History About Whitbread And Co Ltd Marketing Essay

Whitbread was started by Samuel Whitbread who had then got into a partnership with Thomas Shewell in 1742, which was then named Whitbread & Co Ltd in 1799. In 1750 the brewing operations which were stared y Samuel Whitbread were moved to a place in Chiswell Street which is located on the eastern rim of Georgian London, where the first mass-production brewery was established in Britain.

Whitbread & Co Ltd which is now known as Whitbread Group Plc, decided to sell all the breweries and brewing interests (Whitbread Brewing Company) to Interbrew now known as InBev in 2001.In 2005 it moved its core operations from City Point in central London to Oakley House in Luton, and then in 2006 to larger offices at Whitbread Court in Dunstable,(previously used by the now defunct Whitbread Restaurants Company) in a bid to reduce costs.

In 2006 it went on to sell 239 Beefeater sites to Mitchells & Butlers.

In January 2010, Whitbread revealed its new corporate logo, losing the “welcome with a smile” strapline and introducing a modern logo with an “Eat, Sleep and Drink” tagline.

http://www.whitbread.co.uk/whitbread/aboutus/history.html

Mergers And Acquisitions

In 1742 Samuel Whitbread Started his Brewing company in 1742 in London. Then in 1948 Whitbread became a Public Limited Company an its first acquisition was in 1962 where the group acquires the Thresher off-license business. In 1979 Whitbread opened its first Brewers Fayre restaurant and as of know in 2011 in owns around 125 licensed pub restaurants. The first Travel Inn, which was later named Premier Travel Inn, was opened in 1987. In July 2004 Whitbread Bought 132 strong Premier Lodge Chain Hotels so that it could become UK’s largest hotel operator. In April 2006 whitbread sells 46 Marriott Hotels to the Royal Bank of Scotland and in the same month whitbread announced a joint venture with the Emirates Group to open Premier Travel Inn in the Middle East as well. In June 2006 Costa Coffee, which became a part of Whitbread in 1995, signed a joint venture with the Yeuda group and launched one of its branches in shanghai. In 2011 there are over 1500 branches of Costa Coffee all over the world. In June 2007 Whitbread changed the name of its hotel from Premier Travel Inn to Premier inn to differentiate from its arch rival Travelodge. Later that month Whitbread signed a 50/50 joint venture with real estate developer Emaar-MGF to open 80 Premier Inn Hotels in India. In March 2008 the first Premier Inn opened its first Middle Eastern Hotel in Dubai. In may 2008 Whitbread officially launched its restaurant brand called Table Table and 105 Brewers Fayre restaurants were then converted to the new format which as of know in 2011 have 105 branches and have not been expanded.

http://www.caterersearch.com/Companies/33934/whitbread-plc.html

Objectives

Whitbread manages market-leading businesses like budget hotels and restaurants, which includes Brewers Fayre, Premier Inn, Taybarns, Beefeater Grill, Costa Coffee and Table Table. It is UK’s one of the largest Hotel and Restaurant groups. Its objective and strategy is to create value for their shareholders by investing in the market and by expanding in the areas of hospitality industry, with a prime focus on Costa Cofee shops and Value for money hotels. 

Their vision is to build large-scale hospitality brands all over the world by focussing on customer needs and giving them value for money products making their everyday experience a bit more special so that they come again and again. Whitbread’s core values are being genuine by showing that they really care for the customers, by being confident by showing that they always try and be the best at what they do and by being committedto their work. It also has goals in many more sectors like 

www.whitbread.co.uk

 

Type of Company

Whitbread is a Public Limited Company which is manages a large number of restaurant pubs which include beefeater grill, table table, brewers fayre, 7 “all you can eat” buffet restaurants called Taybarns, around 590 premier inn budget hotels and around 1100 costa coffee stores in Uk and 600 in 25 other countries.

