While the number of pubs and pub visits are in decline, profits in the sector are rising, with an estimated 2% increase in profits, totalling just under £23.5bn in 2016. People are visiting pubs less often but spending more when they do. This has favoured pubs focusing on the experience of going out, such as Marston’s. It promotes the uniqueness of its individual breweries and has seen profits increase 9.7%, according to reports.
With rising inflation and increased living costs, customers can opt to drink at home or at establishments offering lower prices, such as JD Wetherspoon. This means that consumers are either trading up in terms of the drinks they are buying or trading down in terms of price, leaving Greene King struggling in the middle trying to please both segments.
By plotting Greene King pubs on the Purchase Quadrant, we can understand the main reason why people are visiting them now, and why they could be visited in the future.
There are four dominant modes of behaviour that influence how we shop and what we buy; habitual shopping, copying someone else’s shopping behaviour, following expert opinion or undertaking considered research. These modes make up the four quadrants.
These modes of shopping are dependent on four factors: whether we are thinking independently, being influenced socially, thinking fast and shopping instinctively or thinking slow and deliberating. These four factors make up the axis on the Purchase Quadrant.
Greene King pubs are sitting in the top right hand corner of the quadrant, being a social choice. In the past, many have seen the pub as an integral part of their lives; a place where friends and family have met for celebrations, weekend lunches, or after a long day at work.
As the central role of the traditional pub in people’s social lives has declined, so has the relevance of the Greene King brand. Greene King needs to shift perceptions of the role of its pubs to get people visiting them again.
Where should Greene King be in the future?
Greene King’s opportunity lies in moving down to the bottom right quadrant and reclaim authority from craft brewing, which has grown the number of breweries in the UK to over 2,000 for the first time since the 1930s and enjoyed a 23% growth in sales in 2016.
Drawing on its 200-year, successful history, Greene King can establish itself as the authority in the world of brewing. This will help instil a sense of trust for consumers, leaving them certain that going to a Greene King pub will provide a superior, authentic drinking experience. Additionally, with major brands, such as JD Wetherspoon, dominating the budget pub market, Greene King’s best option is to compete on knowledge rather than price.
How does Greene King become an authority in the pub world?
Greene King can re-establish itself as the obvious choice for pubgoers who appreciate what and where they drink by emphasising not only their heritage, but also the skill and craft that goes into brewing its beers.
Having a long history in the brewing trade is a valuable asset that Greene King is currently using to promote its brand. Yet on its own, this messaging is not sufficient to gain consumers’ trust. This is evident from Greene King’s recent struggles.
An alternative strategy is to promote the brand’s heritage through its craft and achievements, bringing out tangible factors, such as the provenance and ingredients of its own beers, that have contributed to its survival as a brand for 200 years. This could also involve the recruitment of a new generation of beer enthusiasts to carry Greene King’s history into the future and make the brand relevant to the next generation of beer drinkers.
Additionally, research on consumer behaviour has demonstrated that products in limited quantity tend to entice people. Using its knowledge, Greene King could branch out of its standard repertoire of beers to introduce limited editions that will demonstrate its skill and dedication to continuously improve the craft, while encouraging frequent revisits to Greene King pubs to experience and sample new varieties of beer.
Greene King can re-establish itself as the pub of choice by promoting its craft honed throughout the past 200 years. With an increasing number of pub patrons opting for higher-quality drinks at a higher price, Greene King’s heritage and experience can provide it with the point of difference needed to distinguish itself from competitors without having to compete on price.
Dr Björn Persson is Research Associate at Durham University Business School. KHWS is collaborating with Dr Persson and Durham University Business School to study consumer behaviour and decision-making, to establish a more scientific approach in creating effective marketing solutions.