delivering the messages rather than just simply drinking. 4.What is the core spirit of Draft land? What is the reason that leads you to open this bar?

The customers’ age is from 23 to 35. Local and foreign guests all appreciate this type of the bar.

However, the tastes are more about personal subjective consciousness. However, Draft Land can provide testing drink that is not available in the regular bar. Therefore, most people can find their favorite flavor from testing. 5.Is there any difference in tastes or preferences between young and old generation?

In the last few years, Asia’s cocktail culture is not so mature. The majority of the elder group still

prefers single-testing red wine or whisky. However, in recent years, Asia’s cocktail culture has grown vigorously and received nice ranking in the world-class cocktail competition, which indirectly guides the public to understand the cocktail culture. As for tastes, there is nothing different between two groups. In other words, we can say that the culture of cocktail has not been opened yet.

6.8 Comprehensive Findings of the Products

In recent years, Asiaâ&#x20AC;&#x2122;s cocktail has become more and more mature. The global bar industry will

maintain a growth rate around two percent in the next few years. According to my secondary search, gin-based cocktail will be the main trend among cocktail alcohol market. Due to the rising health consciousness, non-alcoholic cocktail will become more and more popular in both Western and Asia market. Based on my secondary research and interview, using local ingredients and traditional food culture will be the new trend for bartenders to design new drinks. As for dim sum, there have been some restaurants served dim sum with cocktails instead of tea. Moreover, according to my survey, respondents showed high interested in dim sum with cocktails. Shrimp dumping, fried sesame ball, Shanghai dumpling, Siu Mai and steamed pork rib are top five dishes that were selected by Chinese tourists. On the other hand, shrimp dumplings, sponge cake, Siu Mai, chicken wings and fried pork puffs are top five dishes selected by Hong Kong residents. Today, dim sum customers not only care about the tastes of the dim sum but what it looks like. According to the interview of the interview, pre-patched cocktail can be the future of the bar industry. By the progress of nitrogen storage technology, pre-mixed cocktail can have the same quality as regular cocktails. This technique can solve the long-term problem of blind testing.

6.9 Comprehensive Findings of the Consumers

Millennials customers are from 25 to 35. According to my secondary research and primary re-

search, Hong Kong Millennial customers have higher income and are more willing to spend more money on alcoholic drinks. Moreover, female alcoholic consumers are increasing rapidly in the recent years and they care more about the experiences rather than goods. According to the primary research, customers of Draft Land are from 23 to 35 years old and young customers are accounted 90 percent of the total customers. Millennials customers pay extra attentions to the sustainability than any other generation. Based on my survey, lounge bar is the top option of the Chinese tourists and Hong Kong residents. However, live house is the third option for the Millennials customers. Therefore, music is a very important factor that will affect the decisions of the Millennials customers. There are some misunderstandings about Millennialâ&#x20AC;&#x2122;s drinking habits. One biggest difference is Millennials drinks more liquor such as cocktails than their predecessor did at their age. As for Chinese alcoholic consumers, the purposes are usually for businesses or social interaction. According to primary research, business travelers are more willing spend more money on alcoholic drinks and love to go to bars. Business travelers are also one major customer resource for the Hong Kong bar industry. According to the survey, service and quality of drink are two common factors that Chinese tourists and Hong Kong residents care about the bar. Today, Hong Kong bar consumers want the value-for-money drinking experiences. However, the major problem of the Hong Kong Bar industry is a serious shortage of experienced bartenders and customer service staffs. According to the interview, standing bar can drive people to meet new people, which is very popular in the mature 59 city.

6.9 Comprehensive Findings of the Placement

According to the surveys, 80 percent of the Chinese have traveled to the Hong Kong and 33 per-

cent of the Chinese have been to the Hong Kong more than four times. Chinese tourists are the major tourists of the Hong Kong tourism industry, which is accounted for 76 percent of the total tourists. Moreover, Chinese touristsâ&#x20AC;&#x2122; consuming power play an important role in the Hong Kong economy, especially the luxury market. According to the observation, 90 percent of the customers in Gucci Harbor City are Chinese tourists and the major age group is from 25 to 35, which is the Milllennials group. Furthermore, Hong Kongâ&#x20AC;&#x2122;s average monthly expenditure is $225, which is the highest in the Asia-Pacific region.

PART 7.

The Gucci Bar Strategy

7.1 Target Customer Demographic: The target customers of The Gucci Bar will be both Hong Kong residents and Chinese tourists. Customers will be both male and female, aged from 20 to 35, which includes both younger and elder Millennials. The marital status of our target customers are mainly single or couples without kids. They live in the urban areas in Asia-Pacific cities including Shenzhen, Shanghai and Taipei. According to my primary research, Taiwanese and Chinese tourists account for over 75 percent of the total tourists. They almost all have a bachelor’s degree or master’s degree. The average monthly income of Hong Kong Millennial customers is $2,700, which is middle income in Hong Kong’s society. The average monthly income of the Chinese Millennial customers is between $1,000 and $2,500, which is middle income in Chinese society. However, according to my primary research, business travelers also love to go to bars for business purposes or to relax after stress work. They are usually over 45 years old and have incomes over $4,000 per month, which belongs to high-income group. Furthermore, they have highest consumer of alcohol among all age groups. Their single consumption is usually over $30. Psychographic: Millennial customers: Both Chinese Millennials and Hong Kong Millennials love using social media and shopping online. Chinese Millennials are the major customers of the future luxury market. They enjoy traveling around the world, partying with friends, going out to eat, and going to music festival. Most important of all, they love to share their life experiences on the social media platforms. In addition, Millennial customers are very health-conscious and pursue healthy lifestyles. They all work very hard and play very hard. They are positive, and enthusiastic and are more open-minded than their parents’ generation. Because they are exposed to Western culture at an early age, Chinese Millennials are not restricted by traditional Chinese culture. As a result, they are more willing to try new things and reward themselves. They are concerned about environmental and social issues. These issues will affect their consuming willingness. Furthermore, they are heavily-addicted to smartphones because smartphones are tools for them to connect to the world and receive information. They use all kinds of platforms to review information, products and shopping. They usually go to bar at least once a month in order to have a business purpose or catch up with their friends and their single consumption is between $16 and $30. thing is the highest quality in order to maintain their best condition.

Business Travelers: The most important psychographic factor for business traveler is that time is money. As a resultthey need to avoid wasting any time because any mistake can cause a business loss. The comfort and convenience are their prioritized factors.

As a result, business travelers need to save their energy as much as they can and be in the best

condition in order to seize the business opportunities. In the other word, during business travels, they want everything is the highest quality in order to maintain their best condition.

