The Promotion of London Eye as a Global Tourist Attraction - Case Study Example

Company Background The Merlin Entertainments London Eye (known more simply as The London Eye, and also known as the Millennium Wheel), at a height of135'metres (443'ft),1 it's the tallest cantilevered observation wheel in the world, rising high above the London skyline. The Merlin Entertainments London Eye isn't just one of London's top tourist attractions, it's an extraordinary piece of engineering design and architecture. 2 At the time it was erected, in 1999, it was the tallest Ferris wheel in the world, until it was surpassed by the Star of Nanchang (160 m) in May 2006, and then the Singapore Flyer (165 m) on 11 February 2008. However, it is still described by its operators as "the world's tallest cantilevered observation wheel" (as the entire structure is supported by an A-frame on one side only).1 PESTLE ANALYSIS PEST analysis is a useful business tool for understanding the "big picture" of the environment in which a business operates and the opportunities and threats that lie within it. By understanding the environment in which the company operates (external to the company), advantages of the opportunities can be taken and the threats minimized. Specifically the PEST or PESTLE analysis is a useful tool for understanding risks associated with market growth or decline, and as such the position, potential and direction for a business or organization. A PEST analysis is a business measurement tool, looking at factors external to the organization. It is often used within a strategic SWOT analysis (Strengths, Weaknesses, Opportunities and threats analysis). PESTLE is an acronym for Political, Economic, Social, Technological, Legal , Environment factors, which are used to assess the market for a business or organizational unit. The PEST analysis headings are a framework for reviewing a situation, and can also be used to review a strategy or position, direction of a company, a marketing proposition, or idea. This analysis is used for business and strategic planning, marketing planning, business and product development and research reports. It is important to clearly identify the subject of a PEST analysis (that is a clear goal or output requirement), because an analysis of this type is multi-faceted in relation to a particular business unit or proposition - if the focus is diluted an unclear picture is produced - so the situation and perspective has to be clear when PEST is used to analyse. A market is defined by what is addressing it, be it a product, company, organization, brand, business unit, proposition or idea. So it should be clear as to how the market is being analysed. The PEST subject have a clear definition of the market being addressed, which might be from any standpoints like a product looking at its market.3 So let us look at LONDON EYE and its prospects of increasing its popularity not just in Britain but as one of the most popular global tourist attractions SCOPE This paper will be using the PESTLE or PEST tool to present the external environment affecting the promotion of London Eye as a global tourist attraction. The project needs to make use of at least two elements of the PESTLE Analysis tool. The political/governmental and technological elements will be discussed for the purpose while the environment and corporate social responsibility will also be touched upon. There's absolutely no doubt London Eye is steadily gaining popularity. According to31st March 2009 issue of DESTINATION, a tourist magazine London Eye has been voted Britain's top tourist attraction. Bev Fearis the writer says, "London Eye along with Cumbria's Lake District and Blackpool Tower has topped a poll of the destinations and attractions that Brits would choose to promote to overseas visitors following a survey of 1,000 people conducted at the Best of Britain & Ireland 2009 event in London. The event formed the grand finale to Visit Britain's British Tourism Week, which aims to raise national and international awareness of the size, value and importance of Britain's tourism industry."9 London will be the venue for 2012 Olympics. The marketing plan needs to leverage this major event to give a boost to popularizing London Eye and increasing awareness of it as a tourist attraction not just to Brits in particular but on a global scale. WE also need to remember the Eye is entering its 10th anniversary from January 2010 though officially it was opened to the public in March 2000. While there are various promotional schemes already in place to promote London Eye it needs to be seen how it can be done with a sharper global perspective. The 10th anniversary is an ideal juncture to kick start the promotions with certain innovations incorporated into the existing marketing schemes. It would also serve as an excellent run up to the 2012 Olympics. Technological Factor The London Eye is not just one of the top tourist attractions of London it was a piece of daring innovation and revolutionary design which combined the best of British design, architecture and engineering with an exceptional team of experts.2 "The Eye was first conceived as much more a landmark or attraction. It was meant to be a symbol of technological and design excellence in the new millennium, to provide a new development within a specific London area."4 As a symbol of regeneration The London Eye represents the turning of time, celebrating London's past and looking into the future.5 The other technological edge the Eye has is the introduction of 4 D experience of the flight for customers. " The movie will be seen by four million people a year, and screened in a purpose-designed theatre in County Hall, adjacent to the Merlin Entertainments London Eye's welcome space, ticketing area and catering facilities." 2''''''''' This gives this attraction the necessary edge and a great strength. "The perfect prelude to a flight on The Merlin Entertainments London Eye, our new 4D Experience is a groundbreaking 3D film with spectacular in-theatre effects including wind, bubbles and mist to add a breathtaking fourth dimension." 