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Marquee The Business of Night Life Case Solution

Solution Id Length Case Author Case Publisher
1051 1154 Words (5 Pages) Anita Elberse, Ryan Barlow, Sheldon Wong Harvard Business School : 509019
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The decision regarding Marquee’s future is a critical one. There are two options, either to close it altogether (and start a new venture) or to start a new venture keeping Marquee running. Marquee is in a strong position now, with years of experience, perfect location, ideal clientele, and outstanding revenues. However, maintaining a successful club for so long is an achievement in itself. With growing years, revenues are decreasing. There is an increase in expenditure including rent, payrolls, and club maintenance. Also, it is hard to maintain a positive brand image over a period of time. The club needs to keep on innovating, to bring in better ideas and keep it on top of competitors. Then with the increase in years, customers also increase. Developing and maintaining successful relationships with new and old customers is critical. Eventually, customers would like to move on and try new places to hang out. Keeping all this in mind, it can be concluded that moving onto a new club is more suitable for Tepperberg. The strong customer relations that Tepperberg has maintained can be useful in giving the new club a strong clientele. They could market it using Marquee’s name and platform. They could add newer services and innovations to give the place a difference e.g. maybe add a casino or a restaurant. As for Marquee, it has already crossed the average age of a night club. It could be kept running for another six months until the new club is successfully established and running. Later on, it could be sold off.

Following questions are answered in this case study solution

  1. In your view, how should Tepperberg approach a possible second club in New York City? And what should be Tepperberg’s strategy regarding Marquee? Are those decisions related? 

  2. What is the logic behind how Marquee operates? What makes Marquee a “hot” nightclub? 

  3. What is Marquee’s business model? What are the key sources of revenues and costs (see Exhibit 3)? 

  4. How important are the different customer segments to Marquee’s business? And what role do promoters play in managing the customer base?  

Case Analysis for Marquee The Business of Night Life

What is the logic behind how Marquee operates? What makes Marquee a “hot” nightclub? 

In 2003, Jason Strauss and Noah Tepperberg transformed the raw space of a truck garage into a phenomenal club, by utilizing their years of experience, prior knowledge, and influential connections in the industry. Marquee was an instant success.

The club is on 10th Avenue, a premium location for restaurants and clubs catering to elites. Marquee is designed to suit the needs of the club functionally and efficiently. It has designated cabaret, mezzanine and lounge areas, with separate space for the “bottle-customers” and the “filler-crowd”.

Marquee managed to become a brand name that attracted influential professionals, models, celebrities and socialites. The atmosphere and the image of the club made Marquee a magnet to a diverse variety of club-goers. The “salad bowl” of clientele demands exclusive customer relationship management skills. The customers are defined into categories and are given exclusive services accordingly; such as careful placement of tables and storing a leftover bottle of alcohol for the next visit. The club undertakes a number of promotional strategies to make it the place to be. These include networking, hotel concierges (the “red-card”) and word of mouth through some of the top-notch professionals in town.

Jason and Tepperberg maintained successful customer relations over the course of years, even before establishing Marquee. Now, Tepperberg stays at Marquee almost every night to meet with his exclusive customers, and Strauss does the same in Las Vegas, overseeing TAO. Both make sure that any client traveling to the sister company of Strategic Group is treated the “Marquee way”, as they state it.

What is Marquee’s business model? What are the key sources of revenues and costs (see Exhibit 3)? 

Marquee focuses on its exclusive services offered to high-end customers. Brand image and quality of service play a key role in their “Premium Business Model”. Marquee’s customers know this and are willing to pay premium prices for the exclusive services and a phenomenal experience. The club makes sure that its customers are the top-tier, distinguished elites. They sell a $200 bottle of Johnny Walker at $600, but the customers are willing to pay because the ambiance and the atmosphere that Marquee offers is exclusive. Marquee offers its customers exclusive services, from offering tables at the right spot to debiting the leftover bottles of alcohol for future use. The employees include attractive waitresses, a steady doorman and a range of staff members who give the customers exclusive services. Sometime Tepperberg arranges for a celebrity DJ for the crowd as a surprise. Every member of the staff ensures that each customer is treated in the “Marquee way”.  They call it a “one-stop-shop of hospitality”, catering to every need of the customers.

Marquee’s major sources of revenues are at the entrance door ($997,000), the drinks served at the bar and at the tables ($12,782,000) and the revenue generated from special events ($1,415,000). The major expenditure is on the supplies, which include drinks ($1,798,000), juice, water, groceries, and food ($283,000). Payroll ($1,988,000) is another major expense. Promotional expenses count to $5,100,000.

How important are the different customer segments to Marquee’s business? And what role do promoters play in managing the customer base?  

For any business, customers are the focus. It is necessary to have a perfect mix of customers for a steady flow of revenues. Marquee has developed a strong database of influential top-tiered clients. These are divided into two main categories, namely bottle-service customers and filler crowd.

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