Persona:

-Millennial CustomerName: Shelly Lee Nationality: Hong Kong Age: 23 years old, single Job: Jewelry Designer Income: $2,300 per month Lifestyle Traits: Loves to travel, socialize with friends, go to bars for relaxing

-Business TravelerName: Jason Tsai Nationality: Taiwan Age: 55, Married Job: Bank manger, travels twice a month Education: Masterâ&#x20AC;&#x2122;s degree Income: $5,000 Lifestyle Traits: Has lots of business entertainments, enjoy high-quality drinks, health conscious

7.2 Introduction of The Gucci Bar

According to my primary and secondary re- Marketing strategies will be divided into product,

search, the bar industry has high potential in the place, price, service and placement to distinguish Hong Kong food industry and is popular among The Gucci Bar from the Hong Kong’s existing the Millennial customers. Instead of launching bars and help Gucci become a pioneering brand cafes like many fashion brands, Gucci will launch in the Chinese luxury market. The Gucci Bar will The Gucci Bar in Gucci Harbour City. The Gucci be located in the second floor of the Gucci CanBar will combine Italian cocktails with local cui- ton Road, which is the largest and has the highest sines to let customers experience both two different customer flow in Hong Kong. The Gucci Bar will food cultures. The Gucci Bar will collaborate with be a semi-open space and use glass to separate the Aqua Restaurant Group to use their expertise to bar and store. As for interior design, The Gucci Bar develop signature food and drinks for The Gucci uses the pink velvet wall and Gucci’s wallpaper to Bar. The Gucci Bar can increase the customer flow decorate the interior environment, which is based and change customers’ shopping experiences. The on the interior design of Gucci store. As for the main objectives of The Gucci Bar 1) are to increase music, The Gucci Bar will play lo-fi hip hop and brand awareness and 2) build brand awareness and jazz which can help customers relax which is simi2) build brand awareness among Chinese Millen- lar to music that plays in the lounge bar. nial customers, to bring additional profits to Gucci

Moreover, Dionysus is the major source of

and transform Gucci into a lifestyle brand. In order inspiration for Alessandro Michele and the most to achieve these goals, The Gucci Bar will use mar- important god in ancient Rome. Dionysus taught keting strategies and existing Gucci social media people how to plant vines, brew wine and enjoy platforms to reach their target population.

pleasure and liberation after drinking. 65

7.3 Products of The Gucci Bar 7.3.1 Cocktail

According to the primary and secondary research, Italian cocktails and Italian drinking culture

are both unfamiliar to the Chinese tourists and Hong Kong residents, which means that people may feel curious about this new concept. Moreover, Chinese Millennial customers love to try new things and food. In Italian culture, cocktails are as known as Aperitivo. For Italian, Aperitivo is usually between 7 pm and 9 pm. People can relax and de-stress their stress from work with a glass of Negorni. Aperitivo is a good way to refresh your mind and work up for an appetite for dinner. In order to let Chinese customers experience Aperitivo culture, The Gucci Bar will provide five iconic Aperitivo drinks including Prosecco, Negroni, Americano, Spritz and Amaretto Sour. According to my secondary research, sustainability is an important factor that affects Millenial consuming desire.

Furthermore, in order to respond to the trend of sustainability, The Gucci Bar will use several

strategies to reduce harm to the environment. Firstly, shipping is the largest sources of waste in the bar industry. Therefore, The Gucci Bar will increase the proportion of local ingredients to reduce their carbon footprint. Secondly, The Gucci Bar will use washable metal or bamboo tubes for straws. In accordance with the growth of health-conscious customers, The Gucci Bar will provide an assortment of non-alcoholic cocktails. The Gucci Bar will use fresh juice, tea, soda and cordials to help customers that don’t drink alcohol enjoy a social evening of drinking. The Gucci Bar will also use Seedlip as cocktail base for the non-alcoholic drinks. Seedlip is a non-alcoholic alternative alcoholic beverage with fresh a taste and no sugar.

Moreover, The Gucci Bar will provide a few signature drinks featuring with the names of Gucci’s

iconic products or designers’ names such as “Alessandro’s dream” in order to attract Millennial customers. As for The Gucci Bar’s signature drinks, The Gucci Bar will collaborate with Antonio Lai who specializes in molecular bartending. The signature drinks will re-decompose the local ingredients and combine with Italian liquors. The local ingredients will focus on the Hong Kong’s tea culture such as milk tea or lemon tea. Moreover, Gucci Garden is the core idea of Alessandro Michele. Therefore, flowers and plants play very important role in the latest Gucci collection, especially perfume. The Gucci Bar will also combine some floral ingredients with our signature drinks such as fig or lily.

7.3.2 Cocktail On Tap According to my primary research, the major problem with the Hong Kong Bar industry is the lack of the professional bartenders. As a result, The Gucci Bar will use the pre-batched cocktails instead of bartenders modulating cocktails on site. The Gucci Bar will use low-temperature refrigeration to maintain the quality of cocktails. Cocktails on tap rely on the same technology as beer and wine. With a tap, patched cocktails held in cold storage contain carbon dioxide or nitrogen. The gas pressure can simulate the bartendersâ&#x20AC;&#x2122; professional stirring, shaking and rolling techniques. The professional staffs of The Gucci Bar will give a detailed explanation of drinks for our customers and one professional bartender will be in charge of making batch cocktail. Furthermore, draft cocktails can help bars control the quality of their drinks because there are lots of factors that could change the tastes of the cocktails. The Gucci Bar can use these advantages to save customersâ&#x20AC;&#x2122; time and maximize their profits. Furthermore, cocktails on tap can provide customer with a sample testing before they ordering their drinks. This strategy can solve the long-term issues of cocktail drinks. 68

7.3.3 Dim Sum According to my primary and secondary research, dim sum is the most representative cuisine of the Hong Kong food culture. Furthermore, the survey of both Chinese tourists and Hong residents shows high interest in combining dim sum with cocktails. According to my primary research, the top seven dishes are shrimp dumpling, Shanghai dumpling, Siu Mai, fried sesame ball, steamed pork ribs, sponge cake and fried wings. In order to provide a visual and oral feast, The Gucci Bar will collaborate with the Aqua Restaurant Group to develop creative cuisines. The reason that The Gucci Bar chooses Aqua Restaurant Group is that Aqua Restaurant Group has already had the experience combing high-end dim sum with cocktails. Dim Sum library is a brand under Aqua Restaurant Group and offers Chinese cuisines with cocktail. As for the presentation of dim sum, The Gucci Bar’s dim sum will reflect classic and modern Gucci’s aesthetics. For instance, The Gucci bar can use the iconic “Double G” logo on the designs of dim sum in order to present a consistent aesthetic. As for the ingredients, Chinese customers have become more and more health-conscious. The Gucci Bar will use local and organic vegetables and meat with low-oil and low-salt cooking styles to provide customers with a healthy drinking and dining experience. Furthermore, The Gucci Bar will use seasonal ingredients to launch some season-limited products. For instance, Hong Kong people love to eat mangos during the summertime because they believe mangos can counteract the overwhelming heat. As a result, The Gucci Bar can use Hong Kong people’s eating habits for different seasons to develop a specific menu. Since, the afternoon is off-peak time for The Gucci Bar, the bar will provide Hong-Kong style desserts to attract customers. The desserts will be only available during the afternoon. Based on my surveys, soybean pudding is the most popular dessert. 69