Turnover Budgets 

Full Year*

Turnover: £1.33b (2008-5: £1.22b)

Pre-tax profit: £198.6m (2008-5: £134.6m)

Half Year*

Turnover: £682.2m (2007: £605.8m)

Pre-tax profit after exceptional items: £129.2m (2007: £123.2m)

* the figures cover continuing operations

Financial year end: 26 February 2009 

Half year end: 28 August 2008

OPERATING DATA

Total number of employees: more than 33,000

Financial figures below are from the year to 26 February 2009:

WHITBREAD HOTELS & RESTAURANTS

Te Turnover: £1.06b (2008: £973.9m)

Operating profit before exceptional items: £254.9m (2008: £233.5m)

Premier Inn

Turnover: £601.5m (2008: £527.8m)

Like-for-like sales grew by 6%

Number of hotels: nearly 600

Number of bedrooms: 40,559

 

Restaurants

Turnover: £460.1m (2008: £446.1m)

Like-for-like sales grew by 4.6%

Number of restaurants: 372

Number of restaurants co-located with a Premier Inn: 328

Brands: Beefeater (130), Brewers Fayre (130), Table Table (105), Taybarns (7)

COSTA COFFEE

Turnover: £263.8m (2008: £216.3m)

Operating profit before exceptional items: £22.7m (2008: £20.8m)

Number of outlets: 881 in the UK, 407 overseas

http://www.caterersearch.com/Companies/33934/whitbread-plc.html

Legal Legislation

Changes in law effect the company. For example changes in Taxation policies effects the costs. A rise in corporation tax i.e. tax on the profits made by the company effects in the same ay as if there is an increase in the costs in a same way when other tax prices are increased it affects the company costs. Then there are many other laws as well like The National Minimum Wage which was recently extended to under 18’s.

Sectors Operated By The Company And Number Of Outlets

Whitbread’s brands include the following:

Premier Inn

Premier Inn is the UK’s largest hotel chain, with 590 hotels in the United Kingdom. In April 2008 it launched a premier inn in dubai as well and also launched a branch in India later that year. Premier Inn recently launched a new television advertising campaign after its re-launch from “Premier Travel Inn”, featuring an advert starring Lenny Henry. Premier Inn is the only hotel which offers Good Night Guarantee.

Table Table

Table Table was launched in May 2008 and is a UK restaurant brand. Around 105 Brewers fayre were converted to Table Table and then gradually more branches were opened, usually located near Premier Inns.

Beefeater

Beefeater serves million of guests every year and was launched in 1974. The chain was completely refurbished in the early 2000’s. An advertising campaign was recently launched in the central UK region. It has over 131 restaurants all over across UK.

Brewers Fayre

Brewers Fayre is pub restaurant. The pubs have a strong family presence but were designed to look like traditional UK pub restaurants. There are loads of branches of Brewers Fayre and few more will be launched in the coming years.

Taybarns

Taybarns is an “all you can eat” buffet restaurant and has 7 branches as of December 2010. THis restaurant offers great food with great value for money.

Costa Coffee

There are more than 1500 outlets of Costa Coffee world wide. It also operates in the Middle East, India and Pakistan through Franchise partners, and in China via a joint venture agreement. It plans to open over around 130 more outlets in UK  and around 120 overseas in 2010/11.

Principal Products And Services

The Principal products and services of whitbread company basically are Restaurants-Beefeater Grill, Taybarns, Brewers Fayre, Table Table;Coffee shops- Costa Coffee an Hotels- Premier Inn hotels aiming to provide great customer service in each and every sector of the Hospitality Industry.

Customer Profile

The company usually focuses on all types of all types of customers.It is basically targeting specific customer segments and giving the customers what they want at a price which they want to pay. Premier Inn usually focusses on business markets, on retired sightseers’ or on short break travelers. in costa it could be many types of customers, some those who like to sit and relax with a cup of coffee or some those who like to take away so its always meet the needs of the customers and understanding them better.

Promotional Strategy

Whitbread recently launched its first costa television advertisement in october 2010. A rise in the sales was seen after the ad was launched. The revenue which was 7.8%  went up to 28.4% which was a huge success. The famous Lenny Henry advertisement was a great success as well.

After the launch of the ad in which Lenny Henry is promoting Premier Inn hotels  the sales went up by 10.1%. People started booking more and more rooms starting from 29 pounds.http://www.managementtoday.co.uk/news/1035681/Heres-profit-Whitbread-toasts-Costa-Premier-Inn/

Market Strategy

Premier Inn has approximately 6% of the total UK hotel market. Within the budget hotel sector, just 4 brands account for 80% of all budget hotel rooms, Premier Inn being the largest budget hotel chain in the UK. 

