Strategic Marketing Plan for Six Flags - Essay Example

Strategic Marketing Plan for Six Flags Essay

1. INTRODUCTION

Six Flags is an amusement park that owns a considerable space of land and assets. There were more than 23.9 million people who visited the park from the year 2009. Six Flags owns various spots for fun activities, water parks, and fun parks in the US (Themeparkpost.com, Aug 30, 2012). The company started operations in the year 1961 by Angus Wynne. At the start, the focus was on themes, but today has hotels, fun activities, fun spots for people of all ages, and concerts at large.

The New York Stock Exchange has listed Six Flags as a public entity. Its shared office is located in New York, but the headquarters are in Texas. The body has 39parks in North America. The net income stands at over 13.14 million (2011) while revenue at over 1.013 billion (2011).

The company has both seasonal and permanent employees. Having limited cash flow means Six Flags has a debt of 120 million (Six flags, 2012). The company mission states: “Offering entertainment and creating great memories for visitors.”

The purpose shows how six flags serve as a center for family entertainment where people’s desires come to life. The vision statement declares: “Making customers delightful by offering quality services that meet people’s expectations.” Advancing its products and services shows the firm aims to be a world-class center for people’s entertainment

OBJECTIVES AND VALUES:

• Care for the surrounding by reducing waste disposal
• Come up with zero waste programs
• Standing on the frontline when it comes to recycling waste products

The values above enable the company to operate according to policy. They form the company culture and should be retained to enhance smooth operation against competitors. Six Flags does not compromise or change any of the values to please people within or outside (Six flags, 2012). The strategic marketing plan for Six Flags essay is a critical look into the entry.

2. ANALYSIS

A. EXTERNAL ANALYSIS

In this section, the reader gets to know the social factors, demographics, clients, those responsible for supplies, and the prominent competitors of Six Flags.

(I)PEST Analysis

In the United States, elections take place in November. The US does not have significant political changes that affect the economy. Tourists generate a lot of revenue for the nation, and US citizens encourage it. President Obama toured Disney world during one of his election campaigns near the Magic kingdom (Sarah K. Clarke, Jan 19, 2012). It highlights that the ruling class alongside citizens encourages tourism. At the moment, there are no political challenges affecting tourism unless the future poses a threat.

Social and Economic Factors:

Two major factors affect US citizens socially and economically. These factors include the following:

• People age with time: Age worries people of all races, and the USA is no exception. Starting the year 2000-2050, those above the age of 65 years need to increase by 135% (Joshua M Wiener, Oxford Journal). Those between 16years and 64years are likely to increase by 32%. The number of young ones visiting amusement parks will significantly reduce in the days ahead. Such external factors will affect Six Flags in the coming years (Joshua M Wiener, Oxford Journal).
• The middle class is getting more capital. There was a global economic crisis in 2008-2009, which only affected the high-income earners. The middle class remained balanced and heavily contributed to economic development at the time. It highlights that the GDP of a country relies on the middle class rather than the high-class individuals (Mario Pezzini, OECD, 2012)

(II)Porter five forces

• Rivalry

The US has five main parks, namely: Walt Disney, Cedar Fair, Six Flags, Universal Studios, and Merlin Entertainment. These companies provide different products and services to visitors. A good example is Disney and Universal Studios in Orlando, which offer tickets that differ with $4 or $5 during summer. Six Flags works with coke by giving discounts to those who bring coke to their office.

However, there are low chances of a return on investments and profits. Six Flags was sensitive to the market and improved their operations to attract various people to their premises (Doug Kerr, 2011).

• Bargaining power of customers

When economic conditions are right, it is easy to attract new people, but when the economy falls, companies find it hard to gain. Six Flags was first affected by the terrorist attack of 2001 and later, the global economic crisis of the year 2008 (Economic Times, 2001). Companies were keen to show their brand differentiation in 2009-2010 to prioritize their customers.

On the one hand, Disneyland admitted freely to birthday persons; on the other hand, Six Flags afforded a seven-day package cost of a resort at the rate of 4 days. Therefore, Six Flags has to gain clients, depending on the economy.

