SHREWSBURY MARKETING REPORT 1 Report Marketing Plan for Shrewsbury University: Victoria University (Footscray Park) Department: College of Business Name of Student: John Farrell and Shea Hands-Otte This report was requested by: Dr. Rosa Rios Date of Submission: October 14th, 2016 SHREWSBURY MARKETING REPORT 2 1. Executive Summary Located on the western border of England, an approximate 22-minute drive to Wales, Shrewsbury is a quiet countryside town known for its historical architecture and local shopping boutiques. This marketing plan will present a vision for the improvement of overnight visitation in this area of Shropshire as well as the promotion of economic growth in the United Kingdom as a whole. A hot air balloon business, Reaching New Heights, will provide the vehicle to accomplish these goals. The plan will discuss the development of a unique partnership with accommodations in the area, as visitors will be treated to Shrewsbury’s small town charm while given the opportunity to witness the beauty of the countryside from a bird’s eye view. In order to effectively tailor the marketing plan for Shrewsbury, the plan will focus on couples aged 45 years or older, who would be considered day visitors to the region. Couples of this age are most likely to appreciate the quiet nature of the area, while looking for an adventure to check off their ‘bucket list’. Although there is not much competition in the hot air balloon industry within the Shrewsbury area, the size of the town still allows the few competitors to impact the market share. However, the following market plan creates a differentiated approach to servicing visitors by providing the flight event along with accommodation and transportation partnerships to fulfill the consumer’s desire for a convenient and extravagant lodging experience while in the region. Several main objectives have been established in order for the effectiveness of the marketing strategy to be visible by 2018. These goals are boosting the number of overnight visits in the town from both overseas and domestic travelers and contributing to the overall economic well-being of the United Kingdom. SHREWSBURY MARKETING REPORT 3 In order to successfully accomplish these objectives, the plan will allocate the £100,000 budget in four areas: product, price, place and promotion. In addition, market metrics and research will be used to reach the objectives in the timeframe given. SHREWSBURY MARKETING REPORT 4 Table of Contents 1. Executive Summary ................................................................................................................. 2 2. Introduction .............................................................................................................................. 5 3. Situational Analysis ................................................................................................................. 6 4. Defining the Target Market .................................................................................................... 9 5. Marketing Objectives ............................................................................................................ 10 6. Marketing Mix Strategy ........................................................................................................ 11 6.1. Product ..................................................................................................................... 11 6.2. Price .......................................................................................................................... 13 6.3. Place ......................................................................................................................... 13 6.4. Promotion ................................................................................................................ 14 7. Conclusion .............................................................................................................................. 15 8. Reference List ......................................................................................................................... 16 9. APPENDICES ............................................................................................................................ 