Evaluation of Current Strategy - Fulton's Ice Land - Case Study Example

?Fulton's Ice Land (Case Analysis) TABLE OF CONTENTS Section Evaluation of Current Strategy 3 Section 2: Recommendations 5 Positioning 5 Cost 8 Total Frequency 8 Revenue 8 Section 4: Specific Problem- Attitude towards business 9 References 9 Section 1: Evaluation of Current Strategy Analysis of Four C’s Consumer The current consumer profile that Fulton’s Ice Land is catering to can be segmented into three categories: Kids with an average age range of 8-14, Teenage Couples, Athletes Costs There are two types of programs- Hockey Programs and Public Skating Programs. The public skating programs require additional personnel costs, entertainment costs as well as promotional costs. The personnel costs has not been detailed in the case, but the recent entertainment cost and promotional cost was $12000. Communication The case mentions that hired rock music radio stations for advertisement as well as live entertainment of in-house audience Convenience The peak season is winter and the traffic is highest during Saturday-Sunday afternoon sessions. However, the Friday-Saturday evening sessions are less convenient and the daily noon time sessions have least attendance. Problem Recognition The current source of profit of the company is the hockey matches. Besides, the response for the weekend afternoon sessions is also good. However the Friday and Saturday sessions traffic is only around 50 to 100. The promotional efforts are ineffective because of mixed customer profile – kids and teen couples. Section 2: Recommendations Target Market The main problem lies in indecision regarding target market profile. The company is trying to target young adult market, whereas the traffic is most for kids. The highest turnout has been 200 with mostly kids and families, whereas the rink capacity is 700. The company caters to northern US city with a population of 450000. As per the case there are no immediate competitors. Therefore company should allocate its resources to develop and mature the already existing segment instead of trying to attract another segment. If the company can build a strong brand salience in kids section, then it can improve its financial statistics as well as consider expansion in teen couple sector later. Therefore the current target market estimate is: Total Population – 450000 % of Kids in U.S. - 20.2 (Central Intelligence Agency of United States, 2010) Potential Market – 90900 Positioning Primary Positioning (for kids) The weekend public session mostly consists of kids who have been dropped off by their parents for several hours. Therefore, the concept of entertainment as well as adult supervision should be the promotional point. The security features should be highlighted and the rink should be seen as a secure recreational zone for kids, and such positioning will help increase the consumer frequency during weekends. Secondary Positioning (for athletes) The secondary positioning can be done for athletes or sports loving personalities. Separate sports merchandise stands and organic food stands and expert skating trainings should be included for sport’s lovers. 4P’s Product The products should be mainly targeted towards kids consisting of kids’ movie merchandises. There can also be sports merchandise shops during the hockey programs. There should be a snack’s bar offering organic and fast food. Special events, competitions, and DJ shows should be organized for kids. Mini rides can be installed. Other facilities may include wireless internet and more developed acoustic systems for entertainment. Price The price for gaming will be $2 an hour and the price the tickets for toy rides can be $2 per ride-lot cheaper than theme parks or gaming zones. Unique membership programs should be introduced. These will include discounts on the food and toy rides. Besides members would be allowed one free guest pass for special events. The membership costs (entry level + skates) can be $10 and there will be 50% discount on rides and food and special events. There should be competent referral schemes for members. The special events and professional performances should not be less than $60 an hour. Non member rates $15 per hour. Promotion The promotional strategy should be: Internet Marketing As of 2010, 60.5% kids in USA are internet users. Therefore if online marketing tools are used then the reach will be (60.5% of 90900) 54994.5. The company should create an online website-average cost $689.50 (Alan Pattinson, 2010). The average maintenance cost is $39.95 (Diverse Network Associates Inc, 2010). Strategies such as email marketing, social media marketing are the most effective tools of advertising and also free of cost. Also the website ranking can be improved by using keywords in the website content. There are various websites offering free ranking of websites and popular keywords that boost ranking in search engines. Other Strategies Apart from radio, the company should use posters and billboards in front of schools, buses and neighborhoods. They can also use leaflets as an offline advertising medium. Besides word of mouth marketing and referral schemes can be used to increase customer base. Place The frequency of marketing activities should be maximum near schools, sports bars, theme parks, etc. The motive is to maximize visibility amongst the target customer profiles. Section 3: Approximate Cost and Revenue Analysis On the basis of the given data and the suggested changes, the cost and revenue analysis is as follows: Cost Acoustic Renovation - $5000 (approximate) Lighting Installed- $3000 Toy Ride Installation- $2851.1 Food Stall Construction - $500 *2= $1000 Website Costs = $1157.5 Personnel Cost=$1000 Total Cost = $ 13008.6 Total Frequency Assuming minimum target market coverage (1% of target market is achieved): 909 Target membership rate is 22% i.e. 200 people in the current year. Revenue Considering least skating time (1 hour per week) for 200 members = ($200*$10*12) = $24000 It is compulsory for members to buy tickets of at least two special events (at 50% discount) = ($200 *$30*2) =$12000 Considering least skating time (1 hour per week) for 700 non members = ($700*$15*12 hours) =$126000 Therefore, the minimum turnover per year is =$150000 Minimum Profit=$150000-$14008.6=$135991.4 Section 4: Specific Problem- Attitude towards business The main problem of Fulton’s Ice Land is too much concentration on economic benefits- Since there is no immediate competitor of Fulton’s Ice Land. Thus, there is no point in placing overt importance on economic benefits. Customers won’t be attracted to the rink if it lacks appropriate facilities or entertainment value. The recreational industry has grown over 10% in the last year and the key to success in this industry is not cheap pricing, but providing maximum fun and relaxation. Customers are willing to pay for facilities where they feel their time spent is memorable. References Alan Pattinson. Website Design, Promotion, and Maintenance. 2010. 2011 . Central Intelligence Agency of United States. "CIA World Factbook." 2010. Diverse Network Associates Inc. Web Site Design and Maintenance. 2010. 2011 . Read More