Scooby Tours – Day Tours In Waitomo Glowworm Caves, Taupo And Hobbiton

Target Market Segment: Geographics

Discuss about the Current Business Condition Of Scooby Tours.

Scooby Tours is a day tour business established in December 2017 and takes tourists to guided tours in Waitomo Glowworm Caves, Great Lake Taupo (for lunch by the lakeside) and movie set of Hobbiton. The tour is offered in a single package and the adults are charged with $370 and the children are charged with $175. The tour starts with a 45 minute boat tour / kayaking / water rafting through the Glowworm Caves followed by barbeque lunch by the Great Lake Taupo and then a detailed guided tour in the Hobbiton movie set (Shaw, 2016). In the initial months of the business, it has been found that there are double the numbers of international tourists than the numbers of national tourists who have participated in the tours. Furthermore, as per the customers’ feedbacks, the average rating for the tours is only 6 out of 10 and hence, there is a significant space to improve the business by also increasing the tour experience of the tourists. Furthermore, the high prices of the tour also need to be justified through enhancing the user experiences in the tour.

In this report, the current business condition is analyzed in order to make a number of recommendations regarding target market as well as a suitable action plan to achieve the marketing and business target.

Generally a domestic market segment is divided into four main types as demographics, psychographics, behavioral and geographics. The segmentations and their target areas are shown in the following diagram.

The current goal of Scooby Tours is to increase the domestic customer count at least 20% more than the current count. Hence, the most suitable market segment for the company is Geographics. This particular segment focuses on the geographical regions that are targeted by a company (Wirtz & Lovelock, 2016). There are four sub-segments of this segment – Local, National, International and Regional. The company already has sufficient customers from regional (Australia-Oceania) and international (China and other countries) markets. Hence, the focus of the company now is to earn more customers from the national and local markets.

The company needs some specific sets of marketing tools or marketing mix strategies that will help it to achieve its goals by earning sufficient number of customers from the domestic markets. The marketing mix strategy utilizes four P’s of marketing that are explained and aligned with the proposed strategies in the following table.

1.Target segment within the domestic market	The targeted segment within the domestic market is geographic, as the company is looking to attract more domestic and national tourists for the tour packages.
2.  Marketing mix strategies for Scooby Tours
P1: Promotion
Objective	The main objective of this marketing mix strategy is to promote the business in the domestic market using digital media. The lack of sufficient domestic interest in the business is mainly due to the lack of sufficient domestic promotion.
Strategy	The main strategy is to promote the business in the domestic market and hence, digital media should be extensively utilized. Digital media includes television advertisements, promotions through social media, online app and others. Social media is a very effective tool for promotion due to the presence of a huge pool of domestic population in it (Kotabe & Helsen, 2014). Social media promotion can be achieved by creating facebook pages, groups and others that will promote the business by uploading tour pictures, packages, benefits and user experiences. The social media can also be used as a platform for online promotional games winning which will grant the participants with special discounts and pass for the tours.
P2: People
Objective	The objective of this marketing mix strategy is to attract more people in the domestic sector to have a tour with Scooby Tours to help them achieve their goals regarding the domestic market. Many people in the country are not aware of their natural heritage and hence, very few domestic people have shown interest in participating in the tours.
Strategy	The strategy includes awareness among the domestic people regarding the natural heritages of the country (for instance, the glowworm caves, Great Lake Taupo and others. This is to be done by promotions through digital media. In addition to the promotion of the business, promotions should also be done on the tour locations that will attract a great pool of domestic population (Ding, Eliashberg & Stremersch, 2016). Furthermore, in order to attract an even bigger customer base, the company can provide certain benefits and discounts for domestic people that may be in the form of tour price discount, free souvenirs, discount for future visits, referrals and others.
P3: Price
Objective	Price is one of the main factors in the business of Scooby Tours. Since the current price chart for adults and children is very high, the company needs to revise the chart so that it is affordable for the domestic people.
Strategy	Initially, the business was targeted towards a wide pool of customers in national as well as international markets, the tour price structure was set at a very high level. As a result, although the international customers were able to afford the tours, many of the national customers were not able to afford the prices of the tour even though they were interested in the tours (Mullakhmetov et al., 2016). Hence, the strategy for the business should include revising the price structure and reduce the prices for domestic customers or provide certain benefits and discounts.
P4: Process
Objective	The objective of this strategy is to revise the marketing and business processes in order to make it more convenient for customers as well as transparency in the system.
Strategy	This particular goal can be achieved by establishing a company website as well as dedicated mobile app through which, the users will be able to view and book tours along with online payments for selected tour as well (Wachowiak, 2016). From this app, several benefits can be provided like instant cashback on bulk reservations, discounts for booking through app and others. This will help to attract more domestic customers to avail Scooby Tours’ services for the tours.

