Problems in Derby Castles Management - Assignment Example

DERBY CASTLE Module: Module Module Leader's Word count: 4,837 November 27, 2007 TABLE OF CONTENTS I. Introduction 3 II. Problems In Derby Castle's Management 3 a. Poor Marketing Strategy 3 b. Historical Value Against Financial Values 3 c. Meeting Customer's Satisfaction 4 d. Managing Turnovers 4 III. The Best Tool-Market Segmentation a. The balance between Push/Pull and Trust/Advocacy 5 b. Market Segmentation 6 c. The Arkleisure Model Used In England Marketing 7 d. Subscription Model 8 IV. How to Reach the Market a. Adoption of Public Relation Marketing 9 b. Advertising 9 c. Internet Marketing 9 d. Relationship Marketing 10 V. Ways to Manage Customer Queuing a. Computerization of Getting tickets for Admission 11 b. Adoption of Online Reservation of Ticket 12 VI. Recommendation 13 a. Contingency Plan 14 INTRODUCTION In terms of profit, the overall performance evaluation result of Derby Castle-one of the top 10 most visited tourist sites in UK, showed that the castle at its current status is having a healthy profit performance. Despite some management problems, it has keep on going from strength to strength. However, the management is also certain that these problems, although not causing much trouble for the moment, but would somehow affect the future operation of the castle-especially the problems regarding customer accommodation. The management is also threatened by the problem of selecting the appropriate market segment which causing difficulty in engaging partnership with other business organization - especially with commercial business owners. The succeeding part of the document will delve directly on presenting these problems. Robin Hood can develop a SMART Goals by making a comprehensive, actionable, flexible, and goals that could be able to shift together with the shifting market demands. It should be based on perceived reality and possibilities of change in the future. Before the goals are set, Robin Hood should first identify the real essence and purpose of the organization. A suitable mission statement for Derby Castle could go like this: "Develop a long-term relationship with the customers through providing value-based services, hassle free transaction processing through the use of information wise systems of customer accommodation in order to gain customer loyalty, which will lead to profitability." This can be achieved if the castle's management applies the following steps properly: 1. Choose the right segment 2. Apply proper marketing strategy in reaching the segments. 3. Apply technological system. PROBLEMS IN DERBY CASTLE'S MANAGEMENT Poor Marketing Strategy - Marion Montgomery, the marketing manager shared the marketing strategy they had utilized as one of the secrets behind the success of attracting diverse types of visitors-customers. She is to some extent confident that their main line in their advert which says "Derby Castle - the finest mediaeval castle in England" is a full package description of the castles features. But she does not discount the Castle's unique state of preservation, the breadth of attractions it offers, its location on the banks of the River Trent or its thousand-year span of history. In general, the advert is ineffective in the sense that it has only served lesser information than what is needed. The management is ignoring the fact that different people would have different reaction to what we can consider a poetic line, and each have different preferences in based on their expectations of the overall performance in exchange for their payment. Historical Values against Financial Values - This talks about the real value of the site. Montgomery said that "Coca-Cola have offered us a sponsorship deal. They will give us money for a particular project which will increase our revenue and also the number of visitors we are getting. The problem is that Coca-Cola is the epitome of youth and fizz while the Castle's target market is adults ABC 1, average age somewhere around 45! So how do we pull this deal together" This is causing a very big problem in the management in choosing who to make partnership with. The management's sincerity in upholding and retaining the historical values and spirit of the castle had even concluded that the organization is not a business. It is more on promoting historical values, which in the very clear sense has in conflict with the organization's objectives of gaining higher share values per shareholders-profit. That form of concept itself is also beneficial since it is the nature of underplaying the commercial side of the organization that had attracted most of the customers which Montgomery herself confirmed in one encounter with a customer. There is a difficulty in looking for partners that possesses same integrity with them. The efforts of preserving the historical value of the castle had also affected in meeting the expectation of some customers who failed to realize the real essence of why the castle has been opened to the public. In one of the customer's comment he noted that "Maybe some of the signs were a bit too discreet - we had to ask where the toilets were-but it makes a pleasant change." Do castles long ago have signs placed among each of its section Maybe yes, but the way it look might really give a big difference in terms of writings and materials composing it. The management is left with a trivia: "What type of customer and how they will be able to reach them all to gain their loyalty, and win profitability for the organization in the end" Meeting Customer's Satisfaction - As of now, despite visitor's complaints it still has managed to remain at its competitive edge. However, the organization is certain that the changing demand of the customers had been affected by the modernization of almost all ways of providing service to customers. One customer commented on the queuing in acquiring admission tickets which takes long amount of time - "We then had to queue for about 10 minutes at the ticket office to pay to get in - an option to book online would have meant that we could have gone straight in without the wait." We could never doubt the issue being raised here by the complaining customers. The behavior of the customers might