N

MBA VB8

1. Executive summary
Watercrest Park is an outdoor water related recreational facility investment project. It includes a
wave pool, water slides, swimming pools, jogging trails, and several water rides. In additional, the
plan included dressing rooms, a snack bar, a souvenir shop, a large space for sunbathing, and space
for special events such as outdoor concerts.
The main target customer of Watercrest Park is youth and single adults. However, the park will also
spend marketing efforts on family segment by promoting the park as a safe and fun outdoor activity
for families. Other partnership program and personal selling will focus on groups (church, school,
c lle e,
iversit ) and tourist segment, because in long-term, those segment can provide a
significant number of sales for Watercrest Park.
The project required $4 million of investment. At 15% return on investment and normal condition, it
is expected that the project will get to the break-even point in 6 years.

2. Target customers
Potential market segments for Watercrest:
Type of party
Area
residents
Tourists

Size of party
Individuals/couples
Families
Youths ages 8-18, single
Young/no children,
adults ages 19 and over, older/young children,
young couples
older/older children
Single adults, young
couples

Young/no children,
older/young children,
older/older children

Groups
Church,
college groups
Church, school
groups

Two major characteristics of the market segments influenced planned marketing activities. One was
the size of the parties involved. Research from this project confirms that the primary markets for this
project are youths and single adults. Also, many consumers indicate they would probably go with a
group to this type of attraction. Although the plan will not ignore families, the size of the family
segment, compared to the other two, warrants less marketing effort.
Another market-segment variable that the pl m st c sider is reside t vers s t rist. A i , t e
plan will not ignore the tourist segment but primary emphasis will focus on the resident segment
because of the size and accessibility of this group.
Research reveals that the major motives for going to this type of park are:

Fun: a key word used by many consumers.

Peers: people like to be with others of their own age.
Physical attraction of combination of sun and water: people like to be near water in hot
weather.
Boredom: people want other activities than staying home, watching television, and so on.

There also appears to be a high degree of consumer acceptance of water-related activities such as
water slides. Most youths have been to a water slide and most adults with children are aware and
approve of water slides. This translates to a favorable consumer mind-set for Watercrest.
Size of the market by Age:
Age group
6-17
18-34
35-64

Total number
70,758
150,134
92,700

The demographics of the market are favorable in terms of the major segments of Watercrest
customers. Population projections show a near doubling of the area population in the next twenty
years.
Household Income and comparative local state-nation percentage:
Income ($)
Up to 15,000
15,001 - 25,000
25,001 - 35,000
35,001 - 45,000
45,001 and over

Proposed location (%)

26.4
7.3
17.5
26.9
21.9

States (%)
27.3
6.9
17.6
28.7
19.5

US (%)
25.4
6.6
18.0
30.8
19.2

Income statistics for the proposed location also reveal a very strong market. Income in the area is
not much different from the state. Overall, the area provides a stable economic base with future
population growth and income levels that support additional recreational facilities.

3. Unique selling proposition (USP)

Indoor Recreational Daytime Competitors
Types
Number
Average Price
Theaters
23
$4.50/ 12 years and over
Skating rinks
4
$1.50/ person
Bowling alleys
5
$1.70/ person
Racquetball courts (public)
2
$5.50/ person
Arcades
10
$0.25/ games
Pistol ranges
3
$2.00/ person
Outdoor Recreational Daytime Competitors
Types
Number
Average Price
Water slides
2
$2.00/ 1/2 hour
$3.50/ 1 hour
$6.00/ all day
Race cars
1
$1.25/ lap
Usually $10/ person
Skateboard parks
1
$2.50/ 3 hours
Swimming pools (public)
6
$1.60/ person

Miniature golf
Tennis courts (public)
Amusement parks

3
6
2

$2.00/ person
$2.00/ person
3-4 tickets per ride ($1.00)

