The sports facility in Stratford-Upon-Avon - Essay Example

Executive Summary The sports facility in Stratford-Upon-Avon must show continued financial success to remain operational. At the same time, it must show a commitment to serving the community, by offering programs and activities that best suit the needs of the majority of residents within the community. Marketing programmes within the organization should reflect a commitment to meeting the needs of the members of the community in which the organization will serve. Therefore, analysis, both internal and external, should include members of the community, as stakeholders. It should also include the current position of the organization, available resources and identification of the organization’s core competencies or strengths. By assessing the organization’s strengths and weaknesses, the marketing team can develop a marketing programme that focuses on matching the organization’s strengths with needs of stakeholders. The sports facility is currently facing a recent loss of revenue, due to decreased sales of membership. To combat this phenomenon, the marketing strategy has made the decision to offer an all inclusive family membership, which can be used by any and all members of the family. The stakeholder analysis and market segmentation activities suggest that businesses in Stratford-Upon-Avon should consider the entire family, in this family-oriented community. The goal of the marketing plan align is to align organizational strategy with the marketing strategy, in order to reach the target markets, with a cohesive message that speaks to target segments. Target segments need to understand how the sports centre can benefit them. Situation Analysis The sports facility that once offered individual memberships is not as profitable as it once was. Membership has decreased, likely due to financial concerns and the current state of the UK and global economy. Singles, who do not have to worry about paying for more than one family member, make up a smaller percentage of memberships in the area. Stratford Upon Avon, in the CV376YY post code, is the birthplace of William Shakespeare and the location of Anne Hathaway’s cottage. It offers some tourist attractions and can be considered a tourist town. It is also the current home of world renowned chef, Gordon Ramsay. The town has a population of roughly 34,000, while the larger district in which it is located, Stratford on Avon, has a population of nearly 120,000. Less than 2% of the population is made up of students, with over 25% consisting of retirees (Calnea Analytics Limited, 2011). Nearby Birmingham, within 20 miles of Stratford Upon Avon, has a population of over 1 million, with just over 35% of that population made up of singles. Demographics suggest a wide range of ages of residents in the area. Due to the varying age groups within the region, it is important for a business that wants to succeed to meeting the needs of those market segments by age and lifestyle as well. Lifestyle is as important as age, because retirees live different lives than those with children, though they still look for value and accessibility in a sports facility. Retired couples may look for facilities to accommodate age related activities, which may be offered at a slower pace or with facilities set aside for older active adults. Families with children will want facilities that offer something for every member and desire family activities as well. Developing trends in the West Midlands of the UK include the increasing popularity of boxing as a sport and growing interest among 16 to 34 year olds, in table tennis. Football, cycling and swimming have benefitted from the development of sports programmes and mass participation events (Sport England, 2010). Overall trends suggest increasing interest in a variety of sports, for youth and adults. Competitive Rivalry Competitors in the region include the Stratford Upon Avon Golf Club, the Everyone Active Leisure Centre in Stratford Upon Avon (with many branch locations in the region, Wildmoor Spa and Health Club, Healthworks Fitness Club and Club Motivation. Of the competitors, only two, Stratford Upon Avon Golf Club and Everyone Active Leisure Centre, offer some type of sporting activity. However, the sports centre may compete with the other facilities, by offering different options in physical activity that customers might find more interesting and less repetitive. The sports centre must consider how each competitor may affect interest levels within target segments. It must also consider how those competitors may play a part in Porter’s five forces that affect the industry as well as the individual business. The Competitive Rivalry Diagram below indicates how competitors influence the sports centre. Competitive Rivalry diagram (Adapted from Kheng Guan Tho, 2011). GAP Analysis A GAP analysis is the difference or deficit between what the firm knows and what it should know. Sports centre marketers and decision makers may know what types of services or packages its competitors offer. What they need to know is the market share for each competitor, in order to set realistic marketing goals in gaining market share. In order to address the needs of potential customers, the sports centre must also know demographics of its competitors. Insights into how competitors market their product/service and promote offerings is crucial, in developing a competitive marketing strategy. According to Michael Zack (1999), businesses are increasingly becoming aware of the importance of knowledge. A simple diagram below indicates the type of knowledge gap that exists and what types of knowledge may be beneficial for re-launching the sports centre. PEST Analysis While the GAP analysis helps the sports centre gain a well rounded perspective of the competitive environment, the PEST analysis allows the firm to consider the other facets of the business environment that influence the marketing approach. The political environment includes community sports groups or committees, that determine the types of sports offered in community programs. If such sports are offered for youth, the sports