The Marvel Restaurants

In the case of Planet Hollywood, that resulted in revenues that averaged $10 million to $15 million in its third year of operation; the busiest locations generated revenues in excess of $50 million.

Recognizing that Planet Hollywood appeals to a younger crowd than traditionally visits casinos, ITT Corporation (owner of Caesar's Palace in Las Vegas) announced in 1996 that it would develop, manage and operate Planet Hollywood-themed casino hotels in Las Vegas and Atlantic City; ITT will receive an 80 percent interest in the joint venture, which will trade on the rapid success of the restaurant chain bearing the same name. (Tenny, 1996, p. 19).

In another joint venture, Planet Hollywood announced in mid 1994 that it was planning to team with Marvel comics to develop a chain of restaurants based on Marvel's comic book characters. The Marvel restaurants were to have a similar merchandising to that of Planet Hollywood. However, the Marvel-themed restaurants did not develop as expected and the promise of a 30 outlet chain based on comic book characters remains unrealized. Still, the company continues to move forward with Marvel plans, including plans for the Middle East and Europe.

Hard Rock started in London more than 25 years ago, and posted 1996 sales of $400 million in 70 restaurants operating in 20 countries; this contrasts to Planet Hollywood's 1996 sales of $373 million in 55 restaurants. Hard Rock Cafes are similar to Planet Hollywood in that they feature merchandise and apparel with Hard Rock logos, but the theme here is rock and roll rather than films. Hard Rock has also marketed items which are only slightly related to its core business, including Hard Rock music albums, live music and concerts. In recent surveys of diners, Hard Rock edged out Planet Hollywood in terms of customer satisfaction and overall dining experience. Competition such as Hard Rock and similar operations is likely to result in slower growth for Planet Hollywood as it tries to consolidate its market base and preserve its profit margins.

In exchange for card privileges, consumers receive a one year membership in the Planet Hollywood Express Club. This entitles members to immediate first-available seating, a limited-edition anniversary T-shirt, and discounts on food, beverage and merchandise at the various Planet Hollywood outlets. Although the program has not been in place long enough to determine whether the company will achieve its marketing goals, this demonstrates how a company can use creative marketing techniques combined with information technology (through its partnership with VISA) to enhance its market strategy.

Planet Hollywood expanded its operations into the international arena at an early stage in its development in order to capitalize on the popularity of American cinema overseas.

 

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