17 SHREWSBURY MARKETING REPORT 5 2. Introduction More widely known as the ‘original one-off’, the city of Shrewsbury in Shropshire county has been home to remarkable 11th century architecture for centuries. Celebrated structures ranging from the Shrewsbury Castle to the Shrewsbury Abbey worship building to the three bridges over the River Severn all find their home in Shrewsbury (Shropshire Tourism 2016). Most famously, Shrewsbury was once called home to world-renown geologist Charles Darwin as well (Shropshire Tourism 2016). With over 311,000 residents, Shropshire county is a safe haven for anyone wanting to have either a restful or an adventurous stay (Office of National Statistics 2016). Not only is there an abundance of history, there are over 2,000 full-time employees in the tourism business willing to share Shrewsbury with the world. There are also many scenic vistas to experience while visiting the region (Research Solution 2013, p. 25). Reaching New Heights provides an accommodation and hot air balloon flight package to give consumers more value for their overnight stay in Shrewsbury. In particular, Reaching New Heights focuses on the 45 and over age demographic, who love to sightsee and take advantage of the scenic areas in small, local regions. In order to contribute to Shrewsbury’s success, several overarching objectives provide the business with a timeframe of two years to accomplish both an increase in overnight stays in the town as well as make a contribution to increasing the economic outlook for England. Establishing the business’s product, price, place, and promotion will create a firm foundation for the profitability of the business and institute a plan to provide a new visitor population for Shrewsbury in the near future. SHREWSBURY MARKETING REPORT 6 3. Situational Analysis Considering Shrewsbury is a small country town, there are several drawbacks when it comes to attracting consumers to the area. Location, being the one of the most important aspects of tourism, is one of the major challenges for Shrewsbury as well as Reaching New Heights. With only approximately 300,000 residents currently residing in the region, other areas surrounding Shrewsbury are able to easily reach more of a population base both in and around their locations. Britton McGrath Associates, an independent strategic management consultancy, took on the task of collecting data from major cities (Chester, Durham, Litchfield, and Cardiff) in order to compare Shrewsbury’s population reach within a 60-minute drive to others places in England. All across the board, with the exception of Cardiff, other major cities had a significantly larger number of people within a 30 to 60-minute drive from their location (Britton McGrath 2011, p. 10). In fact, Shrewsbury was overshadowed by 25% in Durham, 55% in Litchfield and 60% in Chester (Britton McGrath 2011, p. 10). Due to the lower population in and around Shrewsbury, Britton McGrath Associates asserted that for Shrewsbury to be considered equal with its competitors two situations would have to occur: 1) an enormous amount of repeat purchases by the local population, or 2) Shrewsbury would have to reach a different demographic (Britton McGrath 2011, p. 10). Over the years, Shrewsbury has relied on the 79% of repeat visitors and the age demographic of 45 years and older, who contribute to 63% of total visits (Britton McGrath 2011, p. 11). Furthermore, even though a fair amount of revenue comes from tourism or holiday visits, holidays only comprise 12.85% of the reason people visit Shrewsbury. A combined 47.31% of journeys made to Shrewsbury are for business and study purposes (VisitBritain 2015). SHREWSBURY MARKETING REPORT 7 Another key issue for Shrewsbury is the effect Brexit has had on the England tourism industry in general. Although the British pound’s devaluation would seem like an advantage for Shrewsbury, it could have had the completely opposite effect. Approximately 78% of United Kingdom residents believe Brexit created a great opportunity to travel to the EU, while 67% of EU members came to the United Kingdom (Espiner 2016). Furthermore, the fall in the pound’s valuation has allowed overseas travelers to easily access London and its world class shopping and fashion scene to pick up great deals (Espiner 2016). Thus, the effect of Brexit is that overseas travelers are visiting England’s major cities, not necessarily the English countryside. In addition, businesses in Shrewsbury, including Reaching New Heights, may suffer even more if the government does not act swiftly to return England to economic equilibrium. Through the fall of the pound, markets need to increase their pricing of products to match the inflation placed upon businesses. With inflation representing the general increase in price for products, consumers get a lesser value for what they spent (Öner 2012). Thus, Brexit’s impact on the United Kingdom economy could affect the accommodation industry because of the sudden change in pricing that leads to competitive pricing changes. Another effect of Brexit concerns the environment. By leaving the EU, rivers, wildlife, and eco-friendly farming may be at risk due to the extensive measures and policies put in place under EU supervision (Shropshire Wildlife Trust 2016). For example, both the ‘EU Water Framework Directive and Fresh Water Drinking Directive’ kept the rivers and water quality up to standard (Shropshire Wildlife Trust 2016). Conservation farming was heavily funded by the EU, and measures to keep wildlife loss at a minimum are all void after Brexit (Shropshire Wildlife Trust 2016). A major attraction to Shrewsbury is its scenery. Its protection is, therefore, SHREWSBURY