 

Marketing Mix Strategies for Scooby Tours

The recommended action plan for the above mentioned strategies is shown in the following table.

Marketing strategies	Task/s or actions required	Person/s in charge	Schedule/Timeline	Place
Promotion	Promotional marketing through digital media including advertisements, social media promotions and others	Online Marketing Manager	August 2018 to November 2018	Various Media Outlets
People	Promote natural heritage and post pictures of the tours in social and digital media	Online Marketing Manager	May 2018 to November 2018	Various Media Outlets
Price	Survey on the affordability of tour among domestic people, revise price structure for the domestic population	Chief Financial Officer	May 2018 to July 2018	Finance Department Office
Process	Develop company website and mobile app for booking tours, view information on the company and the tour packages, etc.	Chief IT Officer	June 2018 to September 2018	IT Project Office

 

Since four specific strategies have been chosen for Scooby Tours, there must be suitable justifications for choosing each one of them. The justifications are accordingly listed as follows.

Strategy 1: Promotion – This strategy has been mainly chosen since it has been found that there has not been sufficient promotion of the tours within the domestic pool of population. While the promotions have been done through tour brochures for international visitors, the domestic population has been more or less ignored (Kotler, 2015). As a result, there has been a significant different between domestic and international customers in the tours. In order to bridge this gap and increase interest among domestic customers, sufficient promotions are needed that can be done through digital media platforms.

Strategy 2: People – This strategy has been chosen to focus the marketing process on the domestic people. It has been determined that sufficient marketing must be done for raising awareness among domestic people regarding natural heritage and other places that can be visited in guided tours. Furthermore, it is also important to bring in more domestic population than international people as the domestic market will always be much more stable than the international market.

Strategy 3: Price – This strategy has been chosen specifically because the price structure has been deemed as too expensive, especially for the domestic population. Moreover, in each of the competing companies, there are two different price structures for domestic and international tourists that are also set within affordable ranges (Cohen, 2018). In order to maintain business feasibility and competitive advantage, Scooby Tours also need to reduce prices but within a certain limit. Another technique that can be used is to provide discounts or instant cashbacks to the customers based on certain offers or conditions that need to be fulfilled.

Strategy 4: Process – This strategy has been chosen to reap the benefits of technology for enhancing the current business processes. In the current system, technology can provide significant benefits to the business process of the company.          The development of mobile app will make the company a strong contender to gain a huge share in the domestic market. Furthermore, a company website and a mobile app will help the company reach a bigger pool of domestic population than any other marketing means. However, the contents of the website and the app must be updated regularly in order to maintain interest of customers in it.

P1: Promotion

The justifications of the action plan are explained as follows.

Strategy 1: Aug 2018 to Nov 2018 – The next summer tour season starts in December 2018 and hence, it is important to implement marketing activities much prior to the season. This will grow interest among the people and many will decide to preregister for tours on specific dates. In this way, the company will start earning revenue much earlier the season starts. Furthermore, early marketing will allow the company to have sufficient amount of time to make some changes and modifications in the marketing process.

Strategy 2: May 2018 to Nov 2018 – The domestic people awareness campaign is proposed to be started in May 2018 so that it can be ended before the start of the next summer season. Similar to the previous strategy, the main objective of this strategy is to raise awareness among the people before the season start so that customers start gathering early in the season.

