Business Plan of Hooray Sports Tour Operator

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Introduction

The Hooray Sports Tour Operator is a UK based sports operating company, which would be established in 19, XYZ, central London, UK. The basic objective of formulating such kind of machinist is to offer the best package of tours to more and more sporting events with games regarding favorite seating, exclusive accommodations, caretaker services, professional traveling, superior service for the interested spectators and so one. The company would be dedicated to organize enjoyable sports with travel enclosure for fans and Organisations seeking the scope to emphasizing and gratifying their major customers, shareholders, partners, or personnel.

Beside that along with taking the concern in mind, any of the combination offers the customer chooses rather than maintaining the promise of all serving the every provisions of providing the customers tickets as well as feelings that they would never overlook. A prime vision of encompassing with a dream sports travel package to the interested clients, Hooray Sports Tour Operator will be designed to dole out some specific packages involving summer games, winter games, world cup session, football traveling, hockey, baseball, basketball, auto racing, professional tennis, professional golf tour and travel.

The company would be initiated by the three young entrepreneurs pointed before based on the partnership agreement where they will invest 30% of total estimated capital of £8000000 while the rest 70% capital is expected to be invested by a recognized national ARP bank for running the operations for the next 5 years. Targeting Korean people who posses adequate interest in UK sports travel operations, the company will need personal plot and building, trained and energetic agents and obviously contracts with 70 hotels inside the home country and abroad for with an initial motto of enabling the clients to “Get the best experience and excitement” from its operations.

Executive summary

Here the business plan of a UK sporting operator is going to be explained where a variety of issues would be discussed. Such planning will begin from the personal history of the initiators, their skills, capabilities, and contribution to the business. Then the environmental context will exemplify current market regulatory variables, competitive situation, and finally, the SWOT and PEST analysis. Market testing will evolve the pre- operation acceptance examination of the services of the company.

Package and line description, supply chain value and company assets will be placed in growth segment. Marketing plan will disclose tools, customers, pricing and budgeting of marketing management. Financial plan will disclose 1 to 5 year pro- forma financial statements while Organisational and operational plan will explain company related personnel, training, scheduling as with structural design. Contingency plan will suggest for risk protecting issues, action plan will indicate actual timing for starting the venture and lastly, concluding part will focus on some logical reasons for formulating and financial part of the business.

Entrepreneurial skills and opportunities

Entrepreneurs’ capabilities and qualifications

• The three entrepreneurs named Garry Potter, Keith Ford and Henry Newman have recently completed their MBA degree from XYZ Business School, UK in Tourism and Hotel Management.
• Additionally, Potter has 3 years experience of working with the famous TUI travel business in UK, Ford had completed a special 1-year course in event management from a private institution and finally, Newman is still gathering experience by working as assistant marketing manager at his father’s local sporting club named Sky Mantra.
• Three of them are British by birth also have been wholehearted of formulating such kind of business by their academic coursework as the best implementation of such learning as well as personal interest that has been motivated by different types of extra curriculum practiced in their personal life and experiences.

Objectives and motivational factors

• SBANC, (2008) explained that the basic purpose of formulating such kind of venture is to offer the best sports travel experiences to the interested customers in a cheap rate rather than other national operators along with utilizing the increased opportunity. The growing demand of people to spend their leisure by differentiated and flexible sports tourism facilities, which makes this sector as prospective profit generating business now- a- days.
• The external influential factors have also played major roles of taking such motives like those that Newman’s father had assured to provide necessary assistance in this regard. One of Potter’s friend who have completed his MBA degree from Harvard Business School in Marketing had promised to take responsibility as marketing expertise of the company and one of their faculty advised had also promised to contribute in managing the firm’s link with different hotels outside the country have provoked them a lot for formulating Hooray.
• Hence, Peter longs to the Agenda Travel Company, it seems to be their role model entrepreneur since he had been able to visualize people’s desire of enjoying travel experience with favorite sporting moment in a combination offers. It is now one of the best scope of expanding today’s both travel and sports management industry in a new format of sports traveling for huge spectators of different countries of the world regarding World cup, Olympic games and other popular events.

Opportunity Recognition

• Formation of a new company like Hooray Sports Tour Operator poses a number of opportunities for the entrepreneurs since public expenditure for this purpose has been raised dramatically year after year, local government is also liberal of supporting such companies and finally the major advantage of globalization.
• After analyzing the upward growth of the industry by adopting their personal skills and knowledge for operating such function, the initiators are become pulled of starting Hooray Sports Tour Operator for gaining a satisfactory benefit soon.
• Finally, the entrepreneurs are both (theoretically and practically) acknowledged about several aspects of running the business including accommodation, package setting, transportation management, on- line dealings, ticket management, travel expertise, financial setup, marketing, recruiting of guides, other essential personnel, and so one.

Results from Marketing Research

Customer analysis

The target customers have been elected interested spectators from South Korean zone as several people from Singapore, Taiwan, Hong Kong etc. countries, which are now- a- days identified as “Tiger” economies countries of Asia by World Bank. Along with those areas general interest in this kind of operation, Korea is now can be characterized as one of the successful accomplishment of export- oriented growth factor with a strong tie among banks, government, and other corporations associated with efficient technological knowledge and high disposable income and investment feature.

So, the target market can be highly appreciated because of its position as second country of Asia in terms of economic growth and development with per capita income of approximately $14000 indicating the expected and potential customers’ affordability for enjoying luxurious international tourism and sporting events.