Whitbread’s pub restaurants compete in the total out-of-home eating market worth some £40 billion in the UK today.

Shares in issue: 176.7m 76 122/153p Ordinary Shares in Issue, as at Last Close.

On the right is a Virtuous circle created by Whitbread between ‘doing the right thing’ and generating long term value for the shareholders.http://www.whitbreadannualreport0809.co.uk/Corporate-responsibility.aspx

Major shareholders information

Shareholder Name (* – Executive/Director)

Amount

% Holding

Blackrock Inc

1,78,71,143

10.12

Schroders Investment Mgmt Ltd

1,05,31,421

5.98

Legal & General Investment Management Ltd

69,78,034

3.96

Director shareholdings

Director Name

Amount

% Holding

Andrew Andy Harrison

1,61,673

0.09

Anthony John Habgood

50,275

0.03

Christopher Charles Rogers

47,976

0.03

Patrick Dempsey

27,086

0.02

Wendy Becker

6,000

0.00

Richard Baker

4,956

0.00

Philip A Clarke

4,017

0.00

Stephen Geoffrey Williams

4,000

0.00

Simon R Melliss

1,500

< 0.01

Anthony John Habgood

522

< 0.01

source- http://www.whitbread.co.uk/whitbread/investors/shareinformation/significantshareholders.html

Portfolio Task 2:

SWOT Analysis of Whitbread

SWOT analysis will help Whitbread company to know about its Strengths, Weaknesses, Opportunities and its Threats which will help the company to develop more by using its Strengths and working on its Weaknesses, by making full use of its Opportunities and finding a solution to its Threats. In this way it will generate more business and in a better way.

Strengths [Strengths {WOT}]

Less percentage of  labour turnover and high labour stability is definitely a key strength for the Hospitality Industry where high labour turnover is a fact. 

Excellent brand reputation – Reason being Value for money the core standards of the company are always on the basis of brand audits mystery guest audits.

Customer loyalty/ relationship – Excellent customer service. 

Good technological skill – Two green hotels opened in 2009 and 2010. First company to open a green hotel. 

Location- Location plays a very important role for example Premier Inn located at Bath road is located 15 minutes away from Heathrow airport so one of the major strengths of Premier Inn Bath road will be its location.

Good promotional rate – company contracts.

Low price compared to other hotels of same category 

Weakness [S {Weaknesses} OT]

Limited finance and resources   

Lack of new product and services.

Less number of high net worth individuals 

Less number of highly talented employees as the company pay-off is less.

Opportunities [SW {Opportunities} T]

Advertising in the different kind of media like internet, news paper, television, wallets, etc.- A good opportunity as it makes people aware.

2012 Olympic games will bring more number tourist to the UK- more tourists and  opening up of two more Premier Inns to cover up the olympics 

Branding our product with the celebrity – Lenny Henry advertisement has shown a 10.1% increase in Premier Inn sales

Keeping the customer satisfied with new Seasonal offers- Makes the customers come back again and again.

Sponsoring the local event- More people get to know about the company and they than come again and again.

Using new technology-

Customer feed back.

Threats [SWO {Threats}]

Economy of the country- If the economy of the country goes down it will certainly be a threat to the company as it will have to face losses due to less customers coming there will be a slow down in the trade. It is one of the biggest threats to the company.

A innovative and productive competitor in your area- 

Increase in the national minimum wage – There will be an increase in the labour costs and everything will have to be budgeted again so that the company doesn’t face a loss.

Employee turnover (losing of key staff member) – A big threat as appointing another employee with same caliber is at times very difficult, then training the new employee for everything is expensive.

Advance of new technology – could be a possible threat as people prefer new technology so getting the technology in the company could be expensive.

Change of government or in their polices/ regulations – one of the major threats.

Portfolio Task 3

Factor 1 – Employment Data 

When there is a decrease in employment it shows a contracting economy, whereas if there is an increase in employment it shows a prosperous economy.

Factor 2 – Interest Rates

Interest Rates are always a major focus in the share market. Central banks are the prime focus of investors and the various market participants as they mandate monetary policy and supply.