Strategy 3: May 2018 to July 2018 – This strategy implementation is to be finished before the previous two strategies because it is most vital in attracting more and more domestic customers. As per initial estimations, it is expected that due to the marketing campaigns, many people will pre-book tours for summer season (Kladou & Mavragani, 2015). Hence, it is important to revise the price structure so that the customers book the tours based on the revised price structure only.

Strategy 4: June 2018 to September 2018 – The app development and website launching processes will have to be done before the start of the season so that the customers can book services using the app and website. Furthermore, if the development is completed early, there will be sufficient time to detect issues and bugs so that they can be addressed easily.

The possible areas of expenditures are shown in the following table.

Marketing Campaigns	$         25,000.00
Hire Agents	$         20,000.00
Promotions through Digital Media	$         25,000.00
App Development	$         30,000.00
Total Implementation Cost	$       100,000.00
Agent Fees	$         20,000.00
Application Maintenance	$           5,000.00
Tour Expenses	$         15,000.00
Total Operational Cost	$         40,000.00
Increase in Profit	$       100,000.00
Revenue Benefits from Promotions	$         50,000.00
Total Benefit	$       150,000.00
Discount Rate Used	5.00%

 
For the cost estimation purpose and determination of cost benefit, the following table is used.

Analysis Variables:
Discount Rate Used	5.00%
Annual Benefits	$   150,000.00
Annual Operational Costs	$     40,000.00
One-Time Development Cost	$   100,000.00
				Year of Project
		0	1	2	3	4	5	TOTALS
Economic Benefit		$0.00	$        150,000.00	$        150,000.00	$          150,000.00	$        150,000.00	$      150,000.00
Discount Rate		1.0000	0.9524	0.9070	0.8638	0.8227	0.7835
PV of Benefits		$0.00	$142,857.14	$136,054.42	$129,575.64	$123,405.37	$117,528.92
NPV of all BENEFITS		$0.00	$        142,857.14	$        278,911.56	$          408,487.20	$        531,892.58	$      649,421.50	$     649,421.50
One-Time COSTS		$(100,000.00)
Recurring Costs		$0.00	$         (40,000.00)	$         (40,000.00)	$           (40,000.00)	$         (40,000.00)	$       (40,000.00)
Discount Rate		1.0000	0.9524	0.9070	0.8638	0.8227	0.7835
PV of Recurring Costs		$0.00	$         (38,095.24)	$         (36,281.18)	$           (34,553.50)	$         (32,908.10)	$       (31,341.05)
NPV of all COSTS		$(100,000.00)	$       (138,095.24)	$       (174,376.42)	$         (208,929.92)	$       (241,838.02)	$     (273,179.07)	$    (273,179.07)
Overall NPV								$     376,242.43
Overall ROI
								1.3773

Since a number of different strategies are to be implemented, there should be some key performance indicators that should set the standard against which, the outcome of the implementations will be judged. Hence, the key performance indicators for this particular strategic implementation at Scooby Tours are as follows.

• The number of domestic customers should increase by at least 20% than the number in the current season.
• There are at least 6000 pre-bookings of the tour services.
• Ten new agents are hired for managing the bookings and the marketing processes.
• The developed mobile app is downloaded by at least 25,000 people of the country.
• The profit at the end of the next season should be at least 25% more than the current season’s collections.

Conclusion

This report discusses in detail regarding the possible marketing mix strategies and steps that are to be implemented by Scooby Tours in order gain a better hold on the domestic market. While the company already enjoys a lot of popularity among the international visitors, it is yet to get hold of the domestic market due to a number of reasons. The company has set the prices of the tour too high for the most of the domestic population to afford whereas other competitors charge much lesser prices for the tours. Again, there are not sufficient marketing promotions within the country and hence, very few people know about the tour packages in the selected locations. In order to address these issues, some recommendations have been provided regarding new marketing strategies that should be implemented by Scooby Tours.

References

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