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Lecture 6

ADM 3313 Lecture Notes - Lecture 6: Human Resources, Rafting, Adventure Travel


Department
Administration
Course Code
ADM 3313
Professor
Stephen Daze
Lecture
6

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Lecture 6
Marketing Considerations for Entrepreneurs
MARKETING STRATEGY
!Purpose
o!Helps to focus energies
o!Forces objective analysis
o!Identifies prospects and determines how to turn them into
clients
o! Ensures a balanced approach
Components of a Marketing Strategy in the Business Plan
! Market Strategy
o!Situation Analysis
!!Trends + Target market + Competition = Positioning
o!Marketing Mix
o!Budget
Process and Linkages in the Start-up
!Trends + Target market + Competition =
!Positioning
!Demand Creation (marketing)
!Sales Funnel Management (sales)
Trends
!Determine the state of the industry
!Determine if demand is growing, shrinking, or staying the same
!Consider economic indicators
!Product life cycle (where is product in the cycle?)
Product life cycle
!Introduction
!Growth
!Maturity
!Decline
Go to market strategy – Market Maturity

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Characteristics of PLCs
!Introduction
o!Sales low
o! Production costs high on a per unit basis
o!Few competitors
o! Selling to “early adopters”
o! Advertising strategy: awareness and education
!Growth
o!Sales increasing
o! Costs declining on a per unit basis
o!Competition increasing
o! Margins decreasing
o! Advertising strategy: product differentiation and competitive
advantage
!Maturity
o!Sales grow but at a slower rate and peak at some point
o! For most products maturity is the longest phase
o!Profits peak and start to decline as sales drop due to
competition
o! Competition is intense: mergers/acquisitions
o! Advertising strategy: brand loyalty
!Decline
o!Sales decline
o! Margins low: price decreasing to entice laggards
o! competition based on price
o! Because of small profit, many competitors leave, remaining
are entrenched and have significant market share

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o! Advertising strategy: lowest price, new uses, new markets?
Example: Adventure Travel Business
!Industry Analysis
o!According to the Department of Commerce, the U.S. travel
and tourism industry is the nation's third largest retail
industry and will be number one by the year 2000. Revenues
from travel have increased approximately 100% in the last
decade with U.S. travel agencies producing over $100 billion
in revenues each year. Adventure travel, a segment of the
travel and tourism industry, is growing at least 10% per year.
More than 50% of the U.S. adult traveling population, or 147
million people, have taken an adventure trip in their lifetime,
98 million in the past five years. Thirty-one million adults
have engaged in hard adventure activities like whitewater
rafting, scuba diving, and mountain biking. An additional 25
million engaged in both a hard- and soft-adventure activity.
Activities most commonly participated in during adventure
vacations: camping (85%), hiking (74%), skiing (51%),
snorkeling or scuba diving (30%), sailing (26%), kayaking or
whitewater rafting (24%), and biking trips (24%).
!
!Market Trends
o!One notable trend in the travel industry is increased
deregulation. Deregulation has increased competition and the
need for differentiation. In many cases, the prices of airfare
and other travel-related services has dropped. Additional
trends include caps on agency commissions by many of the
larger airlines, increases in adventure travel, and reduction of
profit margins. More than 50% of the U.S. adult traveling
population, or 147 million people, have taken an adventure
trip in their lifetime, 98 million in the past five years.
Approximately 31 million adults have engaged in hard
adventure activities like whitewater rafting, scuba diving and
mountain biking. An additional 25 million engaged in both a
hard and soft adventure activity. The growth trend in
adventure travel is predicted to continue.
o!Reasons for this growth include a healthy domestic economy
and devaluation of currency in other regions which has made
travel less expensive for U.S. residents. Leisure travel
increased by 3.2% in 1997 and 2.0% in 1998. The healthy
economy has increased business which in turn boosted
domestic business travel 4.8% in 1997 and 3.6% in 1998.
Adventure travel, growing 10% annually, is one of the fastest
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