seem beneficial at the beginning, but might lead them straight in disaster at the end. Managing Turnovers -In maintaining turnovers, the management is somewhat satisfied in the manner of how their revenues where gained. Derby Castle brochures show According to Marion, this literature was intended "to push up the shoulders of demand." During peak seasons, revenues were higher with less effort being exerted. During off-peak seasons, it offers wide variety of activities to supplement turnover, and to cover up the decrease in revenue figures that was supposed to be gained from site visitors alone. In totality, the profit performance had shown promising results. The next section will present our discussion of the necessary steps that the management should perform to resolve these problems. THE BEST TOOL - Market Segmentation Before we proceed with discussion of our best tool - segmentation, let us present Urban's observation of the current state of the customer market and its effect in the business organizations. The Balance between Push/Pull and Trust/Advocacy The customers nowadays are very powerful and are very quality conscious. Consider that the "monopoly" system that was famous long-ago no longer works in this market crowded with competing business whose prices are set with limitation by government law protecting the customers. It is no longer the business owners who are controlling the market, but it is already the customer who already possesses their own powers of limiting the business from overpricing and in increasing the quality of their service. According to Urban, Customer power springs from three sources: more purchase options, more valuable and timely information, and a greater degree of transaction simplicity. Generally speaking, it sums up to satisfaction. To be successful, the organization should measure its current stand in each of these sources in order to satisfy the customers. There are two famous practices in the management regarding attracting customer: push/pull strategy, and trust/advocacy strategy, and a strategy of building relationship with customers lying between these two. (Urban: 43). A pure push/pull business model involves virtually no trust. It tries to get the next sell of the product, rather than trying to target the sale after that. It is applicable when the seller has the market control in the sense that his product or service is incomparable, or unique. According to Urban (2007: 42) noted that it is best in achieving short-term sale movement. On the other hand is the trust/advocacy strategy where the seller tries to win the customers' trust. In this strategy, the seller needs to act against its own short-term sales goals. This is applicable when the products you are selling are also being produced by your competitors. The most important thing here is due to the availability of the product from all sellers, the customer can compare and you will not interfere with their way of comparison. Due to advocacy-based companies trying to build customers for life, these companies strive to create reputations for impeccable honesty. (Urban, 43) In between these two strategies, is strategy based on building relationships with customers. This is often an evolutionary stop on the way to an advocacy strategy that builds complete trust. A seller using this strategy is trying to connect customers by matching their product to the customer and build a long term relationship with them. Its product pricing are based on value-based strategy where a customer has full knowledge of what they are paying for. (Urban: 43) Derby Castle's management appears to be at push/pull strategy. Although, their intention is to have a good relationship with customers and to promote the importance of the historical site, they are distracted by their pride of preserving the integrity of the castle. They could not initiate partnership with just anybody else that is willing to invest; they could not easily make any changes in any structure of the whole castle. How could they shift to a full pledge trust/advocacy strategy without destroying the integrity of the castle For the management it is a trivia that must be solved as soon as possible. Market Segmentation All of these problems can be addressed by proper segmentation of its market. Wikipedia online encyclopedia defined Market segmentation as a crucial tool that allows a population to be divided into groups of people with similar characteristics. It allows the needs and wants of each of these 'segments' or groups to be better understood and products can be customized and targeted to groups that display the most purchasing potential. Companies gain a better return on their investment by using this consumer-led marketing technique rather than randomly marketing a product to the general population. It is proven beneficial in marketing campaign since it helps the organization identify the right market segment that they will conquer while reducing the risk of investing big amount of money in segment-less marketing campaign. It also gives the idea of what type of promotional material are to be produced and the proper time of launching, and the type of media to be used. In terms of looking for business partners, it provides the best ideas since you could also segment the competing market into categories and types of services being offered, and look for those who are in the same interest with your organization. If segmentation is done well, the organization is assured that any marketing strategy to be implemented will gain a rating of at least more than half of the highest percentage before implementation, and the rest will be revealed after its implementation. From a journal released by VisitBritain (2005), here are numbers of ways in segmenting customers - by socio-demographic characteristics (age, sex, and social class), life stage (SINKS, DINKS, families, and empty nesters) or location. The widely used ACORN model, for example, uses census data to classify people according to the area or neighborhood in which they live and consists of 43 distinct consumer types. In addition, demographic information such as age, race, income, education, employment, product preferences and media contact is also used to help define these clusters. MOSAIC