• Bargaining power of suppliers

Technology mostly affects the bargaining of suppliers in this industry. Suppliers look at the added features by theme parks before spending their money. Every year, the International Association of Amusement Parks and Attractions (IAAPA) carries out a convention that displays modern technology, allowing companies to bid favorably (IAAPA, 2012).

• Threat of substitutes

Competitors are a great distraction in the entertainment sector. For differentiation, Cedar Fair provides engagement activities that bring people together at the park. Disney has a large cruise ship that elevates it above competitors. Therefore, potential customers may prefer such competitors who amuse them or other amusing sections like botanical gardens, cultural centers, and multiplexes. Six Flags has the challenge of improving operations to overcome competitors in the tourism sector.

• The threat of new entrants

Attaining success in the entertainment industry does not come easy because the fun comes in different packages by different service providers. There is a massive investment in the industry, and people must recognize the providers.

Some companies such as Hard Rock Park have gone broke despite establishing themselves on the market. The only place where new entrants succeeded is Hong Kong Disneyland. Therefore, there very few possibilities for new entrants in the new market (Pierson K Weber, 2012).

B. INTERNAL ANALYSIS

(I) Value Chain Analysis

They are splitting those who manage operations with value-generating undertakings known as value chain analysis helps in understanding the competitive advantage and shareholder value of the firm. Primary and secondary activities will be analyzed separately.

Primary activities:

• Operating the business: Six Flags has highly skilled employees who are friendly with customers. They are multi-talented and amuse guests. The environment is naturally according to the plan of operation, and the atmosphere is welcoming to guests. Maintenance and recycling take place occasionally on the premises.
• Marketing services and generating sales: the most used means of promotion by Six Flags are by word of mouth. The others are advertisements and campaigns. Six Flags organizes special events for special times like the Olympics, FIFA, and significant celebrations such as the New Year and Christmas. It holds the promotion of services and products alongside Coca Cola.
• Service: their services aim at family and children entertainment. Customers get a 20% discount when they hold a lodging facility in Great Escape, a resort of Six Flags (Joshua M Wiener, Oxford journal).

Support Activities:

• Transport and communication system: the business infrastructure is made as per the standards of government and is up to date. A substitute energy source carries out the energy-saving policy. Six Flags prioritizes the safety of customers.
• Procurement: the themes Six Flags uses in the US also appear in other countries like Canada and Belgium. Topics are essential attractions for six flags. They export Chain components and steel apart from the importation of products from Germany and the United Kingdom. To come up with new designs and products that attract people, Six Flags hires people from different countries across the world.
• Human resources management: to overcome the cross-cultural issues that arise in the workplace, Six Flags recruits people from different parts of the world. The HRM team approaches the hiring process in an organized manner. Different people working in the company help one another to understand the objectives and values.
• Technology development: Six Flags has its unique and advanced technological features. Having an alliance with Tatweer will attract people who love music in the park. The management team comes up with development plans such as developing its beach resorts, acquiring land and recreation parks on the coastal side of the USA (Oswald A Mascarenhas, 2004).

Internal Strengths and Weakness

Strengths:

• Six Flags came up with a strategy of having its theme parks in every 150 miles of America that covers about 67% of the US population. This strategy is the greatest strength of the company.
• Six Flags defines and maintains the relationship between financial measures and the loyalty of customers. They can foresee the time it takes to get returns on investment.
• Having a license with a famous entity like Warner Bros DC Comics helps the body reach children with ease.
• Six Flags has alliances with fast-food restaurants and convenience stores, and that enables an all-round entertainment section inside the same place for guests.

Weakness:

• Customer loyalty reduced when they had an unexpected breakdown of roller coaster and accidents which took place in the last two years.
• The attitude and morale of Six Flags staff seem low due to the sacking of five managers in the recent past.
• Some of the popular rides such as batwings and raging bulls take place when there are few customers.
• Additionally, the firm shows less interest in maintaining cleanliness when compared to other competitors like Disney and Cedar Fair (Miriam Marcus, 2008).
• The current challenge is such that; there are excess investment and technology at the same place. It led to Six Flags losing its status and financial growth in the market. Failing to control the cash flow made it suffer during the global economic crisis.

To manage its debt, the company convinced shareholders and sold some properties. Jim Anderson is the new CEO who was appointed in 2010 to push the Six Flags to maintain cash flow with a new board of directors.