Conducting primary research

Zikmund, W. M. (2006) argued that survey and observation methods have been conducted as research module by which survey involved asking some relevant questions regarding the sports travel industry, company aspect, package association and other issues concerning products and events. Zikmund, W. M. (2006) and Saunders, M. Thornhill, A., & Lewis, P., (2003) also added that the observation simply involved understanding the behavioral pattern of the target respondents in terms of their choice, spending pattern in this sector and desire of enjoying such packages. At a glance-

• The questionnaire reflects public attitude and perception towards UK sporting tourism, budgeting, hotel service, expected venue etc.
• About 200 people from Singapore, Hong Kong and Taiwan have been conducted for the survey.
• Among them, about 20 potential spectators had already been demonstrated with a short local baseball and football trip with airlines and hotel service situated in London as a part of sampling plan in March 2009.
• After conducting such survey and observation, it has been estimated that 80% of the target customers pose keen interest in UK sports sightseeing among which 60% has high curiosity in football, professional tennis and golf, 20% hockey and baseball and the rest 20% in other options. Again, 45% surveyed respondents are less price sensitive of the entire package, 25% are somewhat sensitive while the existing 30% desires to have a reasonable ticket price along with better accommodation and traveling. Similarly, 40% likes to have the package tour in various places of UK, Asia and Australia, 5% has the desire to have trips in African countries but most have particular interest in Europe and USA based events.

Conducting secondary research

Sekaran, U. (2006) added that the ssecondary research involves analyzing online information, public reports, journals, and magazines, which had been utilized for the following reasons-

• The GDP growth pattern of target audience as well as their affordability, per capita income and traits criteria have been analyzed through such research,
• 7 reports are particularly helpful in this regard as- demography and population, economy, technology, legal concern, industry demand and competition etc.

Environmental analysis

Hitt, M. A., et al (2001) addressed that today’s international tourism is growing at an increasing rate although there is a high pressure of economic recession in each of major economy of the world while the single tourism industry has achieved one of the top positions than other ongoing industries, according to the historical suggestion; holiday traveling is most flexible to customer expenditure than any other discretionary consumption. Thus as an expanded art of that vision many established tourism companies in the world as well as in UK started a new journey of sports tourism to meet the supplementary needs of worldwide customers who like to enjoy their past time in visiting newer zones. It also urged to the pure entertainment thresholds spectators of their favorite sport items in different parts of the world.

As a result, today the UK sports traveling sector consists an individual industry that is showing its prominence in Middle East, Central and South America, South Asia and North Africa. Paloni, B. (2003) stated that the growing opening out of this highly valued sector is contributing about 9.4% of the total GDP of the country while the total revenue in this sector is £134.7 billion; so, many of such operators are now eligible to be established based on foreign customers only.

Sports Travel Reviews (2007) argued that the saturated market already contains a large number of strong customers along with mainstream tourism operators’ such as Burleigh Travel, Crystal Sport Train and Play, Carrick Sport, Edwin Doran Sport Tours, DIR International, Gulliver Sports, ETS Sports Class, Pure Africa, Pure Alpine Holidays, Shire Sports, Sweet Chariot, Titan Sports, Team Link Travel and Travel Place. It has recognized name in UK- based sports tourism operational and specialized agencies for competitive games, coaching and training holidays.

Simply, the environmental analysis can part significance through an explanation of the following variables-

Demography and population

MacDonald B. S., (2005) stated that one of the major potential target markets of UK sports tourism is South Korea. Korean populations are generally well known for their previous successful stories regarding affordability. According to 2004 statistics, the total population South Korea is 48598175 while the major cities are Seoul, Taegu, Pusan, Taejon, Inch On and Kwangju constituting most of the population’s living place. Additionally, there exists 700 million people within 1200-kilometer areas of Seoul, about 1 million of population exists in 43 cities, which is possible to accomplish within 3-hour voyage from the airport of Incheon and could be enhanced to 100 million within the year 2020 as a further potential indicator for sports journey.

Economy

It involves the economic considerations of both regions regarding UK and potential customers’ group origin in South Korea. Thus, UK is perceived as one of the strongest economic power in the world with a very high GDP growth. On the other side, some of the South Korean countries especially including Taiwan, Singapore and Hong Kong had contributed mostly for making a “Tiger” economy of Asia by implementing export- heading growth pattern with an inexpensive but affluent labor force but somewhat the mostly efficient labor expertise exportable in the international market at highly expensive rate.

Furthermore, it poses a keen relationship among various economic parties, like- government, bank and business as a shape of major conglomerate termed as chaebols. It is also the second country of Asia regarding as a recognized Economic Cooperation and Development counterpart. Therefore, the country’s GDP growth was 3.1% and 4.6% over the year 2003 and 2004 with a struggling rate of 4% indicating the real GDP of 21.3% in 2004. Average standard of living is developing by 4% with per capita income of $14000, which created a history of a rising rate of 100- fold.

Technology

The sports tourism industry is technologically very much developed since many of the major operators have online lodging for both B2B and B2C customers while online destination is typically used for B2B brands, like- beds online, hotel beds, and B2C criteria for late rooms, Asia rooms and Hotelopia. It is suitable as lower pricing approach for the sophisticated operations in Australia, Austria, Belgium, China, Canada, Germany, Italy, India, Finland, France, UK, USA, Sweden, and Switzerland. Furthermore, many well- established companies in the industry offer the access to download electronic brochures at free of cost by a simple click, collection of news through e- mail or ticket management through an online option. Facilitated with high technological options, the industry is also prosperous having most of the customers from high- tech broadband supplemented nations.

Legal concern

David, Holt H. (2002) stated that it involves forthcoming legislation that would affect product and service, distribution and promotion strategy. In case of sports travel industry, the national and international boundaries, political barriers, and government support are most influential factors for frequent operation. For example, the FEZ conduct as the “Dynamic Hub of Northeast Asia” appears on of the major legal concern for flexible operational opportunity for international dealings of such corporations.

