Case Study: EXTREME ACTIVITY HOLIDAYS Assignment: Strategic Marketing Date: 27 th June 2003 TABLE OF CONTENTS 1. 0 WYTEE’S BUSINESS PHILOSOPHY 2. 0 WYTEE’S PRODUCTS AND CUSTOMERS 3. 0 ANALYSIS ON WYTEE’S (UK) OPERATIONS 4. 0 WYTEE’S DISTRIBUTION channel management 5. 0 WYTEE’S FUTURE DIRECTION 6.
0 REFERENCES 1. 0 WYTEE’S BUSINESS PHILOSHOPY As a provider for safe adventure holidays, Tony Whitehurst, an extreme activity enthusiast himself, developed a small retail outlet that specializes in extreme sports activities, mostly diving, hiking and mountaineering mainly catering for the adventurous tourists and interested locals in pursuance of the adrenalin hit in New Zealand. Tony was a fierce believer of individual self-determination and freedom. His business philosophy was mainly focused on the experience one can get by pursuing on the extreme activities organized in order to fulfill one’s passion for extreme activities.
He believes that the extreme sports activist should enjoy or experience the thrill and adrenalin rush associated with the extreme acts performed. With disregards to the commercialization, Tony stands firm on his ideology of not having to expand its business unit as he was concerned that the commercial interest would spoil the beauty of the local area and his passion for extreme sports activities. Wytee’s was mainly administrated by Tony and both his close friends though the business and the demand for extreme sports activities had increased tremendously due to the growth in transcontinental travel and the popularity of New Zealand as a popular tourist destination. Wytee’s business philosophy of focusing on the experience gain through the participation in the extreme activity itself changed when both his sons took over the business after he passed away on a freak mountaineering accident. Peter & Saul, both interested in the extreme sports themselves, took over the business into the next level by expanding beyond their home land in New Zealand to other parts of the world.
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With their educational background in law, they restructure Wytee’s administration structure into a more professional outlook modern management style by emphasizing on legal agreements rather than the earlier gentlemen agreement as pursued by their late father. The experts hired to accompany the interested clients in the extreme sports activities were also made responsible to generate trade by providing additional revenue through the commission system which proved to be an effective measure of expanding Wytee’s business growth. These efficient measures adopted by both the brothers were more in line with what the tourists expected in their service dealings in their home country. Heavy promotions were made unlike the earlier days where Wytee’s were only known through the word of mouth concept, had increased their clients based into a wider spectrum. Both the brothers also realized that the extreme holidays were also growing across the United States and the United Kingdom. Wytee’s had their first four franchisees set up in the following locations; France (specialty – canyoning), northern France (specialty – parakarting), Papua New Guinea (specialty – bungy jumping) and Nepal (specialty – mountaineering).
Six further franchises were established including Ethiopia, Chile, Iceland and Sweden. Wytee’s UK was established in August 1999, to counter balance the increasing power of franchises. Wytee’s UK was to be the the pioneer within the growing market for the extreme sports by creating an environment of an ultimate extreme sports activity centre focused at seasoned extreme sports enthusiasts who wanted to participate in the sports activities for a longer period of time. From the above description on the evolution of Wytee’s, the business philosophy during the father and sons management style was somehow shifting from the gaining of individual experience through the activities itself into the brand by identifying innovators management of promoting the extreme sports activities to a higher level through the franchising system by living on the Wytee’s mystical brand identity. 2. 0 WYTEE’S PRODUCTS AND CUSTOMERS A product is anything that can be offered to a market to satisfy a want or need.
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Broken bones, head trauma, shark attacks, and casualties all while playing the sport you love. Is it worth it? With extreme sports come extreme risks. There are many controversies over these sports as to whether they are ethical or not and why anybody with the right mindset would consider participating in such events. These sports often involve high speed, great heights, a high level of physical ...