2. Multi media marketing Tool: Above all the non-dialogue approach of the film is a sure hit for tourists from anywhere in the world. This needs to be put onto the internet to attract more tourists from across the globe True to its hi-tech image the Eye has "established a comprehensive webpage to provide extensive information about the attractions to visit in London. It also offers functionalities like online booking and payment. The philosophy has been to offer value adds on the webpage such as: ticket reductions(5%) dinner or drink vouchers, musical tickets etc done only on internet. This helped increase the traffic on website, attract more customers and earn revenues by experimenting with business opportunities. Internet Promotion: By having on-line Quiz competitions during the 10th year could also increase traffic. Winners could be flown in by British Airways. Further more The Eye has established e-partnerships with museums, restaurants other attractions and theatres. The Eye has optimized sales through e-partnerships and has benefited from business expansion as it receives commissions from from its partners. It is also getting a stronger competitive foothold through better pricing strategies than others in the market. For example it is able to offer tickets for Modern Tate museum for nearly the price of one attraction."4 .Promotion:If extended as a package for 2-3 attractions together it would boost its international tourism. During the Olympics it could perhaps tie up even with Scotland,Wales and Ireland to attract overseas tourists who may have visited England but not the rest of UK. According to Mrs Eleanor Harris Marketing Manager of London Eye "more than 1/3 of the customers visiting the London Eye are buying the Eye via the internet, which is expected to increase over the coming years(reaching 50% margin) as customers get a better price on the internet and also escape the queue for buying tickets. According to a survey conducted by the Tourist Board UK in May 2003 80% of the total number of tourists visiting London rank the Eye as the most attractive activity in Central London According to the same survey 90 % coming to London research the net for information prior to arrival. The penetration rankings among tourists are lower." The key success factor has been the development of a website as dominating the marketing of the Eye. The e-partnering constellation have made it possible for the Eye to attract more customers with minimum effort.4 Tie-ups: During the 10th Anniversary celebrations a tie up with British Airways and offering packages to customers where Merlin Entertainment has other ventures across the globe would also increase tourist inflow. Promotions through complimentaries and souvenirs:For the 10th Anniversary and the 2012 Olympics Tussauds waxwork expertise could be used to make London Tourist attraction wax mementos as gifts for winners. This would bring in some interest to the marketing campaign. For Merlin Entertainment this could perhaps be another venture to bring in revenues. Political Scanning Will the London Eye have any political/govermental threats' On 20 May 2005,The supposed rent row raised by South Bank Centre (SBC)'- owners of part of the land on which the struts of the eye are located'- had served a notice to quit on the attraction along with a demand for an increase in rent from '64,000 per year to '2.5 million, which the operators rejected as unaffordable.6 On 25 May 2005, London mayor Ken Livingstone vowed that the landmark would remain in London. He also pledged that if the row were not resolved he would use his powers to ask the London Development Agency to issue a compulsory purchase order.[12] The land in question is a small part of the Jubilee Gardens, which was given to the SBC for '1 when the Greater London Council was broken up. The South Bank Centre and the British Airways London Eye agreed a 25-year lease on 8 February 2006, after a judicial review over the rent row. The lease agreement meant that the South Bank Centre, a publicly-funded charity, would receive at least '500,000 a year from the attraction, the status of which is secured for the foreseeable future. Tussauds also announced the acquisition of the entire one-third interests of British Airways and the Marks Barfield family in the Eye, as well as the outstanding debt to BA. These agreements gave Tussauds 100% ownership of the Eye and resolved the debt from the Eye's construction loan from British Airways, which stood at more than '150 million by mid-2005 and had been increasing at 25% per annum.7 Presently there is absolutely no threat to its existence on the present site. The rent issue is not just resolved but every effort will surely be made by the Government to attract tourists to this phenomenal tourist destination as part of the Olympics promotion efforts. In fact the London Eye was an important factor in securing the bid for the 2012 Olympics. Further more Merlin Entertainments has invested substantially in community measures for the area which would fully ensure no such threats would recur. That brings us to the company Corporate Social Responsibility. Social Responsibility The Merlin Entertainments London Eye has played a key role in the redevelopment of the South Bank area, creating 315 jobs. Since opening in 2000, the 3.5 million visitors that the London Eye draws to the South Bank on average every year has provided a huge boost to the local economy which has lead to many more businesses opening in the vicinity such as shops, bars and restaurants. We are committed to making a continued contribution to the long term development of the area. Since opening in 2000, we have forged partnerships and invested in projects in the following three fields; development of open spaces, arts sponsorship and education.2 Merlin Entertainment is presently the sole stakeholder as against the earlier three -British Airways, the architects David Marks and Julia Barfield and the then Tussauds. This certainl is a great advantage. The