Industry Demand

The sports tourism is one of the most optimistic sectors in today’s economy because of huge public demands those are upgrading at an increasing rate. Since the year 2009 it has been experienced that a huge earning of £134.7 billion from the mainstream sector of tourism while this new segment of this industry can be expected to take part 40% of the total revenue. It would be gathered by the proper utilization of this upward demand trend with value satisfaction regarding top accommodation, annual membership, admission, transportation, travel expertise, and other requirements.

Competition

The UK sports traveling shows a monopolistic competitive economy while it represents a number of competitors namely Roadtrips, Sportsoption, DIR international, Jonathon Markson Tennis, Play Africa, Sporting Traveler, Shire, Sports Tours UK, Sweet Chariot, and Team Link. They tend to offer football, rugby, hockey, netball, basketball, golf etc. options to individuals, schools, clubs, colleges, universities and associations with diversified services like- general, coaching, sports tuition at summer camps in local and abroad areas, teaching on language capacity evolving English, Spanish, French as an extra- offer etc. Most of such competitors offer those packages in UK locally, USA, Africa, Australia, Sardinia, Spain, and other parts of the world.

So, the overall environmental context can be visualized through a SWOT and PEST analysis as below-

SWOT analysis

• Strengths: – The UK sports tourism occupies following strength factors-
  • The Travel Industry Association of UK has discovered that traveling in other countries has rose up above 4% along with an increase in ticket price about more than 5%, which clearly indicates huge public demand in this sector.
  • The sector-based growth accomplishes alongside growth of supporting industries like- transportation, hotel, internet etc., which can practically act as strong benchmark.
  • The rapid economic growth of China, Russia, India and Poland ensures the affluent class which is the most potential customers of UK sports traveling which can be thought in stable growth and prospective for high profit margin as a whole,
  • Government assistance of the domestic and targeting countries is acting as one of the major positive catalyst for future expansion of the industry.
• Weaknesses: – Several weaknesses are-
  • The industrial concept is confined within a limited segmented customer segment characterized by high affordability and thus restricts its operation within mid- income group.
  • Requires high investment and costly operation;
  • Complexity in liaison and international connectivity,
• Opportunities: – The industry also poses a number of opportunities, like-
  • Global and national patronage;
  • Growing concern of people as a direct spectator of their favorite sports shows;
  • Possibility for the lion contribution of conventional tourism industry with proper utilization transportation, logistics, and event management curiosity.
• Threats:- The industry is also suffering from some threatening factors, like-
  • UK sports’ traveling is recently somewhat lagging behind USA tourism.
  • Ever changing demand of people,
  • Current violence and frequent physical hampering on international players are creating fear in the mind of the interested tourists, which is acting as a reluctance factor to make fewer journeys as sporting spectators.

PEST analysis

• Political factors:- Today, the world is experiencing with several ferocious terrorist attacks at inter- country and intra- country railway and airlines travel system for which the local government has obligated stricter regulations on immigrations by raising the inspection on sporting spectators and tourist at all. But, generally, government of both original and prospective countries are flexible enough to make a multinational visit for global sporting journeys like- Olympic games or World Cup with flexible tourism laws and ordinance.
• Economic factors: – The sports traveling industry of UK seems to be productive enough since it is contributing by 9.4% of total GDP of the country. Besides, the industry is highly oriented by affordable customers who are mostly price insensitive with a capability to make enough payment for running with the initial profit for most of the companies.
• Socio- cultural factors: – The industrial socio- cultural background is supportive enough since it is consisted of huge potential customers who pose and have disposable income for enjoying such recreational mode.
• Technological factors: – The industry is effectively experiencing with newer technological assessment practiced by various corporate groups. Such steps involve online booking facility, electronic brochure collection, hotel reservation, ticket collection and other customized options.

Competitor analysis

The marking research shows the result that UK tourism industry is already saturated with numerous conventional competitors. The sports traveling sector is not exceptional from that. Thus, several homogeneous competitors of this industry are Carrick Sports, ETS Sports Class, Hangtime Holidays, Play Africa, Sporting Traveler, Shire, Sports World Group, Team Link Travel, Tuscan Tennis Holidays, Travel Pack, Roadtrip, and Sportsoption. Their offer are specialized in dealing with accommodation, relocating tourism opportunity, games and sports tickets, eatery and representative services in UK, USA, Brazil, Africa, Australia, Asia etc. region of the world. However, the competitive analysis of the industry can be examined by Porters 5 forces model of competition as below-

Threats of New Entrants

Since each industry suffers from a common difficulty in identifying new competitors, unexceptionally the new entrants of sports travel industry often have quite potential to be threatening to incumbents. Griffin, R. W., (2006) stated that it involves two particular reasons-

• Barriers to Entry: Kotler, P., Armstrong, G. (2006) argued that Barriers of entry would include the following:
  • Economies of scale cause marginal efficiency for the incremental increase in size.
  • Service differentiation,
  • Capital requirements for marketing and other crucial business functions,
  • Switching costs that customers incur while getting services from different suppliers,
  • Access to distribution channels has a major impact as entry barrier.
  • Government policy can also control an entry in the industry.
• Expected retaliation: Dibb, S. Simkin, L. Pride, W. M. & Ferrell, O.C. (2001) stated that it Involves the reaction of other firms in industry.
• Bargaining power of suppliers: In case of sports traveling industry, suppliers are different hotels and transportation agencies whom are merely powerful as-
  • It is dominated by few large companies.
  • Less available satisfactory services,
  • Suppliers’ contributions are critical for success.
  • Involves high switching costs.
• Bargaining power of buyers: Saloner, G., Shepard, A., and Podolny, J., 2001 explained that the bbuyers are powerful because of purchasing larger portion of products and less flying away opportunity but in this industry buyers have less scope for bargaining since the package tour prices remain fixed in most of the cases.
• Threats of substitute products: It causes great risk when substitute’s price like- thorough sightseeing is lower and capability of performance is similar more than competing ones.
• Intensity of rivalry among competitors: It occurs for the challenge of competitive action or improvement in market position regarding price, quality and innovativeness in event management, supplementary services or information exchange.

