Phase One Market Research

Client: Laura Hill The Red House

Whitney Dawson . Brittany Hoag . Reggie Ford . Rich Goodenow . Ben Scott

Phase One page 1

Table of Contents

2 Company Analysis 3 Market Overview 4 SWOT Analysis 5 Competitive Analysis 6 Macro/Micro Environmental Factors 8 Sources

What sets The Red House apart from other event venues? “It’s just different! The rock memorabilia and the location, the fact that it’s historical, makes it very special.” –Owner, Laura Hill

Phase One page 2

Company Analysis • Core Competencies

• Competitive advantage • People

Management staff who personally ensure support and satisfaction Staff desire to build a strong relationship with each individual Professional event planners tailor the experience to the customer

• Place “Once you enter The Red House, it becomes your home” (Laura Hill) Customer

has the freedom and space to feel comfortable and welcome on the property Located in the historic district of downtown Franklin, TN The town is an attractive destination boasting quality shops and restaurants -

Franklin was named “Number One Small Town in Tennessee” by Southern Living 10 The community is very active and welcoming and holds several annual festivals The house has a 228 person indoor capacity with many unique themed rooms Ample parking spaces for customers

• Price The Red House works with the customer’s budget, not the other way around Customers are welcome to bring their own alcoholic beverages and resources to

cut costs • Wide variety

• Great variety of event organizations. For example: receptions, rehearsal dinners, private parties, corporate events, music showcases, CD release parties, film and photo shoots, and fundraising events

• A diverse base of customers and corporations use The Red House • Difficult to Imitate

• The Red House is a unique venue that is decorated with one of a kind rock music memorabilia

• The Red House features a very comfortable atmosphere compared to larger event venues • Value Proposition

• The Red House is an event venue that strives to create a dynamic entertainment experience through its inviting atmosphere, exceptional customer service, and unique rock ‘n roll memorabilia

Laura Hill’s marketing and financial goals for The Red House15

• To increase The Red House’s income to $20,000 -$25,000 per month. • To have consistent bookings every weekend and several days during the week • To expand into the corporate world as well as the bridal market and music business

industry • To "Take it to the next level" 15

Phase One page 3

Market Overview

The Red House’s Current Clientele: • Local corporations and brides seeking an intimate and unique venue

o 75% of events held are weddings & rehearsal dinners (35 weddings during first year of business) o 20-25% of events are corporate (MARS Petcare uses the space 1 to 3 times per month)

• Non-profits: "I'm a community person. I like to help people make money" - Laura Hill 15 • These customers represents a variety of middle to high income clients

Red House’s Potential Clientele • An event venue is a place where friends, family, and co-workers come together to celebrate special occasions,

socialize, and strengthen professional relations. It is the venue’s responsibility to ensure the achievement of this common purpose, to create a memorable event, and to ensure client satisfaction. 17

• Key needs: One stop shopping, a unique venue, sensible & affordable cost, and a holistic experience • Driest Tinder: Individuals who value the inimitable appeal of The Red House and are seeking to host their

own events with the guidance of a resourceful and devoted planning team

Demographics and Growth • Estimated population of Williamson County in 2009: 175,995 37

• Projected to grow 13.7% from 2009-2014 • Median income relative to surrounding areas: High 38

• Median income in Tennessee: $43,614 • Median income in Franklin: $62,454 • Median income in Williamson County: $87,400, Projected to be $93,869 in 2014

We identified 4 markets that The Red House currently caters to or has the potential to break into. • Wedding

• Williamson County: 978 marriages per year (5.9 per 1,000 people), an increase of 27.3% since 2002 30 • Davidson County: 4,445 marriages per year (7.6 per 1,000 people) • Over 100 churches located in Franklin 9 • The average wedding budget is $22,000 32 • “Weddings are one thing people don’t want to skimp on, since it happens just once for most people,”

claims Lisa Novitsky, owner of Grand Star Studios 28 • Corporate Offices

• 22 corporate headquarters with 100+ local employees. These include Nissan, Bridgestone/ Firestone, Caterpillar Financial & MARS Petcare

• Businessweek named Franklin one of the Top 50 Cities to Start a Small Business 26 • 30 of the 50 fastest growing private companies in 2009 in the Nashville region are located in