Products that are marketed include physical goods, services, experiences, events, persons, places, properties, organizations, information and ideas. A product can be classified under three levels such as the core product, tangible product and the augmented product. Since Wytee’s had being providing extreme sports activities such as hiking, mountaineering, and diving during the earlier days of its business operations, their product can be categorized as providing benefits to the customers. The benefits derived by the customers would be the ” adrenalin hit experience ” gained during the purchase of the extreme sports activities package. It was merely in the product core – level. When the sons took over the Wytee’s, the product range had expanded into canyoning, mountain biking, street luge, parakarting, bungy jumping, and even the flexibility to purchase the technical equipments, training related to the extreme sports and even fashionable leisure wear through the expansion of Wytee’s franchisees into other countries.
From the above expansion, the product core – level of Wytee’s had expanded into the tangible and augmented products where it exceeds customers expectations during the management of both Peter and Saul (sons of the deceased Tony).
Wytee’s customers are basically focused on extreme sports activists themselves seeking for the thrill or adrenalin rush provided by them. These customers can be categorized as the market research exercise conducted at the Wytee’s UK portfolio. Most of Wytee’s active customers are within the age group of between 20 – 24 years of age which was about 47 % of the total of customers which visited the UK franchise.
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About 40 % of the customers are between the age of 25 to 39 years of age. At about 50 % of the customers whom visited the UK franchise are intermediate in terms of their extreme sports activity experience. Another 40 % of the customers were at their novice level and only about 10 % whom visited are truly the experts. Two of the most popular extreme sports participated will be the canyoning and the mountain biking offered in the centre which contributes about 60 % of the visitors.
Bungy jumpy, the second popular extreme sport activity are participated about 40 % of the total visitors that visited the centre. About 50% of the customers are singles, living with their partner whereas another 24 % were married and 20 % were singles living alone. Only about 6 % of the customers are singles living with their parents. In terms of distance from the UK centre, about 65% of them stays within the range of between 51 to 100 miles from the centre. About 20 % stays between 10 to 50 miles, 5 % stays less than 10 miles and another 5 % stays over 101 miles away from the centre. From the elaboration above, Wytee’s customers can be categorized as a specialized segment of extreme sports enthusiasts.
3. 0 ANALYSIS ON WYTEE’S (UK) OPERATIONS In order to determine the problems faced by Wytee’s UK, the essential SWOT analysis and the 4 Ps of marketing will be conducted to analyze the failure of Wytee’s UK. SWOT analysis mainly consists of determining the strengths, weaknesses, opportunities and threats of an organization in order to capture a better view of the current situation and to implement effective strategies to overcome the problems faced. WYTEE’S STRENGTHS Wytee’s had been in the extreme sports activities market for quite a number of years and had built a reputation by providing a safe and high technical skilled extreme sports activities. It had a mystical reputation among the extreme enthusiasts. WYTEE”S WEAKNESSES Wytee’s UK direction of providing extreme sports activities centre towards the seasoned extreme sports enthusiasts so that they could live their sports in a much longer time in the short break holiday market, did not go as planned.
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This is mainly due to the lack of market knowledge and the wrong focus on the market segment. WYTEE’S OPPORTUNITIES With the growing awareness and participation of extreme sports through the media coverage, Wytee’s extreme sports centre has a huge potential to grow further with the right marketing strategies and plans. WYTEE’S THREATS Though the only threat right now in Wytee’s UK is the direction of the company on providing short holiday breaks to extreme sports enthusiasts from the initial objective of providing a centre to fulfill the adrenalin rush. The franchisees are beginning to fear that the direction of Wytee’s UK are draining the entire organizations resources as they have invested heavily in support of brand development. 4 P’s OF WYTEE’S UK The 4 P’s of marketing mainly consists of Product, Pricing, Place and Promotion.