Market testing

Kotler, P. (2006) mentioned that this includes several situational issues, like-

• In this phase, about 20 interested customers have been invited to have a trip in UK for being spectators of baseball and basketball tournament with free tickets, airlines and hotel services along with various mode of entertainment for the purpose of understanding the level of acceptance to those services.
• The test marketing activities were conducted among mid- aged couples ranging from 40- 55 who’s other demographic, geographic and psychographic characteristics are shown below-
• Better-educated and white color population,
• Average family income of $15000- $20000.
• Four couples from Singapore, 4 from Hong Kong and 6 from Taiwan,
• 8 service holders, 6 businessmen and 6 were housewives.
• Most of the participants were from high and upper- middle segment of the society.
• Most of them sought major benefits as accommodation, transportation and event security while 60% of them were regular and 40% potential users of the company’s offer.

Comments on Market Testing

• Several comments were-
  • “Exclusive journey of excitement”,
  • “More than traditional package”.
  • “Sporting with pure enjoyment” etc.
• Several issues will be adopted as a recommendation of this test marketing, as-
  • Customization of information orientation,
  • Marketing of the company by emphasizing Korean cultural values,
  • Hotel adjusted restaurant service etc.
• The packages can now meet the following specific needs of the customers, like-
  • Membership package,
  • Temporary residential service,
  • Air traveling with private luxury coach service,
  • Gift package,
  • Sight seeing opportunity,
  • Expert travel guide,
  • Extra nights and games,
  • Online leaflets,
  • On- site qualified tour host service.

Growth of the Business

Hooray Sports Tour Operator is a UK based sports tourism machinist aiming to be located at central London, 19, XYZ road with the preliminary purpose of delivering a number of exclusive packages to the customers who are geographically located in South Korea. The company targets to supply a number of enclosed sports holidays for group or individual troupes involving summer and winter tour specials, football, baseball, hockey, basketball, tennis, auto- racing etc. to the high and upper income group of Korean tourists with a mission of “Get the best experience and excitement” from the first day of its operation.

Others information are as following

Target customers

Although being originated as an UK company, Hooray Sports Tour Operator is targeting South Korean people including high and mid- income group including young, middle and old- aged peers, individual sports fans, players or teams who generally have keen interest in world sporting sightseeing occurred at different location of the globe. Those groups of people are invited for having a fresh, fun, excitement and gratification from the entire tour package that will be offered by the company while it is planning to cheaper the packages enough so that this enjoyment procedure can be expanded among the mid- group potentials by percentage increased of the total market.

Size and scope of the venture

Primarily the company would start its operation with £8000000 in cash and its central office would be located on a private area of 500 square feet where it will develop an one storied corporate headquarter on 400 square feet at 19, XYZ road located in a commercial zone of central London at a general office area. It would posse’ adequate facilities with car parking, sewage, plumbing, gas and electricity and air conditioning facilities with competent and efficient staffs for are proper maintenance.

Additionally, Hooray Sports Tour Operator will also have three subsidiary offices located at Taiwan, Hong Kong and Singapore while the company will arrange most of its events as well as most potential customer base by using rented office space on 100 square foot having the standard facilities pointed as above. The company will also have mutual contract with 20 hotels in UK, 10 hotels in Canada, 10 in New York and 10 in Vancouver and 10 in other zones along with contractual agreement with 10 national and international airlines.

Offered services

Hooray Sports Tour Operator has planned of serve a number of customized sports traveling packages to the fans characterized by diversity and desire. Those are as below-

• Baseball tour packages at Hall of Fame in 2010 will include the following parties-
  • London A’s @ New York
  • Colorado Rockies @ Boston Mets
  • Oakland A’s @ London Blue Road

Additionally, 3 nights/ 4 days residential offers, package of attachment to the unit, admission, private coach service, reception with lunch, on- site guide service, tour at the safari park, unrestrained gifs, travel expertise etc.

• Monthly e-mail brochures free of costs.
• Summer season sporting packages that will be located at cultural and financial heart of London with an attraction of four inheritances of the world visualization, shopping, eatery and cultural events.
• Winter season sporting packages will accompany World Cup 2010, Champion League closing, and 2011 London and Vancouver packages consisted of 3000 athletes from 50 heterogeneous countries in exclusive competition, comfortable hotels, eclectic food services, and extra games tickets.
• Ticket preferences based on private event transfer, directive support, airport transit and some more,
• 24 hours on- location hotel facilities which can be categorized as-
  • Downtown extravagance and luxury,
  • Standard and VIP room,
  • Suburban and city center first class.
• Customized football tour package in more than 30 cities for college basin game, super or pro- bawl scope at UK, Florida or Miami with the popular player, group or arena.
• Hockey tour package in Canada, Toronto, or NHL games with comfortable sitting, staying in standard hotels, thrill, ideals and recognized fame.
• Baseball tour package in the renowned Fenway, Yankee, or Wrigley stadium by enjoying the best awesome events of live series of world in more than 20 ballparks, Multi- city group or MLB teams.
• Basketball tour package combining of top flying, frame- rocking or pure court observing action for the spectators with bright stars and favorable venues at New York, celebrity- oriented centers in LA or the NBA games in about more than 20 locations.
• IRL, NASCAR or Formula- 1 car racing package with the company’s Porsche or BMW experience of racing accomplished by an European thrill and beautiful sight. Furthermore, the package will also offer Indy 500, Daytona 500 or general racing facilities in a convenient dealing.
• Tennis travel package will induce the worldwide strongest athletes from the stirring zones taking part in vital tennis tournament with a test of Wimbledon tennis, stadium of Arthur Ashe or open tennis tournament in USA.
• Golf package will make a chance to visit conventional Britain, beauty of Augusta Masters or USA venues while the company will arrange Friday and Sunday golf fascination at afternoon in the golf ground of local Western hotel. The possible trip will take place in USA, PGA, and Masters.