Williamson County 38 • Music in Nashville

• Over 80 record labels, 130 music publishers, and 180 recording studios are located in Nashville 22 • Music industry utilizes event venues for: CD release parties, private receptions, television and

magazine interviews, photo shoots, private performances • “Warner Music is always looking for somewhere new and intimate to hold their private events out of

the public eye.” - Warner Brothers Music Employee, Melissa Dahl • Tourism in Franklin:

• The Red House can attract Franklin’s visitors and serve as their event hub while exploring the town • Franklin is included in Patricia Schultz’s New York Times Best Seller 1,000 Places to See Before You Die

and won the Great American Main Street Award in 1995 10 • The Franklin Main Street Festival attracts over 100,000 visitors every April 13

Event Venue Market Trends: • Event personalization: forget the trends and be yourself • Comfort, love, and charm: “backyard rustic” weddings and events

• The home-like feel is appealing to new brides • Professionals that have easy access to various planning resources • Online wedding planning: saves time and money for technologically savvy couples 3

Phase One page 4

S.W.O.T. Analysis

STRENGTHS • The Red House presents a unique, vibrant event venue • The atmosphere at The Red House creates is very

welcoming and appealing to a wide demographic • The owner has acquired an appealing collection of one

of a kind rock and roll memorabilia, which is exhibited throughout the house

• A small, loyal customer base has been developed, including MARS Petcare

• The house’s location is 2 blocks from Franklin's town square, a cultural hot spot and attractive destination

• Laura Hill is very invested and engaged in The Red House. She is very personable, well known, and well liked in the community

• Caterers and vendors have become loyal to Laura and The Red House

• The Red House allows customers to bring their own liquor and beverages to reduce costs

• There are ample parking spaces surrounding the house. • The Red House event planners have available deals for

customers, such as Arrington Vineyards discounts • “The Red House looks like a bouquet of flowers in the

spring” –Laura Hill15 • In-house event coordinator makes The Red House a one-

stop shop

WEAKNESSES • From the street, it is difficult to recognize The Red

House as an event venue • There is no sign or display • The owner is busy individual who has many

commitments and is worried about spreading herself too thin

• The Red House lacks a large client database • The current advertising campaign is narrow in

scope and is not utilizing internet and social networking advertising space effectively

• The business’ slogan, "A place to entertain," does not express the house's great qualities

• Weddings are not mentioned or even alluded to on the home page of the website

• Lack of experience in the event industry having been open for only one year

• Exterior décor after the holiday season could be more inviting

• The Red House website lacks interactive features, such as a virtual tour, introductory video, online scheduling

OPPORTUNITIES • There is a high demand for cost-flexible event venues in

Franklin and Nashville • Franklin's 8 annual festivals are great opportunities to

touch visitors and attract future customers15 • Online event sites and social marketing sites offer many

advertising opportunities • The Nashville Music business has a great demand for

appealing, intimate event venues • Greater Nashville presents a large market that has yet to

be tamped • Corporations are seeking innovative ways to entertain • The number of marriages per year has been increasing

from 2001-2007 in Williamson County, and is projected to continue 28

• Opportunity of movement into the tourism market, as Franklin is home to many historical sites

THREATS • Franklin’s city codes are very strict and could limit

expansion 35 • There are several event venues in the area that are

attempting to expand their customer base • Local hotels have many larger event venues • The economic recession has a great effect on how

much customers are willing and continue to pay • 19% of consumers say they will continue to try to

save more money in 2010 24

Phase One page 5

Competitive Analysis

Event Venue Tablestakes • Assistance with planning the event • Well maintained venue • Professional and experienced staff • Location & ease of access • Accommodation of desired number of

guests • Up to date website information

We identified 8 event venues within Davidson and Williamson Counties that have similar facilities and capabilities of The Red House and categorized them as small or medium. These competitors are the following:

• Small Event Venues (Capacity under 150) • The Timothy Demonbreun House (Nashville, TN) Capacity of 75

• Has 11 pm curfew and other limitations due to historic location • Bed & breakfast with 4 rooms that may be used by the wedding party

• Mere Bulles (Brentwood, TN) Capacity of 100 • Restaurant & banquet hall • Many hidden fees, including Chef station fees, credit card service fees

• Belmont Mansion (Nashville, TN) Capacity of 120 • Does not allow alcohol • “Convenience and Value describe the wedding experience at Belmont Mansion.”

