ABC Carnival Water Theme Park in Manchester City - Business Plan Example

Business 0 Executive Summary ABC Carnival is a quality water theme park, which will be established in Manchester through its expansion business plan. The park is designed to establish good experience for families and individuals of every age group as its customers. It will provide customers with attractive and amusing facilities for entertainment such as water slides, wave pool slow rivers among others. In the targeted area, the population is about 2,682,500 and the park will strive to fulfil the entertainment requirements of such huge population. In the first year, it is believed that the park will generate revenue of about £241,000. The revenue will be supported by its key attraction in weekends, festivals and holiday seasons. Furthermore, it is also believed that the park will attract about 900 customers in a week. Apart from recreational services, ABC Carnival will also provide new employment opportunities along with various youth activities. Finally, it is forecasted that within five years, the park will attract considerable number of market share and generate a solid customer base in Manchester city. Table of Contents Business 1 1.0 Executive Summary 2 2.0. History of the Business and Current Position 4 3.0. Business Strategy 5 3.1 Sales Strategy 6 3.2 Marketing Strategy 6 3.2.1 Products and Services 6 3.2.2 Pricing Strategy 7 3.2.3 Promotion Strategy 7 4.0. Market 8 4.1. Industry Overview 8 4.2. Market Trends 10 4.2.1. Target Market 10 4.3. Competitor Strategy 11 4.4. SWOT Analysis 11 5.0. Financials 12 5.1 Break Even Analysis 12 5.2 Projected Cash Flow 13 13 6.0. Problems and Fixes 13 References 15 2.0. History of the Business and Current Position This business plan emphasises on an investment opportunity for ABC Carnival, to open a water theme park in Manchester city. The park is intended to fulfil family recreational and entertainment requirements for domestic tourists and regional people at a reasonable cost. In addition to the recreational and entertainment facilities of the water theme park, ABC Carnival will also provide opportunities for new employment along with various youth activities and campaigns. In the 17th century, theme parks started spreading throughout the UK and later in the entire Europe. The theme parks were the first permanent public sites dedicated for entertainment wherein the key attractions comprise cascades, flower garden, games and water among others. Visitors are also required to pay for the entertainment and enjoyments in the theme park. These entertainment facilities delivered important features that later were included in commercial theme parks (Milman, 2007). Globally, theme parks generated about US$20 billion income and by every account, the fame of amusement facilities is on increasing trend. According to the estimation of Economics Research Associates, in the year 2004, the world’s biggest theme parks attracted about 252.4 million visitors, demonstrating an increase of about 2.2% (Robinson, 2014). Although this industry was adversely impacted by economic crisis in the year 2009, it entered the recovery phase during 2010 to 2011. In future, the growth of amusement industry is expected to be driven by growing consumer expenditure on vacation and entertainment, rising level of disposable income and higher mass entertainment admiration. Besides, growth in developing nations and increasing base of middle-class families will also determine the demand of theme parks. According to the research of Global Industry Analysts, the international amusement and theme park market is likely to produce income of about US$32 billion by 2017 offering huge prospects for ABC Carnival to gain success through its expansion (Reportlinker, 2014). 3.0. Business Strategy The objective of ABC Carnival is to establish quality and full-service amuse facility. The goals comprise establishing about 10% market share in the first operating year and experiencing a modest increase in the gross margin by the end of the second operating year. In the next five years, the theme park will intend to enhance the customer base and business by about 15% and become one of the popular theme parks in entire Manchester city. The services of ABC Carnival will be to deliver the customers with superior entertainment experiences and long-lasting effects to persuade their likeness. Hence, the pricing of ABC Carnival would be charged at premium price according to the industry standards. The keys for accomplishing the business objectives and goals would be to generate considerable revenue without compromising the affordability of entertainment, to provide innovative products and sports, to ensure repeat visits of customers, to permit space for income for other retailers, to develop exciting working environment and to establish unique design with comfortable ambiance as per the customers’ preferences. 3.1 Sales Strategy ABC Carnival intends to provide a suitable venue where the entire family can enjoy their leisure activity by involving in fun activities. In this regard, the sales of the theme park will be supported by great services and will be offered at viable charges. 3.2 Marketing Strategy The customers of ABC Carnival can arrive from every age group comprising males and females. The customers can be local citizens or tourists. Due to this reason, the key focus of marketing would be to provide a reason for the visitors to stay in the park for a longer period and repetitively enjoy its services. 