Special facets on World Cup hotel service etc.

• Personnel and office equipments: – Hooray Sports Tour Operator will need some of the furniture and components to decorate its head office and branches like- chair, table, fan, carpet, desk, computers and other materials for exterior and interior designing.
• Suppliers and supply chain management: – The Company will be initiative in direct dealing its distribution network. The competitive advantage can be achieved with straight selling to the fans through these less expensive channels for advanced control in booking and experiential relationship. The effectiveness will extend throughout agent management, shopping or call centres for resorting or servicing later as a tactic of building loyal customers.
• Growth measurement: – Hooray Sports Tour Operator will have one head office and three other supportive branches as the total number of physical outlets, ROI as assumed to be 10% at the 1st year and tend to be stable at year 2 and 3 and then rise by 5% annually.
• Business-level harvest strategy: – Hooray Sports Tour Operator will have the following options to prefer the targeting strategy for itself.

Competitive Advantages

Mishra, S., (2007) addressed that cost leadership refers to the integrated set of proceedings for delivering a product or service at lowest cost rather than the competitors that are appreciated by the customers while differentiation means producing those goods, which are perceived by the customers as different in, roots which are vital to them.

Letting behind those alternatives, Hooray Sports Tour Operator will choose focus strategy concentrated on both cost and differentiating the tour packages. The strategic focus accomplishes a set of actions for delivering the intended services that serve the need of a particular competitive segment.

Skinner, S. J., Ivancevich, J. M. (2003) stated that it will integrate both the two focuses in a narrow view of concept since it is going to start its operation with having a special concentration on Korean people by offering them several sports tour packages. The normal market price by gratifying “Affordable excitement for one- to- all” as an escalation of cost leadership and promoting those items in differentiated ways for meeting the needs of those segment in virtually endless way by adopting focus differentiation.

Chernev, A., (2007) stated that the major advantage of this strategy is the dismissing of the narrow target differences from the balance of the industry and with this Hooray Sports Tour Operator will expose the opportunity to be more efficient and effective than the competitors. The major disadvantage involves the breadth of a target is simply a matter degree. Equally, competitors may “out- focus” the focuser, potential attention from the competitive pursuit and lastly, narrow customer segment may become similar to the whole.

The marketing strategy

The marketing of Hooray Sports Tour Operator will be performed by the marketing department of the company. The packages will be summer and winter seasonal ones, football, hockey, baseball, hockey, racing etc. The operator will deliver such items ranging from £200 to £4000. Hooray Sports Tour Operator’s major objective is to establish itself as a distinctive operator of sports traveling in the industry that will the foremost and single name in the selective target customer’s mind in terms of its care and lower rate of each package so that the middle segment of the society can also enjoy the excitement of global thrill of sports.

Therefore, the department of marketing will have the responsibility to ready a marketing plan for serving, categorizing and customizing the required packages. Running on start- up capital of £8000000, when Hisrich, R. D., Peters, M. P. (2006) argued that the entrepreneurs are expecting to reach the venture at break- even point at the end of the first year of its operation and thus will be able to enjoy a profit margin from the later second, third, fourth and fifth year.

Market situation

The tourism industry of UK is prospective since it is contributing about more than 9% ratio of the total GDP of the country by entertaining millions of global tourists. Thus, the endless fanatic motive for famous sporting events has expanded the scope of this sector by evolving huge dispersion of enjoying sporting events in the forthcoming years. The primary customers have been identified as high and mid- income ranged South Korean people who have the desire to pass their leisure of being a part of worldwide famous UK sporting operator to become a practical spectator of their favorite sporting events but always not ready to pass the most expensive portion of their income to enjoy such migraine tourism.

Market segmentation

Shane, S. & Delmar, F., (2004) stated that the company will divide the market in relation to its demographic and psychographic condition. The other demographic and psychographic profile of the target customers are presented below-

Demographic segmentation

Stoner, J. A. F., Freeman, R. E., & Gilbert, D. R. (2006) mentioned through this, the customers can be divided into groups based on several variables like- age, gender, family size, family life cycle, income, occupation, education, religion, race, generation and nationality as following:

• Since consumers demand change with age, Hooray Sports Tour Operator will use age and life cycle segmentation offering different special packages, hotel services and sight- seeing opportunity to different age of people, like- special football, hockey, basketball packages for teens and newly married couples, auto racing and tennis for mid- aged fans or special summer games package for individual spectators.
• The nature of income is very much significant since the company is targeting customers having the income ranging from $15000 to $50000 for being affordable to adopt the offers.
• Education is aspect customer segmentation since Hooray Sports Tour Operator will expect to have more white color and better-educated population as their customers.
• Here, nationality plays an important role as primarily the company is targeting people who are South Korean as an identification of nationality.
• Hooray Sports Tour Operator most probable customers will be business personnel, teacher and housewives by occupation. However, professional sporting personnel are also under consideration.

Psychographic segmentation

Thompson, A. et al, (2007) explained that the psychographic segmentation involves dividing the market on various social class, lifestyle, or personality traits as below-

• Hooray Sports Tour Operator can segment the target market regarding social class by choosing upper class and upper- middle portion of the society.
• Lifestyle involves pertaining people who have willingness and habit to make such trip.