• STRATEGY FORMULATION: ALTERNATIVES

(I) Market development: Finding an Asian Partner

After the founding in 1961, Six Flags concentrated on American soil for a long time. It was reluctant to open hands to the wave of globalization affecting the world. Experiencing bankruptcy and the inability to maintain cash flow hindered growth over the years. It was surpassed by its competitors who entered the market and started making profits.

Venturing on the Asian market became a high risk the management and owners were reluctant to make. Six Flags is not familiar in Asia; hence establishment is an enormous task that requires one to plan adequately.

Foreign Direct Investment (FDI) is necessary for the firm to improve its financial ability and position on the market. The best tourist attractions across the world are perfect places to invest in the company’s capital. Disneyworld and Universal Studios are the main competitors on the market since they entered the Asian market at the beginning of the 21st century.

Walt-Disney started in Tokyo and Hong Kong while on the other hand, Universal Studios began to in Japan and Singapore. The way these big companies did is the same way Six Flags can enhance its position in Hong Kong and Asia at large.

People continue to love computer games as a result of improved technology and software development. Having an amusement park switches their entertainment to the real world. In the park, we have real objects and games which allow people to interact with one another to the maximum. There are many reasons why investing in the Asian market is profitable. They include the following:

• More than half of the Asian population cares about outdoor activities in the form of entertainment (Sports week, 2010). Their ideas continue to expand due to technological advancement. The company can capitalize on the vast Asian population and invest heavily to reap profits. Asian people love art, and amusement parks are part of the art.
• 40% of the world’s wealthy people live on the Asian continent (London Times, 2011). Six Flags can capitalize on the economic condition on the Asian continent to increase their profits and pay all debts. China, Japan, and Singapore are the perfect places to establish theme parks in Asia. Many Asian people can afford quality entertainment in the form of amusement gardens.

Factors for starting a theme park in a new country:

• The price of starting in a new country is very high. The business must pay taxes, and any cost to safety operates on a foreign market
• The rule of law in that land needs to be flexible. When the company is cannot operate for not meeting specific requirements, it is hard to get away with it
• A partner is necessary, especially in the Asian market. The reason is the financial risk involved in setting up the business on foreign soil. Oakwood or Media Asia Entertainment forms the best partner in that sector. The two are experienced on Asian ground, having existed for more than 50 years and completed big projects relating to tourism.

(II) Product Development

The roller-coaster drives enable Six Flags to cut prices with the use of technology. According to the people, the best roller coaster drives include wild one, batman batwing coaster, and sky-coaster. Innovation is the key to progress in the world today. The companies which employ innovation to gain a competitive advantage are Cedar Fair and Walt-Disney (Fox news entertainment, 2010). Over the years, these parks have improved their services to attract customers consistently.

Six Flags keep using old ways like wildlife shows, roller coaster drives, and Animal kingdom. Stability on the US market can only come by when Six Flags changes its services from time to time. Six Flags can come up with more indoor games and other games that inject more fun into the place.

The company holds the record for the largest amusement park of 135 acres. Customers need new thrills to their experience in the park. Some of the latest games are as follows: 3D football, 3D golf, 3D bowling, and adventurous island. They are essential to make the place lively because most people who visit the site are youngsters and teenagers.

New technologies will help to control the cost of the Six Flags. The fees which were initially high are quickly cut down by technology. Many operations go on online, and the people have adequate entertainment, which is updated. When introducing new features, some factors are crucial to the process:

• sufficient land hence enough space for guests to interact and have fun
• setting safety measures. Health is the first consideration when guests enter the park
• modern game designers, and software developers are needed to bring about innovation

Prioritizing the strategy:

All those strategies help to maximize profits. However, finding a stable partner is a better approach when compared to using new technology. The Asian market is an entirely different setting where people have different expectations compared to the US market. The firm has few ideas about Asian culture hence cannot venture alone without consultation.

Finding an Asian partner is most prominent among the many approaches. A right partner will open their eyes to new realities in Asia. Using modern technology may take a long time to create profit and achieve targets. The service has to be worth the cost. Technology is expensive when starting because one has to hire the best people to handle available tasks. I recommend that Six Flags uses a new partner to get into the Asian market. The use of modern technology is a secondary goal that comes later when the business has settled in the area.