SWOT Analysis:
Strengths:
Theme park can keep guest for several hours and
offer many alternative ways to spend money. It was
to include a wave pool, water slides, swimming pools,
jogging trails, and several water rides. In addition, the
plan included dressing rooms, a snack bar, a souvenir
shop, a large space for sunbathing, and space for
special events such as outdoor concerts
Monopoly in the market, as it is the only outdoor
water related theme park in the area
At current prices for water slides in the area,
Watercrest should draw most consumers because of
the cumulative attraction of other Watercrest
activities and the positive Watercrest value
Each alternate recreational facility is a competitor for
Watercrest; but given the nature of the project, there
is no major daytime or nighttime competitor to
Watercrest monopoly in the market
Sun Belt climate favor outdoor recreation activities
(especially water related activities)
High degree of consumer acceptance of waterrelated activities such as water slides. This translates
to a favorable consumer mind-set for Watercrest
High volume of sales could be expected during the
first 2-3 years
Opportunities:
American has a growing preoccupation with outdoor
recreation. Based on past trends, a doubling of
recreational expenditures can be expected in the
next 8-10 years
More and more people are moving to the Sun Belt,
the South and Southwest are expected to be major
growth areas
Leisure spending is expected to reach $250 billion by
next year and $350 billion in five years
Admissions revenues for sporting events grew from
$3.6 billion to $15 billion over the past five years
The most popular sport in the US is swimming some
103 million people regular swim. Water related
activities account for 5 of the top 25 outdoor
recreation activities
Population projections show a near doubling of the
area population in the next 20 years
Income statistics for the proposed location also

Weaknesses:
A major cost problem for theme
park is the attempt to add a newer,
more thrilling ride every 2 years at
continuing inflated costs
Target market is only 112,000
people, total population is only
313,600 people a relatively small
market
According to research, majority of
adults and youths view water slide
as being for young people, not for
family or older adults
After 2-3 years, the novelty of the
park made it less attractive to
customers
High capital investment ($4 million)

Threats:
After 2-3 year of operation, many
theme parks are currently in trouble
financially because of saturations,
competition, and inflation
The majority of adults with children
indicated a preference for staying
and watching their children
participate in an activity if the
facility offered a comfortable place.
Adults also seemed extremely
concerned with safety for their
children in this type of activity.
Eighty-five percent of the
respondents identified safety as
their major concern

reveals a very strong market

4. Pricing & Positioning strategy

In the research, respondents were asked how much they would spend per person to participate in
an outdoor recreational activity if they could stay for eight to ten hours as a family. The median
response was $8.00 per person. When asked how much they would be willing to spend for one of
their children to participate, the average response was $10.50. Y t s ver e resp se w s $10.00
when asked the same question.
The current price for an all-day pass at a water slide in the area is $6.00. Youths reported spending
an average of $26.00 per month for recreational activities during the summer.
Pricing and Positioning strategy:

It is a monopoly model (there is no direct competitor and indirect competitors are weak
compare to the cumulative attraction of Watercrest activities). Therefore, the goal of Watercrest
is to set a price at maximum profitability
According to research, a price of $10-12 or more for the Watercrest complex in entirely in line
with what adults and youth would expect to pay. In order to maximize the profit, the basic price
is set at $12. From September to December (when the weather is not as hot as summer), the
basic price will be adjusted to $11, to encourage more sales during low-season
There will be various offers to encourage more sales (these offers will be explain in later
sections)
Positioning in the market is high price high quality (high quality is the cumulative values
coming from various Watercrest activities)
W tercrest p rk c mpetitive dv t e is Differe ti ti

Broad

Cost

Differentiation

Cost Leadership

Differentiation

Cost focus

Differentiation
Focus

Competitive
Scope
Narrow

5. Distribution Plan
Direct distribution plan:

Ticket booth in front of the park

Online booking (ticket to be picked up at the ticket booth)

Indirect distribution plan:

Cooperate with travel agencies to target tourist

Target school, college, universit , b / irl sc t, c
(large quantity package)

rc to offer promotional package

6. Your offers

According to research, youth and single adults are primary target audience. Also, many
consumers indicate they would probably go with a group. Therefore, it is best that Watercrest
Park could offer a group package. For example: buy 6 tickets at the price of 5 tickets, this offer
target at our primary customers (save 17%)
Majority of adults and youths view water slide as being for young people, not for family or older
adults. In order to increase sales from family segment, there will be a suitable family package
offer. For example: 2 adults and 2 kids tickets for the price of $40 (save 17% compare to normal
price of $48)
Large quantity offers (whole sales) and tourist offers will be distributed based on partnership
programs (these offers will be explained in more detail in section 11)

7. Marketing Materials
Marketing materials are used to promote business to current and prospective customers, including:

TV commercials
Newspaper advertisement designs
Print brochure/ catalogs
Billboard designs
Website, Facebook fanpage, and other digital materials (such as online banners)
Business cards and other marketing materials for personal sales

8. Promotion Strategy
Market Segment

Communication messages

Television
Newspaper
Brochure/
Channels catalogue
Event marketing
(e.g. road show)

Communication message and channels

Youths, single
Families
Groups
adults, young
(school,
couples
college,
university,
boy/girl scout,
church)
Come to
Watercrest
Watercrest
Watercrest
park offers a
Park offer best
Park to have
safe and fun
deals for large
fun with your
place for your
group (school,
friends
children
college,
c rc ) w e
they are
looking for fun
activities
x
x
x
x
x

Tourist

Watercrest
Park is the
best outdoor
attraction in
town for
tourist

Billboards
Personal Selling
Online
Marketing

x
x

Note:

Personal selling will focus on the presidents of the school, college, university, leaders of boy/ girl
scout, c rc as well as managers of travel agencies. There will be discounted/ whole sales
package for sc
l, c lle e,
iversit , b / irl sc t, c rc Travel agencies also receive
discount for every tourist tickets.
Local TV will be used to target the Youths, single adults, young couples segment. It is the most
expensive channel, so Watercrest Park will use it only for the primary customer segments
Local newspaper will be used (young magazines to target young customer, and family magazines
to target family segment)
It is important to deliver the message of Watercrest Park as a safe and fun place to family
segments (as safety is the most concern of this target segment). Gradually change adults point of
view about Watercrest Park as a suitable outdoor activity for the whole family

9. Online Marketing strategy

Keyword Strategy: water park, theme park, amusement park, swimming pool, water park deals,
water park offer, water park discount, water slides, outdoor recreational activities, indoor
recreational activities... Focus on related keywords and theme of Watercrest Park
Search Engine Optimization Strategy: Optimize titles, contents, HTML codes, sitemap... of
website, following the keyword strategy
Paid Online Advertising Strategy:
o Online Banner from Google Adwords and other website
o Search Engine Marketing: gaining traffic and visibility from search engines through paid
efforts
Social Media Strategy:
o Create and manage Facebook fanpage for Watercrest Park. Provide information for fans
on Facebook fanpage, this fanpage will also be used as a channel for customer service
o Attract local target audience to Facebook fanpage

10. Conversion Strategy

Showing testimonials of past clients who were satisfied with Watercrest Park
Create suitable offers for different groups s c s sc
ls, c lle es, iversities, c rc es
Follow-up with decision makers (such as school presidents, leaders of churches, managers of
tr vel e cies)

11. Joint ventures & Partnerships

Partnerships with travel agencies, provide incentive for those agencies when they take tourists
to Watercrest Park
Partnerships with other tour providers to include Watercrest park in their attraction tours

Partnerships with church union, and other groups to provide whole sales offers
Partnerships with event organizer to provide concerts at Watercrest Park during nighttime.

12. Referral Strategy

It is very complicate to implement a referral programs to individual customers. However, this
strategy can be applied for whole sales customers. For example, when a travel agency refers to
another agency, they will get some bonus. The same bonus applied when schools, colleges, or
university refer to each other.

13. Strategy for Increasing Transaction Prices

It is important that Watercrest Park to provide a snack bar, a souvenir shop to increase customer
spending during their time at the park.
Bundle service such as ticket + lunch for $15 will boost the sales of the snack bar. Tourist can also
buy bundle service such as ticket + souvenir for a discounted price.