Market targeting

It involves evaluating market segments while Hooray Sports Tour Operator will look upon three factors- size and growth of the segment, segment structural attractiveness and its own objectives and resources. Other factors are-

Selecting target market segments

Here, the target market is South Korean customers who share common needs or characteristics that the company is deciding to serve. Williamson, D., et al (2003) argued that selecting target market segments have four major options such as undifferentiated marketing, differentiated-marketing, concentrated marketing and finally micromarketing, where the concentrated or niche marketing would be appropriated for the argued company as it is the strategy to covering the market while it goes with a large share of one or a few segments. As a new venture, this venture would have some limitations regarding its resources and capabilities for which it could be decided to go after a larger customer basin of European, Yankees, broad Asian or African groups rather than the local. The specific specially range of Korean spectators as their customers, it has decided to go forward concentrated marketing for achieving a better position.

Market positioning

Through a better positioning, Hooray Sports Tour Operator will able to be positioned in the tourists mind on important attributes, like- lodging, transit service, expert guidance, package pricing, entertainment and convenience etc. Other issues are-

Positioning map

Stutely, R. (1999) explained that a perceptual positioning map for showing the customer’s perception of this operator versus others as below:

Choosing a Positioning Strategy

Mishra, S., (2007) pointed out that choosing a positioning strategy would induce:

• Identifying possible competitive advantage regarding service, channel and people and image differentiation,
• Choosing the right advantage regarding the number and attribute benefits,
• Selection comprises of 5 alternatives among which Hooray Sports Tour Operator will go for “the same for less” value proposition as-

Distribution situation

Primarily, the company will provide direct distribution service through it 4 offices in London, Canada, New York and Korea along with its 24- hour active internet facilities for booking and other issues.

Size of the market

According to the research, there exist about 350000 potential people in several cities of South Korea. Also, more than 50% of those people regularly visit different sites in the web. There is also possibility to reach an additional 15000 customers who are generally habituated in such travel while this secondary market can be penetrated through advertising, word- of- mouth and distribution of marketing literature.

Thus, it is estimated that the potential market is between 50000 and 100000 people in while the objective is to reach 10% of the primary market and 5% of the secondary market. So, in the 1^st year, the market would consist of approximately 2500 customers.

Pricing consideration

Hooray will adopt value- based pricing by charging somewhat lower price than many of the competitors. Different prices for its several packages will be-

BCG Matrix and Hooray Sports Tour Operator

David, F., (2008) stated that the BCG matrix is a portfolio method of planning which evaluates a company’s strategic business units regarding market growth rate and market share. Thus, this condition of Hooray Sports Tour Operator can be shown as-

• Stars are high- growth, high- share business or products.
• Cash cows are low- growth, high- share business or products.
• Dogs are low- growth, low- share business units in high- growth market.
• And finally, it is expecting to occupy the question mark position since it is a high- growth, low- share business in a highly competitive market. Here, the company is required a lot of cash holds the share, let alone increase it with posing a high opportunity of becoming star phase of its business in future.

Opportunities/ threats analysis

Opportunities

• The sports traveling expenditure has rose more than 4% in recent year.
• In times of economic disorders like- recession, global tourism companies remain highly profitable in terms of huge market demand.
• Possibility of entertaining the target market perfectly because of existing economic, social and political tie of it.
• The mid- income entertainment concept of the firm would be helpful for ensuring high market growth for it.

Threats

• The dispersed terrorist action on various sporting events and players would keep the company under pressure.
• Niche marketing view can be any time attacked by the similar positioning landscape of the competitors.
• Because of high industrial growth and exposition of many other types of similar companies, Hooray can be generalized as with others in clutter.

Strengths/ weaknesses analysis

Strengths

• The economic infrastructure of the operating market would be helpful in terms of disposable income, habitual facts and perception towards the operator.
• Sound financial structure for attracting high investment ratio.
• Attractive for rational customers calculative for cost- benefit analysis.
• Trained and efficient guides and stuffs.

Weaknesses

• Limited offering than many other competitors in terms of Organisational resources.
• Limited budget for marketing and promotional effort.
• Limited human resources,
• Narrow focus of market segmentation

Issues analysis

Hooray will examine the following issues-

• Will Hooray compete effectively?
• Will it stay in sports tourism industry?
• Should it divest this package line?
• If it stays in this business, should it continue the present services, distribution channels, and price and promotion policies?
• Will it retain loyalty of its start- up channel partners?
• Should Hooray increase its advertising and promotional expenses to match competitors’ expenses?
• Should it pour money into R & D for developing advanced features, sound and styling?

Financial objectives

• Earn an annual rate of Return on Investment (ROI) after the 1^st year of 10% after taxes.
• Reaching at break- even point at the end of the 1^st operational year while total revenue and cost will be £1429250.
• Produce net profit of £200000 at the end of the 2^nd year of 2011.
• Generating a net profit of £250000, 261402, and 400000 during the 3^rd, 4^th, and 5^th year of operation,
• Generating positive cash flows from the beginning of the business

Marketing objectives

Some of such objectives are as below-

• Gaining total revenue of in 2010, 2011, 2012, 2013 and 2014.
• Expand customers’ level of awareness for the company from 20% – 30% during the planning period.
• Expand the distribution in future.
• Aim for an average price of £200 to £4000 for different kinds of tour packages.

