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05/03/2012

Case Study- Current Service Marketing 


Executive Summary

In Leisure Industry, the culture, behavior, range of various activities, as well as the taste and preferences of the people really matters to deliver the competitive advantage. In the evolution of various services in leisure industry, the Club already created a difference. The first part of the paper is based on the review and analysis on the presented report from The Club. And the second is consist of formulating various suggestions gained from understanding the situation being faced by The Club and linked it to the current service marketing. At the end, all of the recommendations may add color and competitiveness in the business centers in the idea of the marketing theories and concepts.

Introduction

How to create a successful business?, is one of the most easy question but difficult to answer. Every organization and businesses are allowed to produce their own set of activities that promotes the strategies in making the business successful. It is important that the business leaders understand the various elements that might involve in formulating the success. The most basic elements that can be the source of success are the originality of the offers such as the products and services. It is more appealing to the market if the organization enables to deliver the products and services that are mostly needed. In Leisure Industry, it can be hard to tell on what would be the most important factor that can attract the customers. The customer satisfaction is an effective tool in measuring the appeal of the organization in the market. And this is also the very same reason why the competition intensifies. However, a firm that focuses on enhancing the relationship among the individuals and the use of sports facilities to promote the kind of leisure and enjoyment. Indeed, there is a need in effective marketing and promotions that will allow the organization to gain the advantage against the competitors and create a great impact in the success and effectiveness.  

1.0 Review and SWOT Analysis: In “The Club”

The Club was originally built to set a venue with an aim to enjoy a range of social, cultural, and sporting activities with a promise of safety. The Club has produced a number of sporting facilities that slowly grown popular in Abu Dhabi. The management team is committed to ensure and monitor the operation of The Club towards the continuous success (Kyle, et al., 2006). However, The Club is aware that the organization is facing a real challenge in leisure industry. The center of the problem is to establish a good marketing position and appropriate implementation of future plans with effective strategies. in addition, the obvious negative impact of war in Iraq affected the organization’s performance and the other types of business industries.

1.1 Strengths

The facilities included in The Club that creates a great advantage in accumulating the revenues and promote the competitiveness. The facilities like the gymnasium, tennis courts, and basketball courts. On the other hand, the services involved in The Club arrive from coaching activities in various sports such as tennis. All of the marketing strategies created by The Club are purposely made to support the rapid growth. One of the most desirable offers of The Club is that the organization is described to be the only facility that requires the temporary members even in the non-residents of UAE.

1.2 Weaknesses

Due to the increase number of marketing strategies and opportunities available, The Club has a potential weakness in targeting and delivering the kind of service that the foreign clients have in mind. Because of the open invitation of the organization in various race and type of people, there is a little uncertainty that the organization might not provide the quality of service and customer satisfactions because of their lack of proficiency in acquiring the same service back to the original country home of the visitors. Another implication of weakness in the business is spending too much money in facilitating the entertainment section of The Club. There is a big drop of sales if the performers are not that popular and low ticket prices.   

1.3 Opportunities

The Club looked in the different arrays of opportunities because of the remote location of the organization. The recorded market share and demands not only originates from the host country, United Arab Emirates and its regions. The Club opens its door and invites the foreign visitors coming from India, Pakistan, Sri-Lanka and Philippines. Through the effective marketing and management strategies, the organization has the ability to increase significantly the rate of return of the foreign visitors. The enthusiastic performance of the businesses in the leisure industry is another opportunity and the main evidence is the increase emigration of the foreigners from Africa and United States because of their oil supply.

1.4 Threats

The continuous popularity of the leisure industry across the globe is a great source of threat, not only in The Club but also on the other hospitality and leisure type organizations. The rapid increase in the population of the competitors is an alarming type of situation that enables one organization to generate its own strategy and increase its competitive advantage among the others. Due to the continuous practice, that probably influenced by the globalization and international business activities, the competition intensifies. In addition, the number of competitors in one area might saturate the market. Furthermore, because The Club is located in the center of Abu Dhabi, there is a great threat coming from the traffic and road constructions. The easy access should be on the favor of the organization in order to manage and create a well service impact on their visitors, most especially on their foreign visitors.