MARKETING REPORT 8 a major concern for increasing tourism. Consequently, Reaching New Heights will have to cope with the consequences of Brexit. In order for Reaching New Heights to effectively market to the Shrewsbury area, the business must identify external factors that play a role in what a startup business faces as it enters into the tourism and air balloon business. PEST Analysis: Reaching New Heights In addition to the PEST analysis, a SWOT analysis has been created to recognize both internal strengths and weaknesses along with the possible external opportunities and threats presented in entering the tourism and hot air balloon market. Political Economic • Government regulations involving commercial operation of balloons • Brexit and the influx of overseas travelers x Inflation rate x Strength of the pound x Price of propane fluctuation Social Technological x Focusing on ages 45 years and older x Spending habits (cultural distinctions on what to spend money on) x Balloon equipment advances x Advertising through television and radio to fit age demographic x Implement weather warning system or calculate wind speed x GPS on board and in office to see where the balloon is located SHREWSBURY MARKETING REPORT 9 SWOT Analysis: Reaching New Heights 4. Defining the Target Market In particular, ‘sightseers and potterers’ are the target market Reaching New Heights is attempting to capture through this market strategy. Overall, this category of travelers include approximately 6.5 million people in Great Britain alone in the age demographic of 45 years and older who are married (Tourism Ireland 2012, p. 19). When travelling, ‘sightseers and potterers’ love to experience the local delicacies and shopping boutiques that are in the area as well as take in the breathtaking scenery (Tourism Ireland 2012, p. 19). Day visits into Shrewsbury approach 2.8 million, while overnight visits are a mere 0.4 million. Thus, Reaching New Heights aims to achieve a reversal of this trend and convince ‘sightseers and potterers’ to enter into the 11% market of overnight visiting (Research Solution 2013, p. 13). By offering the package of a hot air Strengths Weaknesses x Limited competition in Shrewsbury x Trained and certified balloon operators x Partnerships with accommodation and transportation services x Lack of housing capacity and number of local accommodations x Small number of trained operators x Profit margin Opportunities Threats x Contribute to the expansion of the local accommodation market x Possible increase in overseas travelers visiting the region x Wet and windy climate x Restrictions on age, height, and health conditions x Competition from similar businesses in small area SHREWSBURY MARKETING REPORT 10 balloon flight with superior accommodations, the target market’s desires are satisfied by having an adventure, viewing the beautiful scenery of Shrewsbury, and experiencing quaint country charm all at the same time. By taking the approach of concentrating on a target market and partnering with local businesses, Reaching New Heights focuses on those who appreciate adventure, but also enjoy superior amenities. Reaching New Heights already provides a better flight experience for the price than its competitors. However, in addition, due to its accommodation and transportation partnerships, Reaching New Heights can offer a price differential that will be attractive to its target market. ‘Sightseers and potterers’ will realize the value differential between Virgin Balloon Flights and Reaching New Heights immediately. 5. Marketing Objectives As our main objectives are to ‘increase the awareness of Reaching New Heights, a hot air balloon business’ and increase total number of overnight staying visits in Shropshire from 0.4 to 1.0 million by the end of 2018. As our service will offer accommodation it increases the overall overnight stays. Our secondary objectives are to contribute 1% to England’s GDP by the end of 2018 (currently at 0.7%), and gain a 25% increase in receipts from approximately £2.4 to £3 million by the end of 2018. The secondary targets were made secondary as they would not be directly caused by our business, Reaching New Heights (RNH) alone, and rather caused by the swarm of new tourists under the classification of ‘Sightseers and Potterers’ staying for a couple of days or so. This will lead to them testing and trying the experiences of Shrewsbury, therefore being financially beneficial to all local businesses. SHREWSBURY MARKETING REPORT 11 6. Marketing Mix Strategy Saturdays and Sundays are widely untouched by the Shrewsbury Air Balloon service, therefore to give more leeway to tourists we will offer the same (plus a little bit extra) service that is available on the days that Virgin Airways ‘Weekday West Midlands’ (Virgin Balloon Flights 2016) does not. By doing so it allows the target market of the Air Balloon industry to plan activities they want to do at Shrewsbury without the worry of having to take a