Marketing strategy

Numbers of selective marketing strategies are-

• Target market: Hooray has planned to target upper and middle segmented and valued Singapore, Taiwan and Philippines etc. customers,
• Positioning “Fun, thrill and enjoyment”,
• Package line: Baseball, hockey, basketball, racing, football etc.,
• Distribution outlets: Direct distribution with internet and 4 physical outlets,
• Customer service: Continuous service of offering quality tourism, e- mail, and call centers for reservation and gathering customer feedback, ongoing contact with loyal spectators by newsletters, telephone calls, fax etc.
• Service: providing entrance for extra tickets, which will be accessible before exodus throughout janitor of ticket along with general hotel, transportation, and amusement services,
• Sales promotion: Various promotional efforts will involve discounts, bonus packs, direct price reductions, advertising specialists, sampling, free giveaways etc.
• Advertising: Develop innovative advertisement campaigns reflecting its positioning strategy by emphasizing additional benefits and relative economies of each package offered. Different media vehicle will be TV, newspaper, magazine, radio, brochures, leaflets, internet and billboards mostly exposed in Korean context.
• Marketing research: Increase a specific budget for improving the knowledge of customer decision-making process as with evaluate competitive reactions.

Marketing costs

The budget status for running marketing activities has been fixed at £8000000, which will be depleted as below-

Others.

Financial analysis

This plan starts with the total budgeting status of the company of £8000000 which will contributed by three initiators by 30% and the rest 70% will be delivered by POP Bank ltd. at a 5% rate of interest within 15 years.

Other features are

Projected capital funding.

Total = £8000000.

Pro- forma income statement.

Pro- forma balance sheet. For the year 2010.

For the year 2011.

For the year 2012.

For the year 2013.

For the year 2014.

Pro- forma cash flows.

Break- even analysis

After analyzing the pro- forma income statement for the projected years from 2010 to 2014, it can be understood that at the end of the 1^st year of operation, Hooray would be able to reach at a break- even point. It is the stage where the company revenue will be £1429250 and £1429250 of expenditures which clearly indicates a no profit no loss consequence that can be graphically shown as-

Operations plan

The entire business plan of Hooray will be entirely handled by CMT or Chief Management Team consisted of three entrepreneurs who will lead their operations through four departments of operation, marketing, and administration.

Operations department is to perform the major responsibilities of managing, controlling, motivating and evaluating human resources as well as making essential contact and linkages with backward suppliers as with hotels, airlines, clubs, sporting venues and other endorsers. Marketing department will run different marketing activities by specific emphasize on sales, promotion, advertisement, and research. Administration department will directly deal with customers regarding registration, ticket booking, package conducting, membership, handling of claims and complaints as well as internal auditing of the company like- financial and accounting related issues.

Other operations criteria of Hooray

The other operations related criteria of Hooray has been presented below –

• The three sister branches as well as the corporate headquarter of the company will be opened from 9 am to 8 pm at each day of the week except Sunday. However, the website will always provide the customers necessary services regarding the information, registration or other administrative services. Interested fans can conduct with physical and web link of the company for an advanced booking for any of their desired packages.
• There will be 20 general travel experts, 30 sporting guide, 10 drivers of private transportation, 8 security guards, 4 cleaners for all the branches of Hooray.
• Salary structure-

Besides the major three departments, the sub- tasks of operations department like- HR will be operated by hired external workforce who will be paid £15000. Moreover, new general or sporting guides would be hired on temporary basis regarding occasional demand, incentives of those employees will be set upon specific conditions, and short- run coaching or training service will be paid to the personnel for which contractual efficient instructors will be hired for part- time salary agreement.

Hooray will operate in the following criteria

• For the coming World cup, the company would provide by special international hotel lodging located in the stunning suburb, including 4 acres of garden, access to the vital highways, business avenues and pastime attractions. It also would be well-decorated rooms with satellite, air conditioning, TV, security and bars, swimming pools, gyms, volleyball and squash court, proximity to the local shopping centers, more selected rooms for guests etc.
• Football tour package with Miami, Florida and Canada etc.,
• Hockey weekend package at the Hall of Frame, Chicago or Québec.
• Baseball package at New York, Boston etc.,
• Basketball package at several university campus of UK,
• Auto racing for acknowledging the series of Sprint Cup,
• Golf and tennis experience at USA, UK and Canadian floors,
• Event- oriented generosity services.

HR planning

Expert guides are heart of Hooray for which management of such employees seems to be one of the most important factors of the operational plan. HR section of the company is obligated to carry a large number of tasks involving selecting, hiring, training, evaluating, compensating etc. but primarily the company will not provide employee benefits programs like- health insurance, retirement pension or some any other larger employee benefit assets.

Thus, all the tourist guides will be principally selected on know-how basis having experience of minimum 2 years in the related field such as- completion of university junior degree course on tourism or any private course regarding that issue. Inexperienced people can also be selected because of the specific consideration or evidence of past performance of any specialized proficiency or efficiency.

Employment procedure

Johnson, G. Seholes, K. & Whittington, R. (2006) stated since the HR division is responsible for hiring process, at first it will reconsider the existing budget status for measuring the availability of funds. After that, it will assign the jobs, accumulate application and resumes and make an oral interview of the candidates. In such process, applicants who will be able to overcome the initial screening become assigned for a short practical test (differ for sporting and general categories) of making a tourism guiding for a local basketball, hockey or a neighborhood fall with 10 – 12 group of tourists. The participants must have a compulsory capacity of linguistic fluency in English, general Korean language, French etc.

Here, most prominence will be viewed upon people who know and apply Korean language most. But before hiring of such new workforce, the department will clarify the nooks and corner along with the salary status of the employment post. The employment procedure will also be practically more viable of conducting a background check by the company. The CMT’s approval will also be required for ensuring the employment positioning.

Chernev, A., (2007) argued that as the company wants to conduct the HR activities with effective external expertise rather than the owners, so the employment planning of HR management will be conducted by the CMT team own self. However, this technique will have a little more difference than the general employment scheduling; the exception will exist that the management team will place priority on strong academic background and energetic work effectiveness rather than the so- called rigidity of experience. Similarly, instead of practical test, here the applicant will be secondarily tested by a written examination focusing of recent related industry case studies for evaluating his or her power of judgment.