7.3.4 Standing Bar Style According to my primary research, standing bars and restaurants are more and more developed in the Asiaâ&#x20AC;&#x2122;s mature cities. This culture originated from the Japan. This unique culture gradually developed in Japan where people need a narrow space to finish their food quickly while waiting for the train. Today, this culture combines different styles of diet to create a brand new food culture. Furthermore, Hong Kong has very unique sidewalk snack booth that provide street food. In response to this Hong Kong local culture, The Gucci Bar will use the standing bar style to present Hong Kong local culture in Gucciâ&#x20AC;&#x2122;s style. As for Hong Kong residents, this style can create a strong connection between customers and the brand. Due to the limited space of The Gucci Bar, the standing-bar style can provide the max capacity of customers. The standing-bar style can give customers the opportunities to interact with others and meet new friends. The Gucci Bar is an in-store bar inside of the existing store in Harbor City. The standing-bar style can accelerate the flow of the customers and increase customer traffic for both The Gucci Bar and the Gucci store.

7.3.5 Existing Gucci Products & The Gucci Bar’s Limited Products Gucci released their first home décor collection in 2017. The collection features cups, candles, incense platters, plates, chairs, cushions, wallpapers and panel screens. These furnishings use the Gucci’s familiar design motifs such as tiger, snakes and the Gucci Garden floral pattern. According to Gucci’s press release, “The idea is not to prescribe a particular decorative look, but to provide elements that allow for living space.” As a result, the Gucci Bar will be an ideal place to display this collection. As for the tableware of The Gucci Bar, The Gucci Bar will use this collection to connect with the existing Gucci’s aesthetic in order to attract customers to purchase the Gucci’s décor.

The Gucci Garden has a limited collection line, including handbags. The Gucci Bar will sell cock-

tail glasses as unique limited products. The design of the cocktail glass is based on the current Gucci aesthetic and Hong Kong local characteristics. The other product will target the business travelers who want enjoy a cocktail when they travel. The Gucci Bar traveling cocktail kit allows the business travelers to at least carry the essentials that are best reserved for mixing a few drinks. Furthermore, Chinese tourists love to buy gifts for friends or families when they travel. As a result, Gucci cocktail glasses can be the best option for the Chinese tourists.

7.3.5 Existing Gucci Products & The Gucci Bar’s Limited Products

Gucci released their first home décor collection in 2017. The collection features cups, candles,

incense platters, plates, chairs, cushions, wallpapers and panel screens. These furnishings use the Gucci’s familiar design motifs such as tiger, snakes and the Gucci Garden floral pattern. According to Gucci’s press release, “The idea is not to prescribe a particular decorative look, but to provide elements that 71

allow for living space.” As a result, the Gucci Bar will be an ideal place to display this collection. As for the tableware of The Gucci Bar, The Gucci Bar will use this collection to connect with the existing Gucci’s aesthetic in order to attract customers to purchase the Gucci’s décor.

The Gucci Garden has a limited collection line, including handbags. The Gucci Bar will sell cock-

7.4 Services of The Gucci Bar

7.4.1 Cocktail Pong In order to give customers’ a variety of drinking experience, The Gucci Bar will collaborate with Hong Kong’s technology company “Atalon Ventures” to provide a brand new cocktail pong machine. This company changes the traditional game of “Beer Pong” into electric games with more ways of playing. Beer Pong is a traditional game that was originated in the U.S. The rules are that the winner needs to throw the 72

ping pong ball into their opponent’s glasses. However, the brand new machine “BP connect” uses RFID to sense the ball and automatically give a score. With the LED lights and sounds, BP connect upgrades the beer pong game to the next level. The Gucci Bar will replace beer with our signature drinks. To design the look of The Gucci Bar’s BP connect machine, the bar will collaborate with Gucci Ghost, a Brooklyn based artist who paints his interpretation of the iconic Gucci logo. According to my secondary research, Hong Kong people suffer from a stressful working environment and barely have any social lives. As a result, the goal of Gucci’s cocktail pong is to create connections between our customers. Moreover, the highest score of the day can be rewarded with a The Gucci Bar’s package including a free drink, a free dim sum and a “The Gucci Bar” cocktail glass. 7.4.2 Work Shop

Gucci has been famous for its Italian craftsmanship for a century. A few years ago, Gucci launched

the “Artisan Corner” program to offer an up-close and personal look at the craftsmanship that went into Gucci’s leather good. As a result, The Gucci Bar will host a craftsmanship workshop in Hong Kong to create a unique experience. The Gucci Bar workshop will focus on Hong Kong local resident. Therefore, the workshop will be held in the afternoon on the last Friday of the month. Housewives can take a break and enjoy The Gucci Bar’s afternoon desserts with their friends. In recent years, Alessandro Michele loves to use embroideries on his designs and embroidery has become one of the most iconic designs in recent years. Although Gucci already has a customized embroidery service, the embroidery workshop will upgrade customers’ experiences to the next level. The Gucci Bar will hold an embroidery workshop to teach customers how to make personal embroidery by themselves. The Gucci Bar will invite embroidery artisans from Italy. In order to ensure the best teaching quality, attendance at the embroidery workshops will be by appointment only. As a result, The Gucci Bar is not only a cocktail bar but also a platform to deliver the brand’s message to our target customers. 7.4.3 Gucci Night According to my primary research, both Hong Kong and Chinese Millennials consider music as an important element of a bar’s atmosphere. As a result, The Gucci Bar will launch a party program where there will be two different parties per month. One party will be the live band show and the other one will invite DJs to play music. The Gucci Bar will not only collaborate with Hong Kong local bands or DJs but also invite some international musicians to perform. However, the Gucci Night will require an extra ticket to enter The Gucci Bar. Furthermore, the themes of Gucci Night will also change in response to different holidays such as Christmas or Halloween.

7.4.4 Private VIP Meeting Room

In order to target business travelers, there will be one private VIP room equipped with high-speed

internet, a projector and a large screen to give business travelers a comfortable and private space. However, this space will only be available by reservation. Furthermore, the private VIP room can also be an option for customers who need privacy such as movie stars or celebrities. However, the fees of private VIP room will be $150 per hour. Although the price is high, customers can have meetings with The Gucci Barâ&#x20AC;&#x2122;s signature drinks and dim sum as refreshments, which can possibly increase business opportunities. 7.4.5 Alipay & Wechat payment

In order to target Chinese customers, The Gucci Bar will have an option to process payments via

Alipay and Wechat, two major mobile payment platforms. In modern Chinese society, mobile payment has already become very popular payment method due to the ubiquitous smartphones. Mobile payments allow The Gucci Bar to process customer payments in one simple step and provide a simple, efficient and convenient shopping experience. Moreover, mobile payments can reduce the costs of receipt printing and respond to the goal of sustainability.