• Medium Event Venues (Capacity between 150 & 299) • CJ’s Off the Square (Franklin, TN) Capacity of 1506

• Valet parking required for all events over 50 guests • Music restrictions outside after 10pm

• Lillie Belle’s (Franklin, TN) Capacity of 250 • Across from Franklin City Hall & next door to Christ Community Church • Can check availability easily online

• Carnton Plantation (Franklin, TN) Patio Capacity: 250, Garden Capacity: 500 • Little flexibility: only offers 3 strict packages for weddings and receptions

• Walnut House (Murfreesboro, TN) 275 standing; 200 seated • No website or outdoor space • In-house recording studio

• Traveler’s Rest (Nashville, TN) Capacity of 150 inside; 300 with tent34 • Offers seasonal Sunday discounts of 35%-50% off for weddings and events

Summary of Competitors in relation to The Red House: The Red House has a capacity of 228 people, with the ideal vision set at 150 guests. Of these 8 competitor venues, 5 of them can hold between 150 to 299 guests. Of these 5 competitors, only 3 of the venues are located in Franklin. All offer one-stop shopping, including onsite catering, event planners, and venue coordinators. Critical Steps to Differentiate The Red House from Competitors Creative and Innovative Advertising Methods

• Advertising to small businesses by emailing or mailing them a brochure • Bridal Shows in Nashville, such as Nashville Premier Bridal Show • Social media sites and look into other blogs and website.

• Ex. http://www.AshleysBrideGuide.com, http://www.StudioWed.net, http://www.eventective.com • Ashley’s Bride Guide Claim: “Everything you need to plan your Nashville Wedding. If you are looking

for the best events, vendors, and venues for Nashville brides- this is the spot.” • Posting a sign out front would not only promote awareness of The Red House, but also serve as an aid for

customers to locate the venue Captivating Websites

• Virtual tours are very appealing, as seen on the Mere Bulles event venue website • Video featuring Laura Hill introducing her creation, The Red House • Availabilities posted on an online calendar

Enticing Events • Look into hosting recurring, exclusive events that showcase the musical talents of local artists (similar to

those of The Blue Bird Café in Nashville) • Holding community events such as fundraisers and celebrations that invite patrons to visit the house • Loyalty of the caterers, personal touch, and experience with the coordinator sets certain “one stop shopping”

venues apart from one another

Phase One page 6

Environmental Analysis

Macro environmental Factors • Demographics

• The aging population - The baby boomers are turning 50 and looking for ways to revisit their youth - nostalgia of the past

• Later age of marriage - Older couples seek comfortable and well adorned environments for their events • Cultural diversity is an increasing social value - Businesses must ensure that they reach out to and

welcome a diverse customer demographic • Younger consumers live fast-paced lifestyles that limit their available time, therefore they have a great

value for one-stop shopping Average employed American works a 46 hour work week 2

• Economic Climate • In light of the recession consumers are cutting back on their spending and seeking more cost efficient

alternatives • Consumers are avoiding elaborate displays of spending in favor of options that are impossible to imitate

yet conservative • Technology

• Consumers are demanding advanced technology (Audio/Visual equipment, high-speed internet access) and expect that the venue will provide these resources

• Consumers expect online resources that allow for event planning at their convenience • Legal and Regulatory Issues

• Franklin, TN has very strict policies concerning building/property renovation and expansion • New town policies or decisions are likely to affect The Red House

Micro environmental Factors • Competitors

• Competitors are expanding beyond traditional marketing techniques to attract new customers and strengthen their market share

70% of marketers are planning new social media initiatives in 2010 18 • Competitors have valuable resources (large properties, existing community ties, established customer

bases) that offer advantages • Many event venues in Franklin have many years of operation experience

• Customers • Customer satisfaction is the best indicator that they will recommend The Red House to others • Customers are looking for memorable experiences that will motivate them to return to The Red House

Phase One page 7

Phase One page 8

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