2.0 Product Mix

2.1 The Current Marketing Services

The Club offers an array of services that focuses in the recreation of sports and activities. Other than that, the services that The Club is attempting to prioritize are involved in their relaxation package as part of their concept in leisure services. Aside from the sports facilities, the other services that The Club offers involves the salon, library, ballet dancing and dancing, painting and other art workshops (for children to adults, entertainment facilities, outdoor activities and many others. As an addition, The Club also states that the business is the only type of leisure that offers entertainment shows and on-stage acts

2.2 Pricing

Every organization is compelled to offer products and services in a very reasonable price or else, the product or service will not create any impact in the target market. The value of money paid by the customers is promised to exchange with the quality leisure and other benefits. Most of the leisure organizations are using the strategy of membership to create an image to the customers. Through the use of membership, an individual can gain access, enjoy the discount offers, and other promotional offers. On the side of the organization, the use of premium membership resembles a good relationship between the organization and their customers for they are invited to visit anytime of the year. The essence of membership is to cover the over-priced costs that the customers might create and thereby, the benefits can be fully gained. The right to price each of the products and services in leisure industry should be under the adequate policy being ratified by the government. 

2.3 Functions, Facilities and Profitability

The evolution of the structures and other facilities already created development in the entire leisure type of business. The competitors are dealing with the challenge on how to surpass the current situation of leisure industry. The Club is entirely motivated in serving the customers through their creation of sport premises. The building development projects are successfully managed by The Club including the additional facilities like the Junior Members pool and wall-climbing area. In terms of other services, the renovation of the library is prioritized and upgrading of the other existing facilities. 

2.4 Communication and Distribution

In the success of every organization, a good communication should lie within the organization. The Club is utilizing the idea of collaboration that bounds to combine the corporate idea and the suggestions of the customers. This communication process is a solid foundation of The Club to generate bright new ways in increasing their performance in the leisure industry. Such ideas are placed into the advertising and promotional materials such as brochures, posters and flyers, magazines, and Websites. 

During the first year of the business, the marketing elements gained only small percentage in the revenues of the organization. But this weakness is minimized in hiring the people with good communication skills, knowledge, and experience. With the help of the people, the existing marketing strategies were enhanced and the other related issues are comprehensibly answered. As evidence, the organization also invites the large and small sponsorships even if there is a problem in ensuring the benefits because of the budget limit. This is, however, a good indication of the development in the organization and their willingness to take the risks in order to discover something new to the future of the organization. 

2.5 The People

It is believed that all of the hired employees are values most on their respective position not only because of their credentials but also because on their ability to bring extra juices for the organization. The Club is also open in hiring various people from different countries that might trigger for a workplace conflict. In terms of training and development of the people are emphasized by allowing each individual to train in various countries. This is a situation where the organization is attempting to search for other possibilities that might increase the level of the organizations performance in the leisure businesses competition. People are commonly described as the most essential element in an organization, without the important people, the organization will disperse. Therefore, the organizational leaders are paying too much attention in staff retention because of two good views. First, the experience and proficiency of an employee that was forged through his stay in the organization is a good investment in the next or future success of the organization. All the staff that has the potential to create a difference is a good opportunity against the competitors. Second, the professionalism or career opportunities of the employee can also be enhanced. As a result of the retention policy of The Club, the management attracts the quality staffs that can create a quality management team.   

2.6 System and Processes

The current generation invites the technological advancements and resistance to the technological changes might only lead to the organization to be left behind in the competition. Globalization is plainly described as the activity towards competitiveness and improvements. The Club is aware on the utilizing the technological benefits and with regards to the wide range of benefits that it might bring in every organization. The internal function applied the quality technology such as electronic to match with their system and databases. However, there is a significant slowdown on the automated process that was traced in the resistance of the other employee and even the system towards changes. Added to that is the limited staff who can deal and manage with the technological changes. Because of the slow processes that might create other negative impacts on the organization, the people brought back the manual data processing.

In the eyes of the committee, The Club’s operation brought them satisfaction with a continuous indication of an upward trend. But the people should not be feeling contented on the operation and process of The Club because in the next coming years, there are additional challenges that might be start of the downfall of the organization. The marketing strategies applied by the organization as well as the marketing mix are not that well-endowed towards the outcome of competitive advantage. Despite of the present benefits presented by the organization, it is still good that most of the business managers are concerned in strengthening the business in the midst of every challenge.