Factor 3 – Inflation

Inflation is usually measured by the increases or decreases in pricing levels over a period of time. As there are a vast number of goods and services available in the country, so the changes in pricing are usually measured by assembling the available goods and services. So it can be concluded that when the price of the goods and services increases the inflation rate which therefore could devalue the country’s currency which in turn affects the whitbread group.

Factor 4 – Recession

Recession affects the hospitality industry in a major way. It mostly affects the small pubs and restaurants as they face a closure. It affects the hotels as well in a major way as the customers don’t come to the restaurant to spend money and henceforth the hospitality industry faces losses.

Factor 5- Exchange rates

Changes in exchange rates certainly have an impact on the production costs.If there is a fall in the pound rates compared to foreign currencies then importing goos and products will be much more expensive for example if there is a fall in exchange rates then the foreign hotel costs will increase and people will think twice before booking the hotels as said by Tribe, J. (1998) in his book The Economics Of Leisure and Tourism.

Read more: http://www.articlesbase.com/currency-trading-articles/the-8-economic-factors-that-affect-the-forex-market-437747.html#ixzz19vWgp0Hl 

The Economic Factors stated above have changed in the last five years. In the last few years Hospitality Industry has developed a lot according to the economic growth of the country. In the last two years the country has seen recession and inflation go high due to which the economic growth had decreased but had never stopped. It certainly affected the whitbread group in a major way in March 2009 as it had reported a slowdown in trading in the fourth quarter due to the lack of  travelers  which had hit the occupancy level in Premier Inn hotel. In a trading update which covered 50 weeks to February 12th, Whitbread had reported a rise in the sales by 4.9% which although fell by 1.5 % in the starting 11 weeks of the fourth quarter. Sales which were up by 6.2% at Premier Inn for the  first 50 weeks had suffered a fall by 3% due to a fall in the occupancy rate which had gone down from 66% to 58% in the fourth quarter. As a result of this slowdown it had forced Mr. Alan Parker ( former CEO of Whitbread company ) to step up the pace of the cost-cutting program  which was worth 25 million pounds. Capital expenditure over the coming year was reduced from 300 million pounds to 200 million pounds which was further reduced to 170 million pounds. Despite the slowdown in trading due to recession and inflation Mr. Alan Parker said that the performance in the whole year would meet the results which were predicted and that their Value for money products were well-placed to continue to outperform in the market in recession as said in an article by Times.

http://business.timesonline.co.uk/tol/business/industry_sectors/leisure/article5830434.ece. 

Portfolio Task 4

Rules and framework are formed by the government and these rules are followed by companies and they compete in the market with each other following these rules.However these rules keep changing from time to time which certainly affects the company. Different rules will be introduced, different ways of working might be implemented so it definitely will impact the company.

The Enlargement of European Union will benefit in several ways there will be Freedom of movement for the worker and also for the people of Europe. The Freedom of movement will legally allow the people from a member state to go and reside in any country they like and will also allow them to work without any permission from law.There will be a Principle of no discrimination which means that if a person moves to another country i.e. changes his/her country of residence then all the personal rights will be transferred to the country of residence. Rights such as Unemployment insurance, Health Insurance these are all extended to the other country regardless of the nationality of the person. There will be more and more trade and investment between the countries. There will be more price transparency and the cost will lower down as the price lists will be in only one currency.

The decisions of the Central Government on issues like corporate tax, VAT, levels of interest rates has a great impact on the THL industry. It has been notice in the past few years that many company are facing a fall in the percentage of profit the used to earn. To have an influence on the Central Government the THL industry will have to have a representative who could represent the industry, will have to fix appointment and meetings with Central Government and For that THL industry will have to have all the evidences and facts the losses and the problems faced by the industry and the probable solutions  to it.

http://www.europeaninternships.com/hospitality-management-in-the-european-union-in-hotels-and-restaurants.htm

Portfolio Task 5:

There have been a quite  lot of social and cultural changes in the past decade. The population of the country has increased which obviously implies that the size and structure of the country has increased. Another major social and cultural trend would be the consumers attitudes and opinions towards the product The lifestyle trends have changed and have become more modernized. With new lifestyle trends coming fashion keeps changing as well so it can be said that its another social trend. Some more social trends would be Media like advertising and publicizing of the new products being launched in the market for example: Lenny Henry advertisement promoting Premier Inn hotels. There have been Demographic changes as well in the past decade as more and more elder people are expanding the market segments for hospitality industry. Marketing and Lifestyle have led to modern ideas of advertisements and literature which is promoting the product but then also indirectly reinforcing people’s ideas of their desired lifestyle which will then spread to leisure,hospitality industries. Media plays a very important role as a social trend as it can raise questions in the market, make people aware of new, better and cheaper products which can then influence people in their purchasing decisions as explained in the book by Tribe, J. (1995) The Economics of Leisure and Tourism. Cultural factors generally depends on an individuals point of view. One major Cultural Trend could be an increased concern for the Environment making use of environment friendly products. Whitbread had Undertaken some Corporate Responsibilities and one of the corporate responsibility was Environment Policy in which they try and promote good environment practice and they always try and minimize the impact on environment, they try to prevent pollution by improving their environmental management. They have undertaken a fundraising activity called Water aid in which they use as less water as possible, raise awareness about it and also raise money for those countries where people lack basic sanitation where people don’t even get safe water to drink. Whitbread is also trying to reduce their carbon emission by 2.6% every year, diverting 80% of waste generated by the  whitbread restaurants and hotels away from landfill, Reducing the consumption of water b at least 20%.

Ageing Population

Ageing population is basically an increase in the number of people with more age or it can also be said that an in the number of older people with an average age of 60 in a country.

The reason for an increase in ageing population is a reduction in age-specific mortality i.e. longer lives and a reduction in the fertility rate i.e. fewer births.

Ageing population could affect the supply side of the economy in certain ways. The government is reducing the year for pension plans which affects the elderly people, if they retire at an early age the government will not get the tax from those people which will at one point affect the economy. It will affect the hospitality Industry as well in ways that people with less pension will travel less which means it will affect the occupancy rates of hotels it will affect the restaurants as elderly people are a very important group of customers for hospitality industry so it certainly will affect the supply side of the industry which in turn will affect the economy.

http://www.publications.parliament.uk/pa/ld200203/ldselect/ldeconaf/179/179.pdf

Portfolio task 6

Some technological factors that affect the company are more development in technology more inventions, improvement in the internet facilities, competing technology development .In the past five years the technology has developed quit a lot. Development in technology in such a way that it doesn’t harm the environment in fact designing something which does good to the environment i.e. using the resources efficiently saving them for the future generations, looking into the matters of global warming and basically making use of the technology that it doesn’t harm the environment but does good for the business as well. Development in the State of Art conference facilities i.e. having proper conference rooms in the hotel for business class people with large number of conference rooms with in-built LCD projectors, different Video-conferencing rooms which is another development in the technology in the past few years.  Another factor is the development in the internet facilities, guests could easily do reservations for rooms for hotels, they could book tables in the restaurant find out about a particular restaurant or hotel, where it is located what all facilities do they provide all on the internet

The changes in the technological factors in the past few years have left a very good impact on the Whitbread company.  Premier Inn which is a part of whitbread launched its first green hotel in 2008 which was opened with the help of a lot of new technology like using low energy motion sensors , high efficiency thermal and acoustic insulation and solar panels which is expensive but it provides enough water for at least 1000 baths a year. In these hotels the consumption of energy is totally reduced and low carbon technologies are used so that CO2 emissions could be used and one example is the use of ground-source heat pumps which uses earth’s natural energy to heat or to cool the rooms. It is refurbishing most of its restaurants and hotels and coffee shops to make them more environment friendly, replacing the old machines with the new ones. Development in internet is playing an important role as well. Whitbread has a tie-up with a company which sends guest recommend forms on behalf of whitbread to its customers which then is evaluated by the same company and the company the tells whitbread what the customers think about them. Everything is evaluated the Customer service, the Food, the Environment, Value for money, the Quality which then helps whitbread to look where it is lacking and improve on those areas. All this is done by the help of the internet.

An Increased use of internet by the customers will have a good impact on the company because of its brand reputation. The customers would come to know more and more about the company which at a point of time will increase the business opportunities. For example  the launch of the premier inn Green hotel, people could get information about it in the internet which is a very good international exposure. So all in all it could be said that more use of Internet by the customers has left a positive impact on the whitbread company.