7.5 Price

In order to compete with existing bars, The Gucci Bar will not only provide multiple cocktails and

dim sum but also interesting activities to attract Millennial customers. According to my primary research, the spending range of The Gucci Bar should be between $16 and $30. As a result, the price of a glass of cocktail will be $16 and the price of one plate of dim sum will be between $10 and $14 depending on the ingredients. As for the price of Gucci Home décor, the prices are the same as at any other stores. However, The Gucci Bar’s limited cocktail glass will be $30 and a package of The Gucci Bar cocktail glass (including a cocktail) will be $40. The workshops and cocktail pong will be totally free for The Gucci Bar’s customers. As for Gucci’s party events, the ticket will be $30 including one drink. In order to target Millennial customers, the price range of The Gucci Bar will be more affordable. Furthermore, if customers have already shopped in the Gucci store, they can get 10 percent off for one drink in The Gucci Bar. Through these services and products, The Gucci Bar’s pricing strategy can increase the customer flow to the existing Gucci store and brand awareness among Millennial customers. The affordable prices can make a positive impression on our customers without diluting Gucci’s brand image. The goal of this pricing strategy is to attract more Millennial customers and build long-term profits.

7.4 Placement 7.6.1 Store Composition Plan & Interior Design

The Gucci Bar is located on the second floor of the Gucci Canton Road in Harbour City. The

business hours of The Gucci Bar will be from 10 am to 12 am but the retailing space will be close at 10 pm. On Gucci Night, The Gucci Bar will extend their business hours to 2 am. The size of The Gucci Bar is almost 460 square feet. The Gucci Bar is composed of two different areas, a bar area and a drinking area. Gucci’s three panel screens will divide these two areas. The Gucci Bar is a standing cocktail bar. As a result, the only furniture will be Gucci print metal folding tables for customers to place their drinks on. Furthermore, The Gucci Bar will be inside the Gucci Canton Road store and there will a glass wall that separates the bar from the store to let customers easily understand the location and what we are selling. As for the interior design, The Gucci Bar will follow the store design of Gucci Canton Road, using velvet and Gucci’s wallpaper on the walls. The main colors of The Gucci Bar will be the light pink and white. According to Alessandro Michele’s Maximalism and Renaissance style, The Gucci Bar will still use hand-printed animal or floral patterns to decorate the interior. The Gucci Bar is a semi-open space. Therefore, customers can choose to drink in our drink area or look around the retailing space with their drinks. However, they will need to give our drink to our staff or put your drinks on the tables when they want

want to touch or try any of Gucci’s products. As for lighting, The Gucci Bar will use lower illumination than the retailing space to help customers relax. Furthermore, in order to reflect Hong Kong cityscape, The Gucci Bar will use iconic neon signs to connect with the Hong Kong local culture. The Gucci Bar will collaborate with Hong Kong neon light artisans to build unique Gucci neon signs. Furthermore, the drinking area will also be an exhibition space that displays the works that Gucci collaborate with different artists. 7.6.2 Website & App Design of The Gucci Bar The Gucci Bar website will be an offshoot from the official Gucci website. In response to the Millennials internet addiction, the website and app will provide the latest information about The Gucci Bar and a reservation system for The Gucci Bar and the workshop. For instance, The Gucci Bar will launch news of the seasonal limited menu and the performers at Gucci Night on their website. Moreover, The Gucci Bar web page can reach their customers worldwide. In addition to improving Gucci’s brand image, the website can also encourage customers to visit The Gucci Bar in Hong Kong. Furthermore, the website and app will provide a customer feedback system by which customers can provide their suggestions to make The Gucci Bar better. The website and app will also include The Gucci Bar’s Facebook, Instagram, Youtube and Weibo so customers can check the latest posts and videos.

7.4 Promotion Strategy 7.7.1 Introduction:

The Gucci Barâ&#x20AC;&#x2122;s promotion strategy will

focus on two major customers of The Gucci Bar, Chinese tourists and Hong Kong residents. The promotion strategies will include both physical and online platforms. Each platform will target specific customers and try to maximize the effects of the promotion strategies. Furthermore, The Gucci Bar will use word-of-mouth through social media influencers to reach the potential customers. The final goal of The Gucci Barâ&#x20AC;&#x2122;s promotion strategy is to increase the brand awareness. 79

7.7.2 Department Store Promotion

For this strategy, The Gucci Bar will collaborate with Harbour City. Harbour City is the Hong

Kongâ&#x20AC;&#x2122;s largest shopping mall and luxury brands concentration. Gucci Store Canton Road in the Harbour City is also a flagship store of Gucci. Harbour City will use advertising LED screens and inside advertising posters to attract customers to visit The Gucci Bar. Therefore, people can see The Gucci Barâ&#x20AC;&#x2122;s advertising campaigns when they enter Harbour City. Moreover, Harbour City can use their other promotion channels such as social media platforms, websites, and catalogs. These marketing tools can help The Gucci Bar increase brand awareness among Harbour City existing customers.

The promotion strategy can not only to increase the revenue of The Gucci Bar but also the cus-

tomer flow for Harbour City. When more customers visit The Gucci Bar, customers will be likely to spend extra money on other stores or restaurants in the Harbour City

7.7.3 Airport Promotion According to my primary and secondary research, the tourism industry plays a very important role in Hong Kong economy. The Millennial Chinese tourists are one of the major target customers for The Gucci Bar. Most Chinese tourists visit Hong Kong by plane. As a result, The Gucci Bar will use the light-box advertisements in the arrival lobby of the Hong Kong airport to attract tourist customers. The Hong Kong airport is some distance outside Kowloon and Hong Kong Island. The Hong Kong Airport Express, bus and taxi are the three major forms of transportation between the airport and Hong Kong city. In order to target both Chinese tourists and business travelers, The Gucci Bar will display posters and commercial videos (where screens are available) in transportation. As for the content of The Gucci Bar’s light-box advertisements and posters, all these advertisements will include QR codes that tourists can scan connect to The Gucci Bar’s website pages. As a result, tourists can receive the latest information from The Gucci Bar’s website.

7.7.4 Reward Program

Compared with other promotion strategies, the reward program will focus more on Hong Kong

local residents and increase the brand loyalty of The Gucci Bar. Both local and tourist customers can earn one free Gucci signature cocktail after they consuming over $30 ten times. After consuming over $30 twenty times, they can earn a free The Gucci Bar limited cocktail glass. If customers use mobile payment, expenses records will directly show on their profile page on The Gucci Bar’s app. When customers win a free cocktail, they will be more willing to share their prizes on the social network. It will help attract target customers for The Gucci Bar. Word-of-mouth is the final goal that the reward program wants to achieve. The reward program will improve The Gucci Bar’s brand awareness and build long-term brand loyalty. 7.7.5 Digital Media

According to my secondary research, Millennial customers have heavy addictions to social media.