is another geodemographic classification system that uses similar variables to distinguish between 60 segments that collectively make up 12 groups. Segmentation can also be based on consumer behaviour, which requires activity data in order to predict future activity and behaviour. Psychometric data, based on personality statements, can aid segmentation as well by identifying what type of person someone is and how they would respond to specific sales strategies, for example. THE ARKLEISURE MODEL USED IN ENGLAND MARKETING The ArkLeisure model proposed by Arkenford, a market modelling and research company, provides a system that is based on people's core values and definitions of quality. A value-based segmentation has many advantages. Values do not change (or only change very slowly) throughout a person's life and can provide a more indepth understanding of consumers. Values or beliefs shape people's needs, which in turn shape their behaviour. Value-based segments will differ in their brand choice, behaviour, life styles, leisure activities and interests and so a deeper understanding of their purchasing behaviour, propensity to travel and general views on life can thus be gained. The additional benefit of this model is that it also takes life circumstances and purchasing situations into account. Customers make travel decisions depending on whether they meet both their aspirations and their practical requirements, so it is imperative to acknowledge these separate variables. A person's priorities may change depending on what type of holiday they are planning but they will always remain in the same value segment. Because the system is not based on predicting a specific set of purchases, it is also more flexible and can be applied across a wider set of tourism markets, a specific destination or an individual product group. (VisitBritain: 2005) How does the model work and why is it beneficial to England Marketing The ArkLeisure model consists of three main elements: aspirations (value statements that identify segments and are made on the basis of quality judgments), life factors (life stage, income, etc) and purchase scenarios (preferences, perceptions, suitable accommodation, purchase drivers, satisfaction with choices made, purpose of trip, etc). In order to define people's aspirations and therefore segment them into different groups, their values are measured in relation to two key dimensions: the extent to which they embrace or resist innovation and the extent to which they are influenced by mass culture and peer pressure. Willingness to pay for different services and products is also considered, as this is clearly related to individual values. By using this information, the system is able to divide the UK market into eight value-based segments: Cosmopolitan, Discoverer, High Street, Style Hound, Traditional, Functional, Habitual and Follower. (VisitBritain: 2004) The model has proven to be effective in the England Marketing. The model is very comprehensive and it can be applied so that the management can properly choose its strategy. In general, the castle belongs to tourism segment of the market. There are many sectors in the society with the same interest with the tourism industry such as: 1. travel agencies - ex. airlines, shipping lines 2. travels and tours service providers - ex. Local land bus companies 3. hotels - local hotels 4. tourism offices 5. Information centers - ex. Call centers The management should have to establish linkage with these agencies so that they could be promoted as one of the travel sites. THE SUBSCRIPTION MODEL This model is more on ensuring that there will always be customers. This was mostly used by magazine, newspaper publishers, and other service oriented organizations. Its main advantage is that it ensures a constant stream of revenue from all subscribers. The management could offer a subscription program to target customers which shall be paid by two options: one time payment, and installment. The subscription will provide a list of tour packages. The pricing will be based on the type package, and on some qualification requirements. Assuming all accommodation booking is done either online or not - Packages can be categorized as: 1st class package - customer can stay in first class hotel rooms, with pre-paid transportation accommodation only vice-versa at the tour route, pre-paid meals, and souvenir stuff. 2nd class package - with pre-paid transportation accommodation only vice-versa at the tour route, pre-paid meals, and souvenir stuff. The term in the subscription specifies how many times the customer can visit the site. The limitations will be also specified in the subscription agreement. Pricing will be based on how these different segments can afford to pay. HOW TO REACH THE MARKET After the management had chosen its own segment, the next step is choosing the right marketing strategies. If the management wants to maintain its customer's loyalty, the management should consider the following alternatives: Adoption of Public Relation Marketing Public Relation approach of Marketing is applicable to almost all types of business. The strategies main focus is on maintaining loyalty of existing customers, and conquering new prospect customers. It cost lesser amount of promotional fund compared to advertising since it could utilize all free forms of mass media. It can either be made through a Press Release, releasing of informational materials to communication networks, publishing agencies, or by self distribution of pamphlets, promotional fliers. This type of marketing strategy is controlled by the advertisers and not by the product owners. The disadvantage of this one lies in the reality that advertisers have the choice to promote or not your business. In contrary, Advertising campaigns are paid adverts that are controlled by the agreements made between the product owner and the advertising agency. The time it will be aired, how often it will be aired. But the main disadvantage of advertising is that it is limited to what was paid. Revision of the content of the advert means another set of agreement and another payment. Advertising - One of the most widely used of promotional strategy is in the form of paid advertising aired on