The idea of determining the 4 P’s are essential to determine the problems faced by Wytee’s UK. WYTEE’S PRODUCT Wytee’s products are basically a service oriented product in terms of benefits derived from the purchase or participation by the customers. Its main products are extreme sports activities ranging from hiking, diving, mountaineering, canyoning, street luge, parakarting, bungy jumping and mountain biking. Wytee’s also sells technical equipments and retail sports goods. WYTEE’S PRICE Wytee’s adopts a price skimming approach which emphasizes the brand heritage and the quality of the facilities. WYTEE’S PLACE The UK centre is a 200 acres of land in Wales which comprises of hills, valleys and flat plains.
It also has a special track for street luge enthusiasts and a large farm with outbuildings that were converted into a basic living accommodation with 40 double rooms. WYTEE’S PROMOTION Wytee’s promotional activities are usually based on their participation in the extreme sport trade press and the Wytee’s official web site. From both the SWOT analysis and the 4 P’s determined, it is quite evident that Wytee’s UK did not manage to capture its targeted audience age group of between 15 to 19 years of age whom the brothers believed to be the innovators especially in the street luge extreme activity. Many of the customers that utilizes the facilities are driven by the curiosity about Wytee’s and wanting to experience it in the UK centre. Wytee’s had been experienced in providing specialized extreme sports activities and the transition into providing a holiday centre (Wytee’s UK) for such extreme sports enthusiasts may prove to be their breakdown of Wytee’s direction. The brothers may not have the essential experience or competency in managing the new direction of Wytee’s UK.
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The distinct differences between the UK and the rest of the franchises somehow or rather had created a conflict among the brothers and the franchisees themselves as the UK franchise is draining their overall revenue by failing to meet the initial business operations of providing a holiday centre among the extreme sports enthusiasts. 4. 0 WYTEE’S DISTRIBUTION CHANNEL MANAGEMENT From the understanding of the case study, Wytee’s distribution channels are the franchisees that had been set up by the brothers in several regional locations in central France, northern France, Papua New Guinea, Nepal, Ethiopia, , Chile, Iceland, Sweden and the latest in United Kingdom. All of these distribution channels are specialized in various extreme sports activities. The franchise agreement was relatively simple where the interested parties must first apply to Wytee’s and they are to be required to complete a training course on the essential skills needed to manage extreme sports activities. Besides the training and the investment allocated into each franchise, the franchisees must however minimize suggestions to the customers and remain centralized and focused to the Wytee’s business philosophy.
The franchisees were also required to follow and emulate the operating systems of the New Zealand branch where it is called the Wytee’s mother ship. The estimated costs to set up a franchise would require the interested parties to invest in an amount of not lower than $ 230, 000 dependent upon the building and shopfitting costs in the franchisee’s country. Though in the later part of the case, it was revealed that the franchisees seemed to have conflicting views on the direction of Wytee’s on brand management where a huge amount of money had been invested to support the brand and image of the organization. This had brought about an increasingly concerned about the consequences on their trade from Wytee’s (UK) venture. The obvious reason based on the above statements lies on the distribution channel management by the brothers on Wytee’s organization.
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It was apparent that Wytee’s are having difficulty managing the franchisees due to lack of trust and the over emphasis on reinvigorating the pioneer spirit within the brand. In order to manage the distribution channels more effectively, the brothers should allow the franchisees to manage their own operations in their designated location without losing the identity of Wytee’s as an extreme sports activities provider to the interested customers and still being able to generate revenue to Wytee’s. By over controlling on the distributors or franchisees in this context will not only create conflict but may also hurt the overall revenue generations required to maintain the business operations effectively and efficiently. The brothers must first understand that the franchisees must have their own degree of freedom to determine their specialize focus on their extreme sports activities and not bother them with the main corporate direction of maintaining the pioneer status which failed in the Wytee’s UK venture. To manage the franchisees effectively, the brothers must follow the recommended steps in order to manage the problems faced. Firstly, there must be clear and agreed goals between Wytee’s and the franchisees on the survival of the business operations in terms of either focusing on the brand or remained customer focused.