They depend on social media to the information and share their life experiences. Moreover, Millennial customers rely on restaurant review websites to decide where to eat or drink. The Gucci Bar will create their own Facebook, Instagram, and Youtube accounts as well as website page under the existing Gucci website. Moreover, The Gucci Bar will also use Wechat and Weibo in order to reach Chinese Millennial customers. The Gucci Bar’s digital marketing strategy will be based on the existing Gucci digital strategy, resulting in more public platforms where customers can engage with the brand and collaborate with social media influencers. The Gucci Bar will combine fashion, art and drinking culture in their digital strategy. As a result, the social media platform will not only provide the latest information but also share customers’ photos or videos in The Gucci Bar.

Each social media platform will target different groups. Facebook, Youtube and Instagram will

focus on Hong Kong residents and global users. As for Facebook, The Gucci Bar will collaborate with Hong Kong illustrators to create artworks to catch customers’ eyes. As for posting times, The Gucci Bar will launch their posts after 6 pm in order to reach bar consumers at the most relevant time. Moreover, The Gucci Bar’s Facebook campaigns will also post after 6 pm and only be visible to Hong Kong Facebook users. The content of the Facebook campaigns, will include information about The Gucci Bar and transportation to there. The Gucci Bar will also use Facebook’s live service to live broadcast “Gucci Night” musical performances. As for Youtube, the goal is to use videos to create a story-telling content for The Gucci Bar. The Gucci Bar will not use the video to introduce what The Gucci Bar looks like but to record customers’ drinking and enjoyment experience. The Gucci Bar will also record “Gucci Night” musical performances and upload them on The Gucci Bar’s Youtube account. Videos will also be put on The Gucci Bar website page and share the video links to the Facebook or Instagram. According to the Kantar TNS survey, Hong Kong people rank second in South East Asia among Instagram users. As for Instagram marketing strategy, the posts will follow the same pattern as Facebook’s. However, The Gucci 82

Bar will focus on creating their Instagram Story. The Gucci Bar’s target customers can receive the latest information and engaging with each other via interactive elements such as voting. Furthermore, The Gucci Bar can use #hashtags to find potential customers and show ongoing activity at the bar. Furthermore, The Gucci Bar will invite Chinese or Hong Kong Instagram influencers to join “Gucci Night” and a prelaunched party, using their a large number of followers to increase The Gucci Bar’s awareness.

In order to capture the attention of Chinese Millennials, The Gucci Bar will also use WeChat and

Weibo. The main target customers of The Gucci Bar are Chinese Millennial tourists and Hong Kong Millennials. As a result, WeChat and Weibo marketing are especially important. Weibo is one of the most popular social media sites in China, with more than 392 million monthly active users. With huge number of users, Weibo can easily help The Gucci Bar increase brand awareness. Based on the existing Gucci marketing strategies in China, The Gucci Bar will collaborate with Meitu to launch The Gucci Bar AR expression package. With this package, customers can share their selfies with Gucci AR expressions with their friends and indirectly increase the awareness of The Gucci Bar. Compared to Weibo, WeChat is more popular among Hong Kong residents. The Gucci Bar will have a public account on WeChat. The Gucci Bar can share the latest information with their followers. Moreover, if customers have any question, they can communicate with The Gucci Bar’s customer service through WeChat. The goals of these two social media platforms are to increase word-of-mouth through users’ relationships and to increase overall brand awareness.

Although OpenRice is not a social media platform, OpenRice is the most popular food information sharing app in Hong Kong. As a result, OpenRice will target Hong Kong local customers. OpenRice includes the latest restaurant information, review and rates. The Gucci Bar will collaborate with OpenRice to provide a line-up system, which helps The Gucci Bar manage their line-up customers. Moreover, The Gucci Bar will use search engine marketing to increase The Gucci Bar exposure. OpenRice will use content-based promotion strategy that help The Gucci Bar highlight their brand image. Customers also have higher trust in the promotion strategies. As a result, OpenRice can help The Gucci Bar increase its brand awareness among Hong Kong local customer. 7.7.6 Print Magazine

As for print media, The Gucci Bar will focus on travel and fashion magazines including Trav-

el+Leisure, China Tourism, Food and Wine, Conde Nast Traveler, Monocle and Business Traveler. Instead of running campaigns in the magazines, The Gucci Bar will invite the magazine reporters to make in-depth reports about the bar to increase tourists and business travelsâ&#x20AC;&#x2122; interests. The Gucci Bar will also provide a location for fashion magazine shoots. In addition to print media, The Gucci Bar will also invite online magazine reporters to introduce The Gucci Bar.

7.7.8 Launch Party

In order to increase brand awareness of The

Gucci Bar, The Gucci Bar will hold a launch party in the Gucci Canton Road store, inviting media representatives, magazine editors, Hong Kong tourism board representatives, social media influencers, Chinese celebrities and Gucci VIP customers to experience The Gucci Barâ&#x20AC;&#x2122;s cocktails and dim sum. Through the word-of-mouth of social media influencers and different media platforms, The Gucci Bar can rapidly increase brand awareness. Furthermore, a launch party can combine different marketing strategies to maximize the effectiveness of this promotional strategy. For instance, before the launch party, The Gucci Bar can release some promotional videos to arouse customersâ&#x20AC;&#x2122; interest.

7.7.9 Special Events Hong Kong International Wine & Spirits Fair

Attending the Wine & Spirits Fair can help The Gucci Bar increase brand awareness in the Hong

Kong Bar industry. Furthermore, The Gucci Bar can meet the wine and spirits suppliers and understand new trends in bar industry. This is also a great opportunity to introduce The Gucci Bar to alcohol lovers in Hong Kong. Clockenflap Music Festival

Clockenflap is the largest outdoor music festival and art festival, attracting many Hong Kong and

Chinese Millennials every year. Alcoholic drinks are one of the most important parts of the musical festival. In order to increase awareness of The Gucci Bar among Millennial customers, The Gucci Bar will be the sponsor company for the Clockenflap Music Festival. Through this music festival, The Gucci Bar can increase its brand awareness among the younger generation. Free Cocktail Sampling

In order to increase the sales during off-peak hours, The Gucci Bar staff will provide free cocktails

with small cup. The Gucci Bar still gives sample testing to the customers in the Gucci store and customers who wait for fitting rooms and checkout. Moreover, the free sampling can let customers know there is a cocktail bar inside the store. As a result, through the free cocktail sampling, The Gucci Bar can increase the purchasing desire for the potential customers.