3.0 Target Market and Review

The Club has a proposed target market in a broad population. To get into details, the review is creating to identify on what type or group of people suited to the facilities and offers of The Club. Considering the fact that The Club is built for the purpose of re-introducing or recreation of the sports, the target market will range basically on the group of people that seeks enjoyment and yet quality experience. From the group of ordinary teenagers, sports enthusiasts, and family even to the parents who has children, The Club is rightfully meant for these types of people. In addition, it is also indicated in the profile of the organization that the business can gain more profit in a group of people that consists of 50 members because of the bulk orders that this group might produce.

3.1 Strategic Positioning

The Club understands that the quality market position in the country is already in the hands of the 5-star International Hotels. This is because of the competitors’ quality service and offers, marketing, promotions, and different strategies that can attract the target markets. However, based on the internal function of The Club, the best attribute that the organization can offer to the clients is their value towards the price of their product and services and the quality of their facilities. The facilities, however, is not enough to support the on-going operation of the organization. Therefore, most of their revenue came from the food and beverages section.

4.0 Suggestion for Development of Service Industry

Tourism was created through the use of the for core concepts which are also reflected as the meaning of tourism in every country. Tourism is the use of leisure time, the act of traveling; a temporary way to stay in a nice place, and take other activities that is new to the customers but is popular to the destination (LT Scotland, 2005). Competitors might be different in their attack because of their tactical and strategic decision making and developing answer against the challenges like in the distribution (OFT, 2005). Various studies is service quality of leisure industry is scarce in the global market and often fails to deliver the customer satisfaction (Woodhouse and Siu, 2005). Besides, formulating and targeting the most appealing service on the customers is not that easy.

4.1 Leisure Model

However, The Club can increase its performance and revenues through the use of marketing models. One popular model that can be applied in the overall operation of the business in the leisure industry is the Leisure Ladder (RPTS TAMU, 2005). The concept of the leisure ladders is from the factors that identifies the stages in visitor’s desire. This is an effective strategy for The Club to eliminate the weakness in terms of targeting the customer satisfaction. Leisure Ladder is viewed as similar to the Maslow’s hierarchy of needs that promoted motivation, but the insights delivers the specific tourist behaviors which revolves in explaining the individual or consumer’s behavior towards experiencing the services being offered by the leisure business.

If the organization targeted the steps towards the customer satisfaction of the visitors, then it can serve as a good foundation to start a relationship between the organization and the customers. The recreation of the face of the leisure is based on the consumer’s behavior which summarized in the Leisure Ladder Model. Together with the innovation and knowledge, the people of The Club can craft other services that can potentially improve the business line. Through the identification of what level does a visitor wants, the responsiveness, reliability, and accessibility must be established (Woodhouse and Siu, 2005).

Leisure Ladder Model

Steps

Characteristics

Fulfillment

feeling peaceful and totally involved in recreation activities

Self-esteem and Development

developing skills, knowledge, abilities, and other competencies

Relationship

building relationships through participation and enjoyment

Stimulation

optimal enjoyment, feeling safe but not bored

Relaxation and Bodily Needs

basic needs for relaxation and escape from stress

 4.2 Service Marketing Theory

Based on the marketing theory, there are two characteristics of services which come in the process and the consumption of the consumers created a great impact in the service marketing models (Grönroos, 2006). The service concept can be the frontline of The Club and therefore, the business should fulfill their duties in providing the consumer goods and leisure services appropriate to both domestic and overseas consumer. Leisure industry is characterized with the various changes due to the influence of the global markets and rapid change in terms of technology and innovation. The Club must focus in strengthening the services, tourism and hospitality management, and sport and recreation facilities as the source of their advantage. The consumer’s demand is typically manifested in the buying decisions or satisfaction (Paul, 2006). Once The Club managed to keep the customer loyalty, the consumer demand coming from their existing customers can greatly affect the increase in their revenue. It might be the most basic suggestion, but business flexibility and innovation is already expected and the remaining key towards the survival and growth of the business lies in the hands of their customers.