After the completion of twice-phased selection process of two kinds of tourists guides, the company will conduct special training course for which it has estimated £100000 that will be taught by external expert coaches or mentors. Such training program will involve-

• Previous training assessment,
• Development of forthcoming objective to a single individual,
• Development of scope of endless communication with each of the spectator,
• Plan of tapering,
• Special language course,
• Particular conception of the scheduled packaging programs,
• Providing of other supportive materials and elements for understanding the entire job,
• Knowledge of possible entertained customer’s familiar habit, customs, and norms.

Organizational plan

Vital factors for Organizational plans are given below-

Forms of ownership

Hooray will be formulated based on partnership agreement in Potter, Ford, and Newman. Some general issues are-

• 30% of the total amount of capital will be supplied by 3 partners, as-
  • Partner 1: £800000
  • Partner 2: £800000
  • Partner 3: £800000
• Each of the members will actively take part in Chief Management Team and many other operating practices.
• Company profits and losses will be equally shared.
• Liability will also be equally born by the three entrepreneurs.

The CMT will lie at the most powerful and controllable position that will be organized by three initiators who will also bear upon and run through operations, marketing, administrative and financial structure of the company.

Action plan

General action scheduling

• Operation manager will obtain a progress report through e- mail and voice mail as the daily problems and requirements can be worth fully communicated through such mailing.
• The HR manager, guides and other regular staffs and hired personnel will act under operations department while Hooray will assign 5 auto drivers, 4 security guards, 4 cleaners, and 15 general and 20 sporting guides during the 1^st year. After that, these numbers will be gradually increased.
• Monthly meeting will be conducted with CMT and major all employees regarding the growth status of it.
• Hooray will start its operation from January 1, 2010. Construction, design, fitting, contracting, and recruiting of employees are likely to be completed within 15 December 2009.

Marketing action scheduling

• In the 1^st quarter of 2010, Hooray will advertise in the local and popular South Korean newspaper as a new UK sports operator is going to offer exclusive sporting events at rational price with number of advantages for the fast- reservation.
• From the next month to 12, it will advertise by on TV, billboard, internet etc. with £95000.
• In 2011, 2012, 2013, and 2014 it will incur £75000, £85000, £76000, and £85000.
• Promotional programs will be started from March 2010 and will be continued until 2014.
• Marketing research will be conducted at 1^st half of 2010, 1^st quarter of year 2, last quarter of year 3, April – July of 4^th and 5^th year at the total costs of £30000.

Contingency plan

Like any other new ventures, Hooray will also incorporate some risk factors. Such as-

• Limited budget for marketing activities will pose as a restriction by which the foreign customers will be fully aware about its functioning.
• A number of established customers are operating on distinctive tracks for attracting the tourist concentration while Hooray will face some structural constrains.
• Form of partnership may lack adequate confidence of potential banks for funding.
• It will also run the event management with limited package travel than the general competition.
• Low- price factor may negatively influence customer’s perception to the business.
• It can also generally be affected by the global risk of terrorism or accidents frequently occurring in this industry.

Several steps can be taken to minimize such risks, as-

• Introduction of more items in the sports package,
• Building image of affordable rather than low- price package,
• Capital limitation can be uninvolved through the shift in ownership in Limited Liability Company (LLC).
• Developing CLV or long time customer value will be helpful for its long- term sustainability and growth.
• Adequate security for each of the sporting tour,
• Adequate insurance policies regarding the tangible and intangible assets can be adopted as a contingency factor.

According to Pandey, I. M., (2007) the budget for this contingency plan has been separately indicated in the 5 years budget status and thus shown in cash flow statement in an accumulated form. Thus, the fixed amount for this issue has been fixed as £100000 that would be saved in terms of cash or bank reserve and finally, to tackle several natural, financial, and other environmental distortions. Brealey A Richard & Myers, Stewart, (2007) mentioned that the entrepreneur must have adequate mental strength and preparation, such as- counseling, meeting or taking help from industry specialist or conduct special research done by hired team or professional research agencies.

Conclusion

At preceding, it can be argued that in the business plan of the new sports operator Hooray, each and every necessary factors have been focused ranging from formulating to funding including the company and entrepreneur background, contributing money, research for market identification and evaluation, market size, profitability. It also presented the growth potential, employment gratification, Organisational structure, marketing aspect, financial background and future motto, risk factors, suggestive phases against those risks have been individually clarified from a potential investors will get a clear conception of this new rising star in the sports tourism industry. Therefore, from this focus, some concluding comments about this plan and proceeding can be placed as following-

• The desire of formulating such business like- Hooray can be perceived wise enough as the industry is prospective in terms of demand, sales, growth, opportunity, assistance, and finally, the scope of globalization. In today’s context, while people tend to become more busy and want to have pure entertainment rather than some exclusive way, idealizing for such venture, which will go forward with that promise of serving those needs of getting a direct thrill. It also incorporated favorite games and sports observation as with additional sigh- seeing of relative fresh natural outlay is logical to predict of remaining the venture profitable with a better sustaining power than many other similar typed and sized industry.
• Simply the entrepreneurs pose a superior educational background that supports their capability to advance with such initiative. Additionally, their external expertise of them makes them more capable to bear with such responsible tasks. Furthermore, their personal monetary ability to invest in such kind of business helps a lot. So, all of those factorial advantage standardizes them the best personnel for starting the business.
• Since, Hooray can be predicted and hypothetically proved a profitable venture in the future sports tourism of UK with a larger customer base, ROI, profit margin and adequate demand factor, any one should invest money at the required 30% – 70% level to become profitable in future.

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