7.8 Long-term Management Strategy

Firstly, staff members are the most important assets for The Gucci Bar. In addition to an

employee discount for The Gucci Barâ&#x20AC;&#x2122;s products, The Gucci Bar will hold a monthly workshop where staff members visit other bars or restaurants. As a result, The Gucci Barâ&#x20AC;&#x2122;s staff can understand the latest trends in food and drink. Moreover, The Gucci Bar will use the time before business hours for staff to review issues and exchange ideas in order to provide the best customer service. The Gucci Bar will also hold staff trips and dinners in order to strengthen employee relationships. The reason is that The Gucci Bar is a happy and relaxing place, so our staffs need to have a pleasant working environment. This helps them keep a positive attitude and communicate that attitude to customers.

Secondly, Gucci has 294 stores in the Asia. Testing the bar in the Hong Kong market will inform

Gucci about the greater China market as well. If The Gucci Bar shows considerable revenue and reaches its desired goals, Gucci can open The Gucci Bar in other Gucci stores in mainland China to increase the customer flow and strengthen brand loyalty. Moreover, The Gucci Bar can use different local food cultures to build their specific menus. By building diversity, The Gucci Bar can both attract the local Chinese and Western tourists.

Thirdly, after Gucci launches the new The Gucci Bar in other cities, The Gucci Bar can provide

city-limited products to attract Gucci existing customers to purchase. For instance, The Gucci Bar can release the limited cocktail glass in Hong Kong and The Gucci Bar in Shanghai can release a region-limited blue-and-white porcelain cup.

In the end, the final goal of The Gucci Bar is to expand all their business strategies. The Gucci Bar

will not necessarily be limited to the existing Gucci stores. The Gucci Bar can collaborate with hotels or cruises in order to maximize brand awareness and profits. Moreover, The Gucci Bar will promote and sponsor a variety of activities related to cocktail culture.

7.9 Launch Plan

The Gucci Bar Promotion Calender Marketing Tools

Apr

May

Pre Launch June

July

August

Launch September

October

November

Post Launch December January

February

March

Department Store Promotion Aiport Promotion Reward Program Digital Media Print Magazine Launch Party Special Event: Clockenflap Music Festival Hong Kong Internaitonal Wine & Spirits Fair Free Cocktail Testing

7.10 Financial Plan Product Sales Italian Cocktail Monday Tuesday Wednesday Thursday Friday Saturday Sunday Total Sales Average price of Italain cocktail Total Italian cocktail revenue per week Total Italian cocktail revenue per year

Covers

Dim Sum Monday Tuesday Wednesday Thursday Friday Saturday Sunday Total Sales Average dim sum price Total dim sum revenue per week Total dim sum revenue per year

Covers

Sales 250 100 200 100 300 400 350 1700 $16 $27,200

$1,414,400

100 110 115 120 130 200 180 955 $14 $13,370

The Gucci Bar limited cocktail glass Sales per week x Single price Unit AUR Sales Sales 52 week 75.00 $ 125.00 $ 9,375.00 $ 487,500.00 Total limited cocktail glass revenue per year $ 487,500.00

10000 $1,540 $1,610 $1,680 $1,820 $2,800 $2,520 $13,370

$ 695,240.00

Covers

Sales 50 70 100 50 70 110 60 510 $13 $6,630

$2,000 $3,000 $3,200 $2,000 $4,000 $6,000 $3,000 $23,200 $23,200 1206400

$ 205,400.00

The Gucci Bar limited cocktail glass Sales per week x Single price Unit AUR Sales Sales 52 week 75.00 $ 125.00 $ 9,375.00 $ 487,500.00 Total limited cocktail glass revenue per year $ 487,500.00 The Gucci Bar limited cocktail travel kit Sales per week x Single price Unit AUR Sales 8 $250 Total limited travel kit revenue per year

$2,000

The Gucci NightÂ Cover per week x Ticket price Total Gucci Night revenue per year (24 events) The Gucci Bar VIP room per week Total The Gucci Bar VIP room revenue per year

$650 $910 $1,300 $650 $910 $1,430 $780 $6,630

$ 344,760.0

Total afternoon dessert revenue per year

Sales 100 150 160 100 200 300 150 1160 $20

Covers

Gucci Signature Cocktail Monday Afternoon Dessert Covers Sales Tuesday Monday 50 $500 Wednesday Tuesday 50 $500 Thursday Wednesday 60 $600 Friday Thursday 40 $400 Saturday Friday 60 $600 Sunday Saturday 70 $700 SundayTotal Sales 65 $650 Average price of Gucci signature cocktail 395 Total Sales $3,950 Total Gucci signature cocktail revenue per week Averge dessert price $10 Total Gucci signature cocktail revenue per$3,950 year Total dessert revenue

Sales

Gucci Signature Cocktail Monday Tuesday Wednesday Thursday Friday Saturday Sunday Total Sales Average price of Gucci signature cocktail Total Gucci signature cocktail revenue per week Total Gucci signature cocktail revenue per year

The Gucci Bar limited cocktail travel kit

Non-Alcoholic Cocktail Monday Tuesday Wednesday Thursday Friday Saturday Sunday Total Sales Average price of non-alcoholic cocktail Total non-alcoholic cocktail revenue per week Total non-alcoholic revenue per yearÂ

$4,000 $1,600 $3,200 $1,600 $4,800 $6,400 $5,600 $27,200

Sales 52 week $104,000 $104,000

Sales $3,000 $72,000 $1,200 $62,400

Covers

Sales 100 150 160 100 200 300 150 1160 $20

$2,000 $3,000 $3,200 $2,000 $4,000 $6,000 $3,000 $23,200 $23,200 1206400

Total revenues

Total revenue of The Gucci Bar per year Total Gucci Bar VIP room revenue per year Total Italian cocktail revenue per year Total non-alcoholic revenue per year Total Gucci signature cocktail revenue per year Total dim sum revenue per year Total afternoon dessert revenue per year Total Gucci Night revenue per year Total limited cocktail glass revenue per year Total limited travel kit revenue per year The Gucci Bar limited cocktail travel kit

$ $ $ $ $ $ $ $ $ $

62,400.0 1,414,400.0 344,760.0 1,206,400.0 695,240.0 205,400.0 72,000.0 487,500.0 104,300.0 4,592,400.0

Cost of Goods Cost of goods/week Retail Price Cost per unit Sales Italian cocktail $16 $3.20 Non-alcoholic cocktail $13 $2.60 Gucci signature cocktail $20 $4 Dim sum $14 $2.80 Afternoon dessert $10 $2 Gucci cocktail glass $125 $20 Gucci travel kit $250 $30 Total costs/per week Gucci Night cost/per time $2,000 24 Total costs per year

Total costs 1700 $5,440.00 510 $1,326.00 1160 $4,640 955 $2,674.00 395 $790 75 $1,500 8 $240 $16,610.00 $48,000 $863,720.00

Expense Expense Ambience and decorations Human Resource Glassware Tableware Operating expenses Other expenses Kithchen stuffs Promotion Plan Total percentage of revenue Total expense

Percentage of The Gucci Bar revenue 3% 15% 5% 4% 2.50% 5% 3% 10% 47.50% 91

Cost 137772 688860 229620 183696 114810 229620 137772 459240 2181390 2181390

Budget of Promotion Plan

Promotion Plan Department store promotion Airport promotion Digital Strategy Print Magazine Launch party Special events Free sampling Total cost (10% of The Gucci Bar revenue)

cost

percentage 22962 5% 45924 10% 183696 30% 114810 25% 20665.8 14.50% 68886 15% 2296.2 0.50% 459240 100%

Profit & Loss

Profit and Loss Net Sales

Sales

Percentage

4592400

100%

863720

18.81%

Margin

3728680

81.19%

Expenxe

2181390

47.50%

Profit

1547290

33.69%

Costs of goods

PART 8.