centre may consider offering sports that are very different, to give youth more variety. It might also consider offering preparation for community sports, to its youngest family members. The political environment also includes relationships with other businesses within the community, which might influence potential customers’ decisions about the sports centre, in a positive or negative manner. Legal considerations include regulations that may affect the sports centre’s ability to offer youth and adult sports. The legal issues are affected by the political environment, when certified coaches or instructors are tempted to work in other facilities, due to higher wages or compensation packages. The economic situation affects consumers’ choices in many ways. When a slump in the economy occurs, many families reduce spending on leisure activities, such as sports activities or club memberships. For the sports centre, the objective may be to convince potential consumers that a family membership is a necessary expense, as it can provide a greater level of health and fitness for all. The social environment affects participation in or desire for participation in activities at the sports centre. When friends and neighbors are involved and can offer positive reviews of the centre, those who are considering membership will be more likely to join. The technical environment influences how the sports centre is marketed, as there are new forms of media that can help the organization increase awareness of the facilities offerings and new membership package. Social media, the internet and new mobile marketing techniques are all methods the sports centre may consider in developing its marketing programme. Social media is the least costly of the new technologies, in terms of promotion. A web site for the centre should include methods for customer interaction, to develop long term customer relationships. It must also be professional, yet easy to navigate and provide adequate information for those who are interested. SWOT Analysis Strengths of the sports centre include little competition in the immediate area. Within the region there are plenty of competitors, though few focus on being family-friendly. The decision to offer a family package for one price indicates a consideration for family unity and family cohesiveness. The organization understands that much of the population in the region consists of families or retired couples. A family package may be considered a great value to many consumers within the region. Weaknesses involve the lack of data regarding competitors. The sports centre must gain access to market data, to understand how or to what extent in can increase market share. In addition, some demographic information regarding competitor’s customers may provide a better insight into what customers are looking for in a sports facility. Threats include the ease of considering substitutes, such as with the Golf Club, Leisure Centre and health and fitness clubs within the region. Economic influences are a threat, when consumers cut expenses they consider unnecessary. A future change in area demographics, such as low birth rate and high rate of elderly population, may threaten the attractiveness of the family membership package. Marketing Goals and Objectives Marketing goals for the sports centre should be specific and measurable. They should also be realistic. According to the National Business Information Clearinghouse (2011), three major objectives of marketing efforts are increased revenues, increased awareness and increased market share. Offering a family membership for one fee should help increase revenues and market share. Direct competitors, such as the Everyone Active Leisure Centre and the Stratford Upon Avon Golf Club both offer very different types of services. For the sports centre to entice some of the customers of such facilities, the types of services and range of activities should be included in the marketing message. One specific goal of the sports centre should be to increase market share. A realistic goal, depending on market share of competitors, is 10% increase in market share within six months. As the re-launch will focus on family membership, it is not expected that revenues will increase at the same rate as market share. Therefore, a realistic goal for increased revenue should be roughly 5%. A specific goal in increasing consumer awareness is perhaps the most difficult to determine. One way to address the challenge is use statistical data for website visitors. Counters for visitors upon initial re-launching of the company website can be compared to the number of visits by three and six month intervals. When used in conjunction with internet social media sites, it can be expected that awareness can increase by ten thousand for web site visitors, at each interval. While this figure is not exact, it takes into account the number of youth and young adults in the region, who will share information with parents and friends. Target Market The target market consists of two very distinct segments. Families with children and retired couples are the main segments targeted by the single price family membership offering. Both segments are chosen, based on demographics within the region. Nearly 65% of the population in the region are not single and over 25% are retirees. Demographics for families include moderate or middle incomes to high incomes, at least one child of school age and either one or two working parent(s). They will live in or within a 20 mile radius of Stratford Upon Avon. Retired couples with a similar income, moderate to good health status. Using the Ansoff Matrix, as explained by Philip Kotler (nd) diversification involves consideration for youth sports and provisions for additional sports that are quickly becoming popular, such as table tennis. Market Development, selling existing products to new markets involves offering a family package, rather than prices for individual memberships. The new product is the family membership and further market penetration is expected to occur with the attractiveness to families with children and retired couples. Marketing Tactics The