the mass media. The management could record a video or an audio tape highlighting the castle's attraction, and introducing its history. This one is mostly effective in places where the only interest of people are watching TV shows, and listening to Radios. It can reach far places as far as the communication signals could reach. Attract attention Internet Marketing - also referred to as online marketing or e-marketing, is the marketing of products or services over the Internet. (Wikipedia.com) It was one of the most modern approach to promote products or services and a very effective way of building trust with customers. Organizations who utilize this form of marketing published their own websites where customers can directly view updated information, new product release, and new service, compare prices easily, and publish their comments and reviews of certain products. The website is often equipped with survey forms and email links where the customer could directly communicate with the organization's customer support staff. Some have even utilized it for buying and selling products through the use of Electronic Money Transfer. This is usually utilized for online reservations of Hotels, Airline Industry, and Shipping Lines allowing the customer to acquire reservation or admission requirement in the comfort of their own homes, and time preferences. One of the benefits associated with Internet marketing is the availability of great amounts of information. Customers can access the Internet and research products, as well as purchase them, at any hour, any day. Companies that use Internet marketing can also save money because of a reduced need for a sales force. Overall, Internet marketing can help expand from a local market to national and international market places. Compared to traditional media, such as print, radio and TV, Internet marketing can have a relatively low cost of entry, (Wikipedia.com) Relationship Marketing - In the problem of maintaining the integrity of the historical site while conducting the business, the organization should have to establish can also be made by establishing linkages to some sectors of the society. By providing linkages to travel agencies, hotels owners that could help promote the Castle to tourist and customers, the management can in no doubt increase the number of visitors. The more people get informed, the more customers might be attracted to visit the site. There is no need for establishing direct venture with any commercial organizations when the integrity of the business can be put to risk. The last two marketing strategies, internet marketing and relationship marketing can both integrate the use of subscription model. It is mostly used nowadays by companies who have developed and published their own websites which help them reach many subscribers of their products and services worldwide. However, necessary preparation should be taken into account before releasing information drives, and these are: 1. Market research - deals with studying the current economic status. When trying to sell a product or service, manufacturers must first ask the question: Can local customers afford the price If the product cannot be sold locally, what is the cost of exporting it 2. Setting out aims - goals and objectives of the promotion should be established as it will be the basis for the evaluation of the success of the promotional campaign. 3. Budgeting - it is necessary to prepare the required financial support for the campaign. Contingency fund should be prepared in case unexpected shortage due to sudden increase in prices of promotional materials, or increase in rate of payment for the promotion. To do that, the management should have a complete list of materials, comparison of prices for materials that needs to be purchase, cost of production, and payment for the people that will do the promotion especially in advertising. 4. Choice of media - proper form of media should be utilized. Conduct research on the mostly read newspapers, magazines, or mostly viewed television networks, and mostly listened radio stations. In the choice of media, the cost matters a lot specially in advertising. Just make sure that the media could reach your targeted customers. 5. Coordination - All aspects from the design of the content of the promotion 6. Test results - in getting evaluation result for any campaign, it is important to record pre-implementation observations. After implementation, evaluation is done again. Final evaluation conclusion shall be derived from the comparison of the tow recorded results. The success of the promotional campaign lies on good planning and designing. Your information campaign should be able to: Stimulate interest, create a desire, bring about action, and create Awareness. It is impractical when you go directly into spending money for unorganized information campaign and will not be able to yield good customer responses. MARKET SEGMENTS THAT CAN CREATE THE BEST BUSINESS OPPORTUNITIES FOR DERBY CASTLE Implementation of the Internet Marketing and the computerization of the ticket admission processing, and general use of computers to improve the efficiency of processes and services in the castle could yield positive results for the management, and improve customer satisfaction. There should be a website for the castle, on which internet marketing and advertising will be carried out. A running website will also offer more attraction to a larger number of prospective customers, especially in the modern technology aware countries all over the world. Intending customers would be able to freely log onto the site, and view their visitation plans. Market Mapping can also be used to address the demands of various visitors, and the impact of the segments on the flexibility required by each of the service operations at Derby Castle. Robin Hood can develop adequate goals by making a comprehensive, actionable, flexible, and goals that could be able to shift together with the shifting market demands. It should be based on perceived reality and possibilities of change in the future. WAYS TO MANAGE CUSTOMER QUEUING 1. Computerization of Getting tickets for Admission Computer programs are known for its capacity to perform faster and accurate information processing which could be best in the admission booth. Customer power springs from three sources: more purchase options, more valuable and timely information, and a greater degree of transaction simplicity. Computers are playing role in the business life and it has evolved from clerical automation to assisting corporate decision-making. (Rothman and Mossman, 1985). When it is applied, processing of payment could be done at least 2 times faster, the minimum speed.) It is also reliable when the management is trying to get security for its sales as all sales data are encoded directly in the databases by the automated system. It keeps the ticket booth officer from worrying of making mistakes which usually happens in manual ticket selling. 