Conclusion

8.1 Conclusion The Gucci Bar is going to provide a brand cocktail culture combined with Hong Kong local food culture. Through collaboration with Aqua Restaurant Group and Hong Kong local bartenders, The Gucci Bar will give customers an unforgettable and unprecedented drinking experience. The goals of The Gucci Bar are to increase brand awareness and strengthen brand loyalty for Gucci. In addition, Gucci can use The Gucci Bar to improve customers’ consuming experiences and increase the customer flow for the existing Gucci store.

Based on my research, Italian cocktails are not familiar to Chinese customers and combining

cocktails with dim sum is very rare in the Hong Kong bar industry. With additional services such as Gucci Night, The Gucci Bar aims to become the most popular cocktail bar among the Chinese Millennials in Hong Kong. In order to achieve this goal, The Gucci Bar will utilize both physical and digital media to attract target customers. As for social media platforms, The Gucci Bar will invite social media influencers and share customers’ posts on The Gucci Bar’s social media platforms to increase customer awareness by word-of-mouth.

With the growth of Chinese tourists, The Gucci Bar can not only attract the existing Gucci cus-

tomers but also potential customers who want to enjoy a special drinking experience. Moreover, The Gucci Bar will be designed based on new Gucci aesthetic to match the existing store style. Service, Quality and Joy are three important elements of The Gucci Bar. With successful business and marketing strategies, The Gucci Bar can help Gucci increase brand awareness and strengthen brand loyalty among both Chinese and Hong Kong Millennials. The future strategy of The Gucci Bar is to expand its bars in other Asia Pacific cities in order to maximize the brand awareness and profits of The Gucci Bar.

References & Appendix

References “Hong Kong Food Industry.”Invest Hk Inc.,2017,http://www.investhk.gov.hk/zh-hk/files/2017/10/2017.09food-service-tc.pdf Accessed 31 Mar. 2018. “The Best Cocktail in Hong King.” Douglas Parkes, 2018, https://www.timeout.com/hong-kong/barsand-pubs/best-cocktails-in-hong-kong-and-where-to-find-them Accessed 30 Mar.2018. “Why Fashion Retailers Are Staging Food Experiences.” Suzanne Bearne,2015, https://www.businessoffashion.com/articles/intelligence/why-fashion-retailers-are-staging-food-experiences

Accessed

Mar.2018. “How Hong Kong drinkers are turning to premium wines, halfway between simple and super-expensive bottles.” Debra Melburg, 2017, http://www.scmp.com/lifestyle/food-drink/article/2076675/how-hongkong Accessed 1 Apr.2018. “Visitor Arrivals.” Hong Kong Tourism Board, 2017, http://www.discoverhongkong.com/tc/about-hktb/ news/visitor-arrival.jsp Accessed 1 Apr.2018. “Cocktail Culture : Hong Kong’s vibrant cocktail scene.” Jeudi, 2016, https://www.association-france-hongkong.org/cocktail-culture-hong-kongs-vibrant-cocktail-scene/ Accssed 2 Apr. 2018 “Hong Kong largest chained bar.” KKnews, 2017, https://kknews.cc/finance/re6jl34.html Accessed 2 Apr 2018 “Jerry Thomas,125 years later.” David Wondrich, 2010, https://www.liquor.com/articles/jerry-thomas125-years-later/#gs.9=1IgEg Accessed 3 Apr. 2018. “ARMANI/PRIVE- the sophisticated glamour of Armani comes to exclusive lounge club & rooftop terrace in Hong Kong.” Asia Bars and Restaurant, 2012, http://www.asia-bars.com/2012/03/armaniprivethe-sophisticated-glamour-of-armani-comes-to-exclusive-lounge-club-rooftop-terrace-in-hong-kong/ Accessed 3 Apr.2018. “Breakdown of the cafe and bar market in China.” Statistic, 2018, https://www.statista.com/statistics/429956/breakdown-cafe-bar-market-china-by-type/ Accessed 4 Apr.2018 “Alcohol Consumption.” Centre for Health Protection of the Hong Kong, 2017, https://www.chp.gov.hk/ en/healthtopics/content/25/8798.html Accessed 4 Apr.2018. “China’s young shopper breathe new life into luxury market. Adam Jourdan, 2018, https://www.reuters. com/article/us-china-luxury/chinas-young-shoppers-breathe-new-life-into-luxury-market-idUSKBN1FK0YT Accessed 4 Apr.2018. “Alcohol Consumption Per Capita in Hong Kong.” Department of Health in Hong Kong, 2017, https:// www.change4health.gov.hk/en/alcohol_aware/figures/alcohol_consumption/index.html Accessed 5 Apr. 2018. 96