The Club’s strategic position can receive improvements if they managed to identify the key information towards the marketing. For example, the continuous development in promotion and competition, new offers and sporting facilities that will fit for the season, managing the amount of international tourists, and the accessibility in generating markets via infrastructure or information (Meyer, 2003).  In the internal operations, the operators or the staff should receive realistic training that invites positive result. Providing the quality of training abroad because can greatly influence the bandwagon for changes and development. It can add to the competency and stimulate additional strategies towards the success. In addition, training and development should be in nature aligned to the business environment in service industries. The focus in strengthening the key people and maintaining their action in staff retention is a good indication that the leaders trust the employees’ productivity (Paul, 2006).

In the area of revenue generation or the maximization of profit the firm should be price-sensitive and keeping the costs as low as possible. The consumers usually turn to a business firm wherein they can receive benefits from their expense. Creating a sound and sensible pricing strategy type is typical falls down in the idea of discounting. The marketing strategies that The Club should emphasize are the use of the image creation and product distribution. Through imagery, the offers can be viewed by the consumers. The use of brochures and other advertising materials (e.g. commercials and posters) can bring the firm’s message directly to the people. However, the expense that might incur is difficult to assess. Therefore, the use of Internet and Website should be implemented as part of their promotion (Meyer, 2003).

Conclusion

In the international leisure industry, many studies indicated that there is an increasing interest coming from the people who are willing to spend on leisure. The increase in leisure trends is a great opportunity for both businesses and consumers. Therefore, The Club should provide a strong advertising program that invites the target market. As part of the weakness, it is natural for The Club to experience slows in terms of revenues because of the economic conditions and uncertainties in various countries. The inflation that might reflect in all the segments might also affect the customer satisfaction and quality of services. Through the awareness of the organization regarding the service industry issues, the weaknesses can be minimized until fully eliminated. The use of the Internet to market the potential customers is a good step for the organization to promote the kind of service that the organization provides.  The ability of the leisure business leaders to manipulate the operation is based on how well the marketing strategies and satisfy the long-term goal of the business. The Club can definitely establish a good marketing strategy by promoting the best attributes and detailing the benefits that the customers might experience. The hard part is promoting on the potential consumers and the consumers who previously engaged in the same offer from the competitors. The Club therefore, should negotiation with the consumers together with their best featured offers. The marketing strategy will then be intensified and with that, another round of innovative marketing is needed.  

References:

Grönroos, C., 2006. Adopting a Service Logic for Marketing, Marketing Theory, Vol. 6, p. 317, [Online] Available at: http://www.ifm.eng.cam.ac.uk/ssme/references/Gronroos_ref_cambridgessme07.pdf [Accessed 28 May 2010]

Kyle, G.T., Mowen, A.J., Absher, J.D., & Havitz, M.E., 2006. Commitment to Public Leisure Service Providers: A Conceptual and Psychometric Analysis, Journal of Leisure Research, Vol. 38, No. 1, 2006.

LT Scotland, 2005. Travel and Tourism Introduction, Learning Teaching Scotland, [Online] Available at: http://www.ltscotland.org.uk/NQ/images/TravelTourismIntroint2V2_tcm4-221265.pdf [Accessed 28 May 2010].

Meyer, D., 2003. The UK Outbound Tour Operating Industry and Implications for Pro-Poor Tourism, PPT Working Paper No. 17, [Online] Available at: http://www.propoortourism.org.uk/17_industry.pdf [Accessed 28 May 2010].

OFT, 2005. Anticipated Acquisition by 3i Group Plc of Shearings Group Holdings Ltd, Office of Fair Trading, [Online] Available at: http://www.oft.gov.uk/shared_oft/mergers_ea02/shearings.pdf [Accessed 28 May 2010].

Paul, L., 2006. Industry Strengths: Industry Skills Report Service Industries, Australian Government Department of Education, Science and Training [Online] Available at: http://www.voced.edu.au/docs/dest/TD_TNC_87_252.pdf [Accessed 28 May 2010].

RPTS TAMU, 2005. Consumer Behavior: Leisure Ladder Model, Recreation, Park and Tourism Sciences [Online] Available at; http://www.rpts.tamu.edu/grads/XLI/RPTS202/Chapter%202.pdf [Accessed 28 May 2010].

Woodhouse, E., & Siu, N.Y., 2005. A Study of Service Quality in Leisure Clubs [Online] Available at: http://net2.hkbu.edu.hk/~brc/Wp200501.pdf [Accessed 28 May 2010].

 

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