3.2.1 Products and Services As stated above, the individuality of ABC Carnival would be obtained by its marketing strategy of water theme. The key attractions will be wave pool, slow river and water cannon. The wave pool would be in square pattern having capacity of about 287,000 gallons of water. It is quite popular in every water theme park and tends to attract customer likeness easily. The slow river will have the capacity of about 13,000 gallons of water. In the slow river, the customers will be able to float along and enjoy the sun to gain utmost comfort. Previous approaches depict it as a strongly persuasive amusement for adult customer segment. Concerning the water cannon, ABC Carnival will provide two exciting waterslides, each having one tunnel and 20-foot drop over a 250-foot track. There will be two kinds of rides in ABC Carnival, for kids and for the adult customer group. For the customer segment focusing on children or kids, the rides will comprise small roller coasters and frog slides. On the other hand, for the adult customer segment, the ride will comprise a splash pool and an activity pool. Apart from various services, ABC Carnival will also provide fooding services to the customers. The food products of ABC Carnival will be classified into grill foods, snacks, salads, and beverages. The grill food items will comprise hot dogs, burgers and sandwiches among others. On the other hand, snack items will comprise pretzels, cakes, ice cream, chocolates and chips among others. In the beverage segment, ABC Carnival will provide soda, coffee, tea, soft drinks, bottled water and juices as suitable to attract the likeness of the customers. 3.2.2 Pricing Strategy Competitive pricing strategy will be applied in ABC Carnival. The regular entrance fee in the theme park would be £14 for adults and £11 for children. Special pricing will be provided to the members of ABC Carnival wherein the membership price will range from £200 to £350. Besides, food coupon will also be provided to the customers in order to increase the sales of food products. 3.2.3 Promotion Strategy The key objective underlying the promotion strategy in ABC Carnival will be to invest on the force of ‘word of mouth’. In every business, it is familiar that ‘word of mouth’ promotion is highly effective, especially when it comes to persuasive services. Accordingly, in order to promote the products and/or services of ABC Carnival, advertisements and public relation strategies will be used. Advertisement: As a part of its advertisement strategy, radio marketing will be used. About 10 second spots will be used for spreading the information regarding the theme park at persuade the local customers at the initial introductory stage. In addition, television advertising will also be used for announcing the services of ABC Carnival. The objective will be to position the message to the people regarding recreation, fun and customer service with immense importance. Brochures: Print media, such as brochures, will be used in order to inform the people regarding every activity of the theme park. This kind of advertisements will also be given in newspapers with coupons of discount, in order to increase brand awareness. Display Literature: A concerted attempt will be made in order to promote the business to different hotels, restaurants and retail shops with display literature. 4.0. Market 4.1. Industry Overview The overall attendance of the theme park in Europe was relatively static during 2012, soaring about 58 million visits to the top twenty theme parks. However, in the UK, the theme parks took considerable hit due to economic recession. Furthermore, in 2012, the chilly temperature, accompanied by non-stop pouring rain, also had an impact on amusement industry. In reality, considerable numbers of travellers have changed their holiday plans in the UK because of bad weather (AECOM, 2013). Irrespective of these hindrances, which can also be categorised as uncontrollable risks associated to the business plan, during the period from 2004 to 2009, the revenue of amusement industry in the UK increased by 27% approximately following a substantial increase in the admission rate that was account at around 12% in comparison to the previous year. The revenue growth surpassed the admissions as theme park operators added additional charges in order to enhance the income possibility from the visitors. Furthermore, people have also enhanced their spending on premium coupons for avoiding long delay. In the year 2009, the revenue of the theme park reached £315 million with admission of about 13 million visitors. The average income per visitors also increased from £20 in 2004 to £23 in 2010. Nevertheless, in present days, people have also become conscious with respect to expenditure (Bainbridge, 2010). The amusement industry has also promoted from sustained investment for innovation in order to persuade the customers to spend their holiday in the UK and make repeat admissions in the theme parks. According to the report of VisitEngland, holiday visits in the UK by local residents grew by 17% in the year 2009, where outbound tourism was reduced by 15%, which implied an increased capacity of the theme parks in the UK. Moreover, 23% of customers who visited the theme parks were repeat customers (Bainbridge, 2010). Since families are the key support for visitors of the theme park, peak sales activity comprise two key periods, during Easter and summer holidays. Thus, most of the advertisement efforts made by these theme parks can be observed as concentrated on those occasions. Besides, employment expenses are quite high in theme parks, representing about 20% to 33% of the individual income. In the UK, there are several attractions, which compete with the theme parks. Furthermore, there are less than twenty big theme parks in the UK, which have made the market more attractive for ABC Carnival (Bainbridge, 2010). 4.2. Market Trends By definition, water theme park is such amusement park, which features water based plays. These attractions arrive in the form of water slides, spray grounds, rivers, waterfalls, splash and fun bathing environment. In modern context, theme water parks are also equipped with various surfing environmental elements, such as pool, water slides and play courts among others. Presently, a trend of holidaying in domestic ground has encouraged the amusement industry in the UK (Mintel Group Ltd, 2010). 