marketing mix begins with price. Cost plus is not an option for an all inclusive family Membership price. At least one competitor does offer a family membership plan, so the competitor’s price should be matched. With the finely appointed facilities available, the sports centre should be able to attract some of the competitor’s customers and those who might otherwise consider using the competitor’s facilities. Because the marketing programme aims to target families, social media sites will be utilized to increase awareness among preteens, teens and young adults, who may influence parental choices, when they are sound and offer a certain value. The company web site will be re-launched, to reflect a more family friendly environment and provide information on the new family membership. The reach of the organization is limited to a specific region. Therefore, additional channels for the marketing message include direct mail and email marketing. Site visitors will be provided with the option of receiving offers. The product will be sold in what can be considered a bundled format, which allows each member of a family to use the same membership. Groceries, local shopping centres and local sporting events will use a sales force, for promotion efforts. Sales force marketing tactics provide valuable information ‘through strategies that expose customers to the realities of what can be offered,’ according to Leigh Robinson (2005, p. 152). The selected locations are often places where families visit. Therefore, sales force efforts are more likely to be considered, when more than one family member is involved and one family member can influence another. Marketing Controls Startup costs for the re-launch of the sports centre include costs for new sporting equipment and reconfiguration of existing facilities, to accommodate new sports. Because the sports centre will turn some green areas, such as one of the football fields and two soccer fields, into outdoor tennis and indoor table tennis facilities, there is less cost involved than in building a brand new facility. Based on the proposed budget for Battlebridge complex, found in the October 14, 2010 edition of Surrey Today, startup costs will be roughly 1.6 million Monthly budgets include costs of utilities, equipment and facilities maintenance, cost of refreshments such as fruit and salad bars and drinks, salaries for coaches and facility instructors and monitors, accounting, sales and marketing, human resource and management staff. The purchase of sports equipment inventory, such as ping pong paddles and tennis balls/nets is also included in monthly costs, as much of the equipment will be purchased monthly or at regular intervals. The monthly cost is 145,000 pounds. Sales of memberships occur on an ongoing basis. However, families will be offered the option of paying for an annual membership or making monthly installment payments of 335 pounds. With a capacity to serve 20 families with two children at one time, with an average use of 16 hours per month, given 14 hours of operation each day, the sports centre projects a monthly membership rate of around 500 families per month, for roughly 167,500 pounds per month in sales. The centre will generate additional revenue of 15,000 pounds each month, through the sales of drinks, healthy snacks and personal sports equipment, if desired by members. The sports centre’s current market share is roughly 20%. It aims to increase market share to 30%, within the six month target and 35%, within the 12 month target. This figure is based on information provided by Sport England and a Mintel Group survey by Marketresearch.com (2011), on the growing trend in sports participation. It is necessary to put into place, some methods for counteracting or controlling the extremes in the business cycle, such as slumps and periods of above average interest. Just as Stone, Schluter & Stewart (1992, p. 34) suggest controlling the discount rate, as a means of adapting to economic changes within a nation, the sports centre can identify trends in slowing use or membership, by offering special promotions. It can also generate additional interest by organizing large community type competitive events, in which small fees for competitors are charged. In times when the facility is filled to capacity, the sports centre should take advantage of the additional revenue, by reinvesting in capital improvements or in local community sporting sponsorships, such as by supporting youth soccer leagues or by offering scholarships to select families with cases of financial hardship. Not only does this increase the likelihood of creating a more positive image within the community, but also meets an ethical obligation to give back to the community. Bibliography Birminghamuk.com, 2011, West Midlands statistics fact files. Available at [Accessed 10 March 2011]. Calnea Analytics Limited, 2011. Demographic data. Available at [Accessed 10 March 2011]. Kotler, P., nd, Ansoff’s matrix. Available at < http://www.learnmarketing.net/ansoffs.htm> [Accessed 10 March, 2011]. National Business Information Clearinghouse, 2011, Establishing goals and objectives. Available at < http://fgnw.natbic.org/index.php?id=15171&lang=en> [Accessed 09 March, 2011]. Robinson, L., 2005, The Challenge of managing customer expectations of sports services: A Theoretical approach. Loughborough University. Sport England, 2010, 35,800 more people playing sport in the West Midlands. Available at < http://www.sportengland.org/media_centre/press_releases/aps3_west_midlands.aspx> [Accessed 09 March 2011]. Stone, N., Schluter, W. & Stewart, W., 1992, ‘Controlling business cycle-discussion.’ American Economic Review. Vol. 12, No. 1, pp. 33-43. Available at < http://www.jstor.org/pss/1805400> [Accessed March 09, 2011]. Surrey Today, 2010, Battlebridge vision hits council hurdle. Available at < [Accessed 10 March, 2011]. Tho, K., 2011, Competitive rivalry Porter five forces business diagram. Available at [Accessed 10 March, 2011]. Zack, M., 1999, ‘Developing a management strategy.’ California Management Review, Vol. 41, No. 3, pp. 125-145. Available at [Accessed 09 March, 2011]. Read More