Baa Bar Limited - A Case Study

Baa Bar Limited was established in 1991 and has now become a leading bar and club chain in the North-West of England. It has a total of seven bars spanning Liverpool, Manchester and Wigan. It began with the co-owners of a property development company called Urban Splash – Tom Bloxham (Baa Bar Ltd Chairman) and Jonathan Falkingham (Director of Baa Bar Ltd) investing in an ‘underdeveloped and economically deprived area of Liverpool City Centre’. They bought a derelict warehouse off Concert Square on Fleet Street. Originally it was a bar for friends and family to frequent and was not intended to become the enterprise that it is today.

However the property tycoons began to develop the area around the bar that is at the centre of their success. Concert Square was developed by Urban Splash by regenerating the buildings in the area, so they became habitable venues. The leaseholds were then sold to various bar chains including Walkabout, Office and the Wetherspoons’ chain (Lloyd’s Bar). This allowed the area to become a bustling, multicultural area for people looking for late night venues where they can enjoy a party or a drink. This increased the custom base that Baa Bar already had as people wanted as much choice as possible and due to the volume of people that live in Liverpool there were simply not enough venues for the amount of people. After its initial success, they opened Modo on Concert Square in 1997, which now generates the largest turnover for Baa Bar Limited and is also a RIBA Design Award winner. Sixteen years on, they have gone on to open a further three Baa Bars, two in Manchester and one in Wigan, also Bumper (Liverpool) and The Ox Noble (Manchester). A plan of 11 further sites by 2009 is said to be in full flow.

However, due to the close proximity of their main two bars, they had to differ their themes as Modo did not want to be in direct competition with Baa Bar. Baa Bar is famed for its shooters, offering the customer the choice of many varying concoctions using various liquors, spirits and syrups. Due to the shooters being cocktails, they have names often referring to popular culture, taste or appearance. These include names such as traffic lights, lust and assassin. This was an interesting strategy as it appealed to a student market as well as the local market because the shooters are generally sweet tasting and only cost a pound. It was an innovative idea brought to Liverpool, due to it being an area with many pubs or clubs, but, less combining the both which is now described as a bar. This idea has been replicated in all its premises, with all bartenders offering a shooter for a pound with every drink.

However, the non-Baa Bar bars do not use this as their main selling point. Modo, the second bar to be opened used this innovative idea and pushed it further. It offers people cocktails as full drinks, not just shooters. Some of their best sellers include Purple Rain and Raspberry Ripple (due to their appearance). These products have different prices for the weekend as they do during the week. They offer a glass of cocktail on a Friday and Saturday for £3.50; whereas during the week it is £2.95 and buy one get one free. Although Modo’s design is award winning and is aimed at a classier clientele, it has not moved away from their student base. A large number of bars close within the three years they open, but Elaine Clarke, the Managing Director of Baa Bar Ltd, realised to make money during the week they have to appeal to students. Therefore, the offer of ‘buy one get one free’ in Modo on a week day allows students to taste the finer products the company has to offer at a cheaper price. All the bars within the chain also offer cheap bottled drinks and a doubles bar (an extra shot of vodka, whiskey or brandy for 90p) during the week. Again, this increases the revenue, meaning they do not have to rely solely on the weekends to keep the bar above break-even point, as many others do. Modo receives the largest revenue because it is the most innovative of them all, with an effective marketing strategy. It competes with the upmarket bars in Liverpool and due to the competitive prices it also competes with the student bars during the week, allowing students to frequent a more up-market venue, yet spend the same money.

(For further case information, please visit: www.baabar.co.uk)

Discussion Questions

• How important is the Baa Bar brand to the company?
  Consider: How does the company use its brand for marketing? Why is it important to develop a strong brand identity?
• How important are the ‘student’ customers?
  Consider: Successfully identifying your potential market and transforming your products/service offerings accordingly.
• Why was it important that Baa Bar differentiated its product offerings throughout the different bars?
  Consider: Internal competition (being your own competitor by simultaneously promoting two bars under the same company). How could you prevent this from occurring?
• What are the traits of an entrepreneur? Do Tom and Jonathan display all of these traits?
  Consider: What makes an entrepreneur? Are they born or created? How would you describe an entrepreneur to someone who had never heard of the term?
• Imagine you are a business development consultant working for Baa Bar Ltd. What recommendations would you make for the development of their businesses?
  Consider: Differentiation, web-based and physical marketing strategies, and the viability of employing more staff, the branding of the company and the long-term planning and aspirations of the company.