2. Adopt Online Reservation of Ticket - This is included as one of the features of the internet marketing by giving the customers an online reservation systems where they could get their admission ticket by paying online through electronic money transfer. RECOMMENDATION Since customers mostly complains about the time wasted during queuing in acquiring admission ticket at peak hours, and the insufficient promotion, it can be solve alone by adopting internet marketing and public relation in marketing. The organization could develop a website where all information such as pictures, features, explanation, and most of all a complete set of information that the customer should know to attract them. In this manner, customers could freely log-in to your site, and possibly if site visitors' databases are accessible in the website, the customer could view his or her history of visitation in the site, and could directly place comments on message boards. Websites offers more attraction especially in the modern technology based countries like UK. The problem with queuing can be addressed also by including an online ticket reservation where the customers could get a printed copy of the admission ticket by paying online through electronic money transfer. The customer will simply login to the site, and the purchasing transaction will be stored in databases where the management could easily keep track and monitor the number of visitors. At this point, the management could in advance determine who and how many are the expected visitors of the coming days. The management can also inform the customer in advance about the status of his schedule of visit, either it is crowded or not, and will offer him or her to change his visit schedule to times where they feel much comfortable being free from overcrowded. In this way, it can achieve customer's trust by giving them the right to their own preferences, and in the same way you can control the number of visitors to keep from overcrowding. In this way you are giving advance information to your customer which he will use for possible reservation. Plus, the internet is viewed worldwide. You can place search keywords that will be used by search engines in answering internet user's inquiry. When a customer search for tourist attraction, then there is a possibility if your keywords match the words entered by the searcher, your site will be displayed in the list of the famous destination. A payment processing system should also be installed at the admission booth of the castle so that the ticket officer can accurately release ticket and accept payment from customers. It helps also from making mistakes in computation of payments and change especially when dealing with big amount. The traditional use of calculator takes longer. The computer system can have an interface where the ticket officer will enter the number of tickets to be released then the computer will in turn determine the price of the ticket from a database and compute it by one click button or by a keypress. We can be sure at all times that the computer has used the exact price of the ticket. In general it makes the processing free from errors. Implementation of the Internet Marketing and the computerization of the ticket admission processing could yield positive results not just for the management but on part of the customers. For the customers, it could give them the power which Urban noted (Urban: 43) are: more purchase options, more valuable and timely information, and a greater degree of transaction simplicity. On the part of the management, it does not only help in marketing approach, but it also helps in monitoring daily sales, and conducting sales projection of the next years by deriving from the daily figures of sales compared against possible amount of risk. It helps in decision making since the real time figures of sales are the basis of taking another step in marketing approach. CONTINGENCY PLAN Release full detailed campaign materials - If in case the management could not be able to adopt computerization and internet, the best way is to stick with the advertising and the public relation marketing by using pamphlets or fliers. The materials should have to cater all segments of potential customers as identified in the segmentation process. It should contain all the necessary information, including complete details of the features of the site so that customer will surely know in advance what they are about to experience inside the castle. To manage queuing, the management should give the visitors a full list of schedules, and the average number of visitors at those schedules. When the customer sees that a Wednesday visit is very crowded, then he has the option to choose another day where the average number of visitors is lesser compared to the other days. References December 2003. New Nesda Online Forums. ProService - A Journal of NESDA and ISCET Internet Marketing. [Online] http://en.wikipedia.org/wiki/Internet_marketing [November 12, 2007] Marketing. [Online].Available: http://en.wikipedia.org/wiki/Marketing [November 12, 2007] Rothman, S., Mossman, C. 2004. The Application of Computers in Business, Computer Uses and Issues. 188 The Use of Technology [Online] http://www. The use of technology to improve service quality_ Accommodation and Food Services Accommodation from AllBusiness_com.htm [November 12, 2007] Urban, G. 2007. The Balance of Push and Trust is Shifting, Don't Just Relate - Advocate, Wharton School Publishing. 41- 58 Read More