This will allow both parties to come to an agreement on what action plans are needed to balance the situation. Secondly, the franchisees should be allowed the autonomy in managing their regional area without losing grip on the Wytee’s identity as an extreme sports provider. This will allow the franchisees to focus on the customers needs and hence allow the profitability of the business to be effectively manage. Thirdly, the franchisees should be allowed as a minority share holder by providing them certain stake in Wytee’s. This steps will allow active participation towards the future direction of the business. Lastly, distribution channels are important to Wytee’s business survival because of the nature of the services provided to the customers of extreme sports lovers.
They are also important because of the role they play by being the intermediates between the customers and Wytee’s. 5. 0 WYTEE’S FUTURE DIRECTION With its mystical status of an extreme sports activity provider in New Zealand pioneered by the late Tony W hite hurst, Wytee’s business had expanded widely throughout other regional areas, cleverly managed by both his sons by allowing franchising to be their distribution channels in providing other businesses such as specialized extreme sports activities to retail of sports goods which are strongly associated with the sports had proved fruitful to the business operations. However, the launching of the Wytee’s UK branch did not follow the success as foreseen by the brothers. This was mainly due to the shift in the business direction of providing specialize extreme sports activity into a more focused holiday package scheme approach. The failure could be mainly caused by the inability of the brothers to project the desired targeted customers group by conducting poor marketing plans and strategies.
Franchisees could no longer bear the high investment costs which was eating up the entire earnings of the Wytee’s UK business operations in brand management. To prevent further erosion of revenue in its operations, Wytee’s should maintain its core operations in providing designated specialized extreme sports activities in their franchisees. To turn around the business operations in the Wytee’s UK branch, the brothers must accept that when the business has grown, certain business units must have their own goals and directions while maintaining the identity of the Wytee’s brand associated with the extreme sports activities. All the franchisees must have autonomy in their own business units directions and must be given a minority stake in the Wytee’s business as to promote loyalty among the franchisees without losing its main identity. As for the Wytee’s UK, marketing programs must be drawn up to address the weaknesses of the centre. Within the centre, they provide extreme sports activities such as canyoning, bungy jumping, mountain biking, cave diving and a specially designed street luge track.
It was later found in research that only the canyoning and the mountain biking were found to be popular among the tourists that visited the centre. To promote the less popular activities such as the street luge, Wytee’s UK should actually organize a street luge competition either yearly or quarterly in order to promote the popular sports which was more popular in other countries such as the US. This will eventually attract tourists from all over the country as well as outsiders to participate in the street luge competition. On the retail side of the business, Wytee’s UK should expand beyond their brand by promoting other branded goods to be housed in the UK centre. Wytee’s could actually promote the UK centre as a one stop centre for extreme sports activities as there are a huge potential in the extreme sports activities market segment.
To balance the low occupancy rate during the weekdays, Wytee’s UK should go in line with Saul’s suggestions of marketing the centre as a professional development centre for the corporate client market. Short courses on team building exercises which normally takes more than two or three days or other related development courses could be carried out in the centre to fill up the low occupancy rate during the week days. The facilities can be upgraded to meet the required mechanism in providing such development exercises. The above suggestions will promote Wytee’s UK not only as an extreme sports activity provider, it could also participate in organizing extreme sports competition, provide technical skills training for the extreme sports activists, training for management personnel who seeks team building exercises and professional development courses, center for extreme sports retail goods and also a one stop centre for extreme sports holiday. The franchisees could still provide additional coverage into other regional areas for extreme sports activities and an autonomy in their channel management by becoming a stakeholder in Wytee’s to ensure its loyalty and trusts.
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Boyd, Harper et al (1996) Marketing Strategy” Planning and Implementation. 2 nd Edition. Irwin McGraw – Hill Book Publications 2602 Strategic Marketing Text.