more thestake holders the greater are the difficulties in dealing with governmental / political pressures. This being a prestigious issue for the government London Eye stands to gain now. The bitter experience of 2002 would make it seem a threat but in today's context London Eye will not only get strong but every possible political support with the Olympics coming up. Tie ups with the Olympics Authority will go a long way in promoting London Eye as an Olympic attraction. London Eye could get involved is some Olympic Water sports events on the River Thames for PR mileage. Though British Airways is no longer a stakeholder, BA is definitely going to use the opportunity to promote its sales for the Olympics. London Eye would definitely be one of it selling points. Firstly because of its association by giving The Eye its name in the initial stages and secondly because its association with such a prestigious landmark. British Airway has a very strong brand presence in the global market. It would be an excellent marketing strategy in tying up with British Airways. Environmental Factor Every precaution is taken with regard to environment issues by Merlin Entertainment. In its effort to build up an image of a socially responsible corporate citizen. As part of the on going environment watch they have: introduced a new LED lighting system on the London Eye which save 69% more energy than the previous system invested '12.5 million in a capsule upgrade project which will reduce electricity consumption and the use of refrigerant gas in the climate cooling system by 20% joined the Mayor's Green500 scheme to improve our environmental credentials in conjunction with other businesses installed water-saving units in washrooms recycled all office paper reduced printing to where it is absolutely necessary and on double sided paper installed new hand dryers that use 83% less energy and dry hands twice as fast Other Environment initiatives Section 106 As part of the original planning agreement the London Eye paid a capital agreement of '1,550,000 for improvements to Jubilee Gardens and Queen's Walk. As part of the London Eye's ongoing commitment to the local area, 1% of revenue is donated back into the community, part of the London Eye's original planning permission, known as 'section 106.' Section 106 monies pay for key positions such as the Public Realm Manager for the South Bank area, security patrols in the area, and for initiatives to make the Southbank a cleaner and safer area for visitors. A proportion of the amount donated each year is put into a Community Chest for which local charities can make applications. 2 This will go a long way in building goodwill amongst its publics. "For The Merlin Entertainments London Eye, Corporate Social Responsibility is an essential part of our work. We have looked at the best ways to make real and lasting changes to improve our business and shape the way we treat our environment and support our community. At the London Eye, we are committed to corporate social responsibility. We work with numerous, diverse organisations to ensure that best practice is delivered in the key areas of community, the workplace, the marketplace and the environment" David Sharpe, Managing Director 2 The goodwill earned by involving themselves in such initiatives will definitely help this PR conscious company achieve its goal of making London Eye a top world tourist attraction Other Promotional ideas to use in the 10th Anniversary celebrations : A well designed marketing plan is already in place to build up goodwill amongst the various segments of its customers. Promotions on Mother's day , Valentine's Day, for the visually handicapped, just to take a few examples, are well in place. For the 10th anniversary celebrations the innovations that can be introduced in these promotions: On Mother's Day mothers names starting with "L" (L for London Eye) or every 10th mother coming there could be given a voucher, a gift or a complimentary ride. On the International Day for the Blind ten visually challenged decided on the basis of their names starting with L can be given a free ride On Valentines Day both of the couple whose names start with "L" could be given a capsule to celebrate their engagement / or 10th wedding anniversary. The same schemes could be adapted during the Olympics promotions selecting different countries according to their Independence Days or launch promotions in 10 countries where Britain has had close associations or the longest history of colonization. Conclusion The PESTLE Analysis After examining the different PESTLE factors(Political, Tecnological, Social , Environmental) in relation to London Eye's business environment it is very clear it's a very opportune time to build up tourist traffic to this great tourist attraction. The 10th Anniversary celebrations, 2012 Olympics are the biggest opportunities available now. Strengths like a strong and innovative marketing campaign already in place, the unique 360 degree panoramic perspective of all tourist attractions around London Eye, the technological edge as well as e-marketing strategies in place London Eye is poised to make a breakthrough in rising to be among the most (say 50-100) popular world tourist attractions. For where can you have such a unique experience of seeing a host of tourist attractions in a capsule(nutshell) from a capsule and yet being within a capsule. References 1. "Interesting things you never knew about the London Eye". London Eye. http://www.londoneye.com/ExploreTheLondonEye/InterestingFacts/Default.aspx.' 2. website: www.londoneye.co.uk 3. http://cipd.co.uk/subjects/corpstrtgy/general/pestle-analysis.html 4. Case Study: The London Eye conducted by Rambell Management ,Denmark 5. The essential Guide of British Airways London Eye published in 2000 6. BBC NEWS | England | London | London Eye given eviction notice 7. BA sells stake in London Eye to Tussauds for '95m | Business | The Guardian 8. blooloop article:"4 D takes London Eye to a new Dimension". 9. Destination , March 2009 issue Read More