14. Retention Strategy

Personal sales will apply retention strategies for group customer. Keep close relationship with
decisi m kers i t se sc
ls, c lle es, iversities, c rc es
Keep long-term partnership/ loyalty programs with tour and travel agencies. Provide better
discount, offers for those with high sales volume (tour agencies that introduce a lot of tourist to
Watercrest Park).

15. Financial Projections

year 1

year 2

year 3

year 4

year 5

year 6

year 7

year 8

year 9

year 10

112,000
70%

115,920
85%

119,977
95%

124,176
85%

128,523
80%

133,021
80%

137,677
80%

142,495
80%

147,483
80%

152,645
80%

78,400

98,532

113,978

105,550

102,818

106,417

110,141

113,996

117,986

122,116

103,087
5%

106,695
6%

110,429
7%

114,294
8%

118,295
9%

122,435
10%

126,720
10%

131,155
10%

135,746
10%

140,497
10%

5,154

6,402

7,730

9,144

10,647

12,244

12,672

13,116

13,575

14,050

Regional market
Penetration

90,000
15%

93,150
16%

96,410
17%

99,785
18%

103,277
19%

106,892
20%

110,633
20%

114,505
20%

118,513
20%

122,661
20%

Attendance

13,500

14,904

16,390

17,961

19,623

21,378

22,127

22,901

23,703

24,532

225,000
5%

232,875
6%

241,026
7%

249,462
8%

258,193
9%

267,229
10%

276,582
10%

286,263
10%

296,282
10%

306,652
10%

Attendance
Group sales market

11,250

13,973

16,872

19,957

23,237

26,723

27,658

28,626

29,628

30,665

Attendance

20,350

24,420

29,304

26,374

27,297

28,252

29,241

30,264

31,324

32,420

Repeat business attendance

78,400

98,532

113,978

105,550

102,818

106,417

110,141

113,996

117,986

122,116

207,054

256,762

298,252

284,535

286,439

301,430

311,980

322,900

334,201

345,898

Target market (age 10-25)

Penetration
Attendance
Local market - general
population
Penetration
Attendance

Tourist market
Penetration

Total attendance

Sales

2,070,544

2,567,622

2,982,523

2,845,352

2,864,393

3,014,302

3,119,803

3,228,996

3,342,011

3,458,981

Cash inflow
Present Value Factor (at 15% ROI)

828,217
0.8696

1,027,049
0.7561

1,193,009
0.6575

1,138,141
0.5718

1,145,757
0.4972

1,205,721
0.4323

1,247,921
0.3759

1,291,598
0.3269

1,336,804
0.2843

1,383,593
0.2472

Present Value

720,189

776,596

784,423

650,736

569,644

521,266

469,140

422,226

380,003

342,003

Total Net Present Value - NPV

720,189

1,496,785

2,281,208

2,931,944

3,501,588

4,022,854 4,491,994
Break-even point

4,914,220

5,294,223

5,636,226

Assumption:

Market population growth at 3.5% per year (including target market, general population, regional market, tourist market, the population will double in
20 years)
Target market penetration increase from 70% in year 1 to 95% in year 3, and then gradually reduce to 80% in year 5 (the novelty of the park made it
less attractive to customers). With marketing efforts, Watercrest Park will remain 80% market penetration for the rest of the project length
Local market penetration will increase from 5% in year 1 to 10% in year 6 and remain in this number because of marketing programs that target family
segment. Watercrest Park will be promoted as a safe and fun place for family activities
Regional market will increase from 15% in year 1 to 20% in year 6
Tourist market will experience significant growth due to partnership programs with tours and travel agencies
Group sales also increase by 20% in year 2 and year 3, then reduce a bit in year 4. After that Group sales will expand along with population growth
Average customer value is $10 (including ticket + other additional service (snack bar, souvenir shop, c certs)
Cash inflow is 40% of the sales (it is the normal cash inflow rate from theme parks)
15% Return on investment (ROI) to be used to calculate Present Value Factor)
The break-even point for the project is 6 years