flight during the week. This provides them will a more relaxed mood as they aren’t pressured by time constraints of service availability. The marketing mix below entails further detail on the service that will be aimed at the consumer, and the communication and costs associated with the plan. 6.1. Product ‘Reaching New Heights’ will offer 2 packages of services: 1a. Set Flight ƒ 6-hour ride between 7:00am and 6:00pm s(UTC+00:00) ƒ Accommodation at a Bed & Breakfast hotel ƒ Set route, along the Severn River, starting at the West Mid Show Ground until reaching the Railway Station. Then slowly backtracking over the town ƒ Pickup from B&B Hotel at specified time and drive back ƒ Complimentary champagne after the ride ƒ 9 people maximum per air balloon £240 per person (inc. accommodation costs) 2a. Romantic Dawn Flight ƒ 6-hour ride (from Dawn: 6:00am to 12:00pm [UTC+00:00 time]) ƒ Accommodation at a Bed & Breakfast hotel ƒ Romantic flight, high above centre of town, up to slightly above clouds ƒ Pickup from B&B Hotel at specified time (5:00am) and drive back afterwards ƒ Complimentary champagne after ride ƒ Romantic ride for 2 £350 per person (inc. accommodation costs) 1b. Choice of Flight Route ƒ Same as above except you get to plan a route of your own and how long. Maximum ½ a day (12 hours) ƒ Plans have to be made on the Shrewsbury website prior to booking online ƒ 9 people maximum per air balloon £200 - £600 per person (inc. accommodation costs) 2b. Romantic Dusk Flight ƒ Same as above except set out at Dusk (7:00pm- 1:00am [UTC+00:00 time]) ƒ Pickup from B&B at specified time (6:00pm) and drive back afterwards ƒ Romantic ride for 2 £350 per person (inc. accommodation costs) SHREWSBURY MARKETING REPORT 12 Map on the Brochures: Figure 1.1: The map comes from the official Shrewsbury website (Shrewsbury Information Centre 2012 pg.1). All flights begin at the red dot. The big blue dot indicates the location that the hot air balloon for 2a & 2bstops horizontal movement and rises vertically. The aim of the business is to provide the excitement, to ‘Sightseers and Potters’ and other customers via balloon flights. With 1-day paid accommodation at a 4-star B&B hotel for around £30-£50. The B&B hotel is completely separate from the Reaching New Heights air balloon service. Providing incurred hotel accommodation encourages the customers to continue booking nights at the hotel for the length of their stay because of ease. All hot air balloons will be flown by a full commercial pilot’s license pilot, who have all achieved their Air Operators Certificate (AOC). The hot air balloons are of the KAVANAGH E 180 ZK-FBI model which are eco-friendly. According to the International Markets Bureau (2012, pg.14) the 45-54 age group were willing to pay more for products and services that have a SHREWSBURY MARKETING REPORT 13 low carbon footprint and are eco-friendly, hence our flights are conducted using eco-friendly hot air balloons and are slightly pricier as a result. 6.2. Price Since the age demographic target market (TM) is aged 45 and above it is widely shunned as all the new things are targeted at the young and able. Since this is the case, there is a lot of potential to influence the TM to buy RNH’s services as they are “more interested in experience oriented products and services as opposed to material goods” (International Markets Bureau 2012, pg.14). The KAVANAGH E-180 ZK-FBI model of air balloon costs $18,000 New Zealand dollars, this amounts to slightly under £9,000. Because of our budget of £100,000 we can afford to get 4. However, since there are only 2 of us we’d have to hire other hot air balloon pilots, we can get 2 more pilots and pay them 60% of the proceeds from the flights. This negates the need to spend any of the budget on them apart from their Air Operators Certificate (AOC) training. All pilots will be trained and have AOC’s prior to the opening of the business. For complete Budget refer to Appendix A. 6.3. Place Reaching New Heights (RNH) is bookable online at the Shrewsbury website. This is optimal as the Target Market (TM) prefer to purchase online. Fortunately, the Shrewsbury has given us a full year of free advertising and a section of the site to allow bookings and provide information to potential customers. Seeing as the service is available throughout the year and on weekends there is now restraint on when the TM can book and have air balloon flights. Our competitors Virgin Airways on provides SHREWSBURY MARKETING REPORT 14 their services on weekdays, because of this we have a competitive advantage for being available on Saturday and Sunday. We have complete control over the channel of distribution as we are the sole supplier of the Hot Air Balloon experiences. This is because we only have one branch (for now). 