• STRATEGY IMPLEMENTATION

To implement the above strategies, one must use a marketing plan, cost-benefit analysis, and HR plan. (I) Cost-benefit analysis

It refers to the process of evaluating the business entity partly to determine the cost. One can find out whether the business is worth the value of an investment using cost-benefit analysis. It also opens up about the company to the audience. The following is a financial chart for the first year for the development of a theme park in Hong Kong.

The park is a favorite for many people in Asia such that more than 10 million people visit every year.

S. NO|COMPONENT REQUIRED|TOTAL|1| Our Asian Partner Oakwood, the one is leading in infrastructure and entertainment, shall give the land.

|2|Starting cost for investment| USD$ 1 Billion

|3|Foreseen Attendance during the First Year| 2 Million people

|4| Estimated Cost of ticket/person| USD$60

|5|Estimated Income| USD $120 Million

|6| a)| Fixed Expenses = The price of construction + Worker’s wages+ Conservation| USD $30 Million| b)| Changing price=logistics+ Shipping+ Unpredicted Accidents+ Assurance+ Marketing| USD $30 Million|

|7| Estimated annual profit| USD $60 Million ($30 Million for six flags $30 Million for Oakwood)|.

(Six flags Texas, 2006) Below is an analysis of Six Flags for its new entry into Hong Kong. Through this close examination of the firm, we can conclude that the starting cost can return profit within two years of operation. The flow of cash is steady enough, and all debts are paid soonest to avoid inconvenience in service. Those who hold shares in the business get 15% annually, while investors who inject more than 10 Million get 40% off Six Flags stocks.

Factors Why Hong Kong is the perfect place:

• The town is widely known as a tourist attraction with more than 10 million visitors every year. Worldwide recognition is enough to drive companies into the area. Many people wish to visit the region and take part in entertainment activities
• Tourism is encouraged in Hong Kong because it is one of the revenue generators for the nation. Hong Kong is not massive enough for other industries, such as the Agricultural sector. Therefore, flexible and informal sectors help it improve the GDP
• Hong Kong offers incentives to the entertainment sector to attract foreign people. The laws are friendly to give foreigners a chance to make profit
• Additionally, it gives Six Flags the option of taking away 70% of the profits while the rest becomes reinvestment in the same economy (Hong Kong Discovery, 2011). This law is favorable to foreign investors like Six Flags and Disney.

Benefits of Six Flags to Hong Kong

• The local people in Hong Kong get employment opportunities since amusement parks add to the entertainment industry. The talented people of Hong Kong can be employed in the gardens to offer skilled service to the guests. Amusement in the park needs experienced artists who do not disappoint guests. Great designs increase the cost for a ticket to the park
• The presence of an amusement park improves the living standards of the people in many ways. The area generates income from taxes and selling other products to those who visit Hong Kong
• Residents on the Asian continent no longer have to travel to the US to access Six Flags and have fun. When the fun is closer to Hong Kong, the natives save cash.
• People can enjoy life in real-time entertainment worlds other than the cyber world. Parks bring both mature people and children to reality
• Hong Kong people’s perspective is changed since they interact with new forms of art from the Western world. They know Europeans and Americans better to enhance business operations between the races.
• Having Six Flags in Hong Kong makes use of the natural resources available to give people an artistic view of the world. Utilizing nature preserves it to a great extent because every plant or animal requires tenderness and care
• They were coming up with free lands where trees and flowers give the people a natural environment. Many tree species are planted for study by individuals who come from different parts of the world.
• Entry into the Hong Kong market shows the social responsibility Six Flags has in the entertainment industry. Expanding operations means the company is up for the challenge in a new market. People in Asia can see how Americans have fun. In addition to that, cultural exchange between races brings people together. Asians are ready to meet the cost of quality engaging activities.

(II) MARKETING MIX

It refers to the “Having the right item in the correct place, at the right time with the right cost.” It means that the marketing mix has everything to do with the item, place, cost, and promotion.