4.2.1. Target Market The target market of ABC Carnival is classified into four groups on the basis of age. These classifications comprise 8 to 15 years, 15 to 24 years, 24 to 35 years and 36 to 54 years. On the basis of psychographic variable, the target market of ABC Carnival will comprise children, teenagers, families, tourists and businesspersons. The theme park will attract people from Manchester along with the other cities of the UK. In the year 2006, the population of the UK was about 60.6 million, representing 7.5% increase from 1981 at 56.4 million. The population of the UK is currently increasing with rapidity obtaining strong growth in cities such as England, Wales and Northern Ireland among others. In England, the population was about 2.7 million in the year 2006. In England, the population growth of Manchester was highest than other regional cities (Dunnell, 2007). In the year 2011, the population of Manchester was about 503,100, signifying 19% increase than the previous year. The population of Greater Manchester, at that time, was about 2,682,500 (Confidential Publishing, 2012). As Apparent, these features are likely to reward in increased population bringing new opportunities for ABC Carnival. 4.3. Competitor Strategy ABC Carnival will differentiate itself by delivering innovative water rides. Since other amusement parks have become old with respect to use of technology, the new theme park will be able to attain competitive advantages by using new technologies and equipments. The uniqueness of the park will be acquired by concentrating on water theme with focus on the leisure activities. The theme park will also inspire tourism activities as it portrays the heritage culture of the UK in front of the entire world. The park will also differentiate itself from other competitors by providing attractions that are suitable for every age-group people. Particular consideration will also be provided to attract the family atmosphere. 4.4. SWOT Analysis 5.0. Financials ABC Carnival is seeking about £201,500 bank loan in order to execute the business plan. ABC Carnival intends to use the fund for improving and developing the theme park. Furthermore, the other funds will be used for the purpose of marketing and staffing. The owner of the theme park will provide about £75,000 to instigate the business plan. 5.1 Break Even Analysis Breakeven point is the level of sales where the company enjoys no gains nor incurs the risk of loss, as in this stage the revenue equals the expenses. It is assumed that the interest rate of loan will be 4.5% and the repayment amount will be £40,000 per annum for the constructed budget plan for ABC Carnival. Thus, the breakeven point will be accomplished at the end of the sixth year considering the repayment schedule of the loan amount. The following figure exhibits the breakeven point of ABC Carnival. 5.2 Projected Cash Flow ABC Carnival’s estimated cash flow analysis has been outlined in the following table, comprising expenses and increase in sales volume. 6.0. Problems and Fixes Several problems might be faced by ABC Carnival. The first problem is to distinguish the business to the customers. Since the park will generate revenue from selling the entertainment services to the customers, it must be capable of expanding its reachability to the key customer segment in an economically beneficial way. This problem can be fixed by executing proper marketing programs. The second big problem is to appeal and preserve competent employees. Competent employees are critical for the growth and reputation of the park. Thus, it is vital for ABC Carnival to develop a group of loyal workforce and to minimise turnover. Thus, this problem will be mitigated by ensuring good working conditions, delivering competitive pays and providing incentives. Ultimately, the third and most important problem is to retain the customer base. In order to ensure sustainability, ABC Carnival must retain a loyal customer base. It can be achieved by fulfilling the expectations of customers and performing in accordance with the requirements of customers. References AECOM, 2013. Global Attractions Attendance Report. 2012 Theme Index. [Online] Available at: http://www.aecom.com/deployedfiles/Internet/Capabilities/Economics/_documents/2012%20Theme%20Index%20Combined_1-1_online.pdf [Accessed April 04, 2014]. Bainbridge, J., 2010. Sector Insight: UK Theme Parks. Haymarket. [Online] Available at: http://www.marketingmagazine.co.uk/article/998079/sector-insight-uk-theme-parks [Accessed April 04, 2014]. Confidential Publishing, 2012. 2011 Census, Greater Manchester Gets Bigger. News. [Online] Available at: http://www.manchesterconfidential.co.uk/News/The-2011-Census-Greater-Manchester-Results [Accessed April 04, 2014]. Dunnell, K., 2007. The Changing Demographic Picture of the UK National Statistician’s Annual Article on the Population. National Statistics, pp. 9-21. Milman, A., 2007. Theme Park Tourism and Management. University of Central Florida. [Online] Available at: https://hospitality.ucf.edu/files/2012/12/Handout-B1.pdf [Accessed April 04, 2014]. Mintel Group Ltd, 2010. Consumers Queuing up for UK Theme Parks. Press Centre. [Online] Available at: http://www.mintel.com/press-centre/leisure/consumers-queuing-up-for-uk-theme-parks [Accessed April 04, 2014]. Reportlinker, 2014. Global Amusement & Theme Parks Industry. Industry Reports. [Online] Available at: http://www.reportlinker.com/ci02216/Amusement-and-Theme-Park.html [Accessed April 04, 2014]. Robinson, J. C., 2014. Innovative Trends in the Global Amusement Industry. Recreation Management. [Online] Available at: http://www.recmanagement.com/200501gc01.php [Accessed April 04, 2014]. Read More