6.4. Promotion 28.11% of the budget will be aimed at promoting the new business Reaching New Heights (RNH) through a few of the most effective methods for our TM. The TM tend to come across material of interest by the Radio, iPads, iPhones and actually searching things like ‘adventure’ and ‘getaway’. Hence our promotion will take place as radio, YouTube and on the Shrewsbury website type of advertisements. The main aim is to attract the TM and others to come to Shrewsbury for the RNH hot air balloon flights; providing them with 1-night accommodation to make them stay for a couple more and sample all that Shrewsbury has to offer. The YouTube advertisements will consist of a 30 second advertisement, same applies to the radio advertisements. Radio ads shall be conducted in Australia. The following encompasses the campaign for this plan: ƒ Radio ads to the countries in Australia, USA and Europe is more technologically active therefore YouTube Advertising for those regions o For Australia: advertising on Gold 104.3, KIIS and the Fox ƒ Advertising on the official Shrewsbury website ƒ YouTube advertising in the form of an in-stream advertising ƒ Advertising on the official Shrewsbury website SHREWSBURY MARKETING REPORT 15 7. Conclusion The key objectives are to ‘increase the awareness of Reaching New Heights, a hot air balloon business’ and increase total number of overnight staying visits in Shropshire from 0.4 to 1 million by the end of 2018. The way we planned to achieve these is by providing a Hot Air Balloon service. The 1st objective will occur because of the 28.11% allocation to promotion of the budget. The 2nd objective could be achieved due to the lessening of the time constraints for the Target Market (TM) to book their flights, as we offer weekend flights and much longer flights then our competitors Virgin Airways. Therefore, RNH is innovative in the idea that it provides a means to achieve the primary objectives, attract the TM and possibly lead to the attainment of the secondary objectives in the future. SHREWSBURY MARKETING REPORT 16 8. Reference List Britton McGrath Associates 2011, Visitor Economy Strategy, viewed 10 October 2016, . Espiner, T 2016, ‘Will Brexit be a Boon for Tourists?’, BBC, 29 September, viewed 12 October 2016, . International Markets Bureau 2012, Global Consumer Trends Age Demographics, Agriculture and Agri-Food Canada, Canada, viewed 7th October 2016, . Office for National Statistics 2016, Labour Market Profile- Shropshire, viewed 12 October 2016, . Öner, Ceyda 2012, Inflation: Prices on the Rise, International Monetary Fund, viewed 12 October 2016, . The Research Solution 2013, Tourism Economic Impact Assessment 2011 Shrewsbury, viewed 10 October 2016, . Shrewsbury Information Centre 2012, SHREWSBURY FOR GROUPS – INFORMATION pg.1, Shrewsbury, viewed 7th October 2016, . Shropshire Tourism 2016, Historic Shrewsbury, viewed 05 October 2016, . Shropshire Wildlife Trust 2016, Brexit: Effects on the Natural Environment, viewed 13 October 2016, . Tourism Ireland 2012, The GB Market, viewed 11 October 2016, . Virgin Balloon Flights 2016, Weekday Morning West Midlands, Virgin Airways, viewed 7th October 2016, . VisitBritain 2015, Inbound Nation, Region & County Data, viewed 11 October 2016, . SHREWSBURY MARKETING REPORT 17 9. APPENDICES APPENDIX A: BUDGET Shrewsbury Budget £ £ Source Budget Balance at start £ 100,000.00 KAVANAGH E-180 ZK-FBI Hot Air Balloons -£ 34,730.16 http://www.abf.net.au/ballooning/cl assifieds Pilot Licence Costs -£ 18,320.00 http://www.ballooning.co.uk/learnto-fly-hot-air-balloons.php Radio Advertising Australia -£ 3,398.88 http://www.yesmarketing.com.au/ media-students1.html In-Stream Pop-up YouTube Advertising -£ 24,720.00 http://www.pennapowers.com/how -much-do-ads-on-youtube-cost/ Insurance -£ 4,500.00 http://www.yesmarketing.com.au/ media-students1.html Business Registration -£ 100.00 https://www.gov.uk/limitedcompany-formation/register-yourcompany Propane -£ 13,300.00 -£ 99,069.04 http://www.yesmarketing.com.au/ media-students1.html Total Budget Balance at End £ 930.96 SHREWSBURY MARKETING REPORT 18 List of Purchases: ƒ 4 KAVANAGH E-180 ZK-FBI Hot Air Balloons @ 8,682.54 each. Totalling £ 34,730.16 ƒ Pilot Licence totals to £18,320: Description Cost 12-hour minimum flight time at £220 per hour to include provision of balloon, training pilot, insurance, retrieve vehicle & balloon trailer, ground crew, propane, farmers wine £2,640 4 hours as above but with BBAC Instructor @ £250 per hour. £1000 Tethered flight and instruction with BBAC Instructor £200 BBAC Examiner recommendation flight. £270 BBAC Examiner flight £270 Witnessed ‘Solo’ flight £200 35% 19% 3% 25% 5% 0.1% 13% Allocation of Budget KAVANAGH E-180 ZK-FBI Hot Air Balloons Pilot Licence Costs Radio Advertising Australia In-Stream Pop-up YouTube Advertising Insurance Business Registration Propane SHREWSBURY MARKETING REPORT 19 NAME COST TIME Gold 104.3 £1,081.45 5, 30 second ads KIIS FM £1,297.76 3, 30 second ads FOX £1,019.67 3, 30 second ads ƒ £12.36 per YouTube advertisement = 2,000 ads * £12.36 = £24,720 ƒ £900 per 20 insured flights. £900*5 = £4,500 for Insurance (100 insured flights)