PRODUCT

Six Flags aims to offer the product according to the expectations of the citizens of Hong Kong. The products include:

• Roller coaster drives are unique and perfect on the new market
• There are standard divisions such as Roller coasters, wildlife shows, and Animal kingdom but Six Flags looks at opening a new sector at an affordable cost
• An island of adventure teenagers and middle-class people can help themselves with paintball shooting.
• Other additional features are garden fantasies and street dance
• In its products and services, Six Flags shows the culture of the Western world and the American people with the use of music and dance
• Six Flags can use some games to display its technological advancement over competitors on the market. Some of them include 3D golf and 3D racing
• Persons with disabilities get exclusive products and services which suit them
• The business is an all-time family entertainer.

PRICE

Six Flags must be sensitive about their pricing because other world-famous companies like Disney and Ocean Park are already operating in Asia. Tickets will be categorized into four categories, as follows:

• One-day ticket
• Two-day ticket
• Night tickets
• Additional tickets for resorts and hotels

The expected cost is given below in consideration of stiff competitors such as Disney and Ocean Park:

• One-day ticket: Given in three segments which are for young children, the middle age and the old age. The cheapest ticket goes for HK$100 for the senior nationals, while the highest price is HK$399 for middle-aged people.
• Two-day ticket: also offered in three categories where the children get the lowest cost of HK$355, and middle-aged people get HK$499. The entity has many entertainment zones; hence it is not easy to experience each game in a day. 2-day tickets help the guest to enjoy the games to the maximum.
• Night tickets: the standard cost remains at HK$259, and kids under the age of 3 years are not allowed into the show. Cultural dance, laser lights show, and street dance are significant events during this show. These night shows are organized near seashores to enable visitors to see the beautiful view of Hong Kong at night.
• Hotel resorts: to reach business people and families, Six Flags plans to offer resort prices in both extremes. The minimal cost for a family for a garden view resort is HK$1550, while premium business customers pay at the rate of HK$1800-2500. The tickets can be purchased online with the help of the firm and other tourism websites. Tickets are cheaper when customers book 30 days earlier.

PLACE

Six Flags has a great partner in Oakwood, which is the largest entertainment company in Asia. The land to be used is 40 acres located nearby Avenue of stars and Hong Kong Convention and Exhibition Center. The place is a famous center for tourists from all over the world. It is surrounded by sea and shores on both sides. The Big Buddha statue is on the north while Temple Street Night Market to the south. The place is not hot and has a cool breeze from the ocean, which gives people a friendly atmosphere to enjoy.

On the 40 acres of land, the Six Flags can have a parking space for more than 1500 cars a day. Inside the park, recycling plants are necessary to recycle the water used for playing indoor games. Planting trees is another step that enables the place to have a natural outlook and to bring rainfall.

PROMOTION

Promotion in the entertainment sector has the same significance as the establishment. There are numerous opportunities to promote the business entity. Oakwood helps in development through TV advertisements and theatre advertisements. The people of Hong Kong show a keen interest in music. Oakwood owns a theatre for the musical, and fashion shows hence are useful in enabling Six Flags to reach new customers on the market.

Another way to promote Six Flags is through the creation of android games for mobile phones in the name of thrills found at Six Flags. Six Flags can also develop social media engagement and organize marathon races to promote its operations. Additionally, the DVD and photos of guests will be sent to them after they visit Six Flags for the first time. This kind of promotion will enable the business to reach the minds of native people in Hong Kong and other customers around the world.

(III) HR PLANS

John W. Baker serves in charge of progress for the establishment while Liz Hirsh Naftali of Oakwood will be head of operations. The two are the most critical person when it comes to services on the market. Six Flags will then hire both full time and part-time employees.

The staffs in charge of management serve as full-time employees, while ordinary employees are seasonal. People from Asia and America have higher chances of employment when hiring employees to fill vacancies. It helps to balance the culture of Asians and Americans alongside the Europeans.

Lastly, a training institute is crucial to equip part-time workers with skills for the workplace. One of the lessons is on how to behave in the presence of customers and how to serve them. The older people, the disabled, and children are not left behind because there are volunteers and service-minded people who help organize the place and people.

I highly recommend Six Flags to implement the strategies mentioned above to regulate cash flow and regain its status on the market. The implementation of these strategies will increase the market share for Six Flags.