“Consumer Trend in Hong Kong.” Canada Government, 2011, http://publications.gc.ca/collections/collection_2011/agr/A74-1-12-2011-eng.pdf Accessed 5 Apr.2018. “Hong Kong nightlife: A beginner guide.” Adam White, 2018, http://www.scmp.com/lifestyle/food-drink/ article/2134261/hong-kong-nightlife-beginners-guide-16-best-bars-clubs-and-pubs Accesed 5 Apr.2018. “The 15 Best Places for Cocktails in Hong Kong.” Foursquare Lists, 2018, https://foursquare.com/ top-places/hong-kong/best-places-cocktails Accessed 6 Apr, 2018 “Gucci’s Cracked The Luxury Code With Millennials.” Pamela. N Danziger, 2017, https://www.forbes. com/sites/pamdanziger/2017/11/16/guccis-cracked-the-luxury-code-with-millennials-thanks-to-itsdream-team-of-bizzarri-and-michele/#f317a2315239 Accessed 6 Apr.2018. “Passion for food: The Draft Land.” Editors: Good Eat, 2017, https://books.google.com/books?id=3WFSDwAAQBAJ&lpg=PA45&dq=the%20draft%20land%20%E5%8F%B0%E5%8C%97&hl=zh-TW&pg=PA45#v=onepage&q=the%20draft%20land%20%E5%8F%B0%E5%8C%97&f=false Accessed 6. Apr.2018. “Background Gucci.” Vogue Paris, 2015,https://en.vogue.fr/vogue-list/thevoguelist/gucci-/976 Accessed 7 Apr.2018. “Gucci success shows the value of multi brands.” Financial Times, 2017,https://www.ft.com/content/ 6364da42-1bb1-11e8-aaca-4574d7dabfb6 Accessed 7 Apr.2018. “No garnish, no bullshit-Angus Zou.” Drink Magazine, 2018, http://www.drinkmagazine.asia/2018/03/13/ taipei-best-new-bars/ Accessed 7 Apr.2018. “Gucci’s Surge and the Power of a Responsive Supply Chian.” Business of Fashion, 2017, https://www. businessoffashion.com/articles/this-week-in-fashion/guccis-surge-and-the-power-of-a-responsive-supply-chain Accessed 7 Apr.2018. “Gucci’s Exponential Growth Spurt To Continues.” Dani Mau, 2017, https://fashionista.com/2017/10/ gucci-revenue-sales-growth-q3-2017 Accessed 8.Apr.2018 “Engaging a new generation.” LuxuryHighlights, 2018,http://www.luxury-highlights.com/en/article/engaging-a-new-generation/ Accessed 9 Apr.2018. “Gucci, logos and woke fashion were among the most-searched designer.” Maria Bobila, 2017, https:// fashionista.com/2017/11/most-searched-popular-fashion-designers-trends-2017 Accessed 10 Apr.2018. “Gucci is going to gangbusters online, leaving louis Vuitton in dust, 2018, https://www.forbes.com/ sites/pamdanziger/2018/01/25/gucci-is-going-gangbusters-online-leaving-louis-vuitton-in-the-dust/#561f37ac1912 Accessed 10 Apr.2018. 97

“Bar Pacific.” Hong Kong Brand Development Council, 2018, http://www.hkbrand.org/tc/event/2/page/3/ brand/502?activePage=1&tab=110 Accessed 11 Apr.2018. “Quinary-innovative cocktail bar in Hong Kong.”Asia Bars & Restaurant, 2013, http://www.asia-bars. com/2013/04/quinary-innovative-cocktail-bar-in-hong-kong/ Accessed 11 Apr.2018. “Dim Sum Library.” Andrea Lo, 2017, https://www.theloophk.com/hong-kong-restaurant/dim-sum-library/ Accessed 12 Apr.2018. “Why fashion retailers are staging food experiences.” Business of Fashion, 2015, https://www.businessoffashion.com/articles/intelligence/why-fashion-retailers-are-staging-food-experiences

Accessed

Apr.2018. World Class Panel: Four Drink Trends Come in 2018.” Drinks World, 2017, http://drinks.world/2017/09/ world-class-panel-four-drink-trends-come-2018/ Accessed 12 Apr.2018. “Global Bar Market.” Chyxx, 2017, http://www.chyxx.com/industry/201705/525604.html Accessed 13 Apr.2018. “Annual Work Program.” Hong Kong legislative yuan, 2017, https://www.legco.gov.hk/yr16-17/chinese/ panels/edev/papers/edev20170227cb4-570-3-c.pdf Accessed 13 Apr.2018. Griffiths, S. Lau, J.T.F., Chow, J.K.W., Lee, S.S., Kan, P. Y.M.Y. and Lee, S. (2006). Alcohol use among entrants to a Hong Kong university. Alcohol and Alcoholism, 41 (5), 560-565. “Millennial Luxury Consumption Habit.” Beautimode, 2017, https://www.beautimode.com/article/content/83603 Accessed 12 Apr.2018. “Alcohol Attitudes, Consumption, and Trends among Millennials.” Collage Group, n.d., http://www. collagegroup.com/2018/01/08/millennials-alcohol/ Accessed 13 Apr.2018. “Cocktail trend by millennial bartenders.” Prem Neshvin, 2017, cocktail-trends-millennialls-2017world-class-bartender-of-the-year Accessed 14 Apr.2018. “Ozone” Timeout Hong Kong, 2017, https://www.timeout.com.hk/hong-kong/hk//ozone Accessed 15 Apr.2018. “Will Hong Kong’s problem with long working hours.” Yupina Ng, 2018, http://www.scmp.com/news/ hong-kong/politics/article/2136552/will-hong-kongs-problem-long-working-hours-ever-come-end

Ac-

cessed 16 Apr.2018. “Gucci is launching a decor line.” Madeleine Luckel, 2017, https://www.vogue.com/article/gucci-launching-home-decor-see-the-collection Accessed 16 Apr.2018. “Why Chinese consumers opt for luxury goods over travel experiences.” Amrita Banta, 2017, https:// www.luxurysociety.com/en/articles/2017/11/do-consumers-prefer-luxury-goods-or-travel-experiences/ Accessed 17 Apr.2018.

“As one in six Hong Kong people suffers from mental illness, Dr Lucy Lord talks about how the city can change its outlook.” Louise Moon, 2017, http://www.scmp.com/news/hong-kong/health-environment/article/2119364/one-six-hong-kong-people-suffers-mental-illness-dr Accessed 20 Apr.2018. “The Low Abv movement.” Punch staff, 2018, https://punchdrink.com/articles/low-abv-cocktail-recipes-movement-amongst-bartenders-consumers/ Accessed 20 Apr.2018. “The BiggestTrend in Cocktail.”Elva Ramirez,2018,https://www.forbes.com/sites/elvaramirez/2018/03/31/ the-biggest-trend-in-cocktails-non-alcoholic-drinks/#2dac80fc2b9d Accessed 21 Apr.2018. “There is no Gucci bubble.” Hilary Milnes, 2018, Gucci long term strategyhttp://db.glossy.co/evolution-of-luxury/theres-no-gucci-bubble-how-kering-plans-is-maintaining-guccis-growth Accessed 21 Apr.2018. “Gucci’s Turnaround Strategy to One Strong Consistent Luxury Global Story.” Fashionbi, 2014, https:// fashionbi.com/insights/marketing-analysis/gucci-s-turnaround-strategy-to-one-strong-consistent-luxury-global-story. Accessed 23 Apr.2018. “Why Brands shouldn’t treat the Hong Kong and Mainland Market the same.” Ruonan Zheng, 2017, https://jingdaily.com/hong-kong-and-mainland-market-differences/ Accessed 21 Apr.2018 “Brand cafes: less about coffee or income, more about the selfie.” Yu Yi fan, 2017, http://www.scmp. com/business/companies/article/2099727/brand-cafes-less-about-coffee-or-income-more-about-selfie Accessed 22 Apr.2018. “How to use prizes and rewards in successful promotion. Shortstack inc, 2016, https://www.shortstack. com/blog/how-to-use-prizes-and-rewards-in-successful-promotions-guide/ Accessed 24 Apr.2018.

Appendix

100

101

102

103

104

105

106