• An analysis of Alton Towers industry environment using SWOT and Five Forces

SWOT Analysis

SWOT analysis is technique for analysis of an industry’s internal factors (strengths and weaknesses) and external forces (opportunities and threats) (Murray-Webster, 2010). It is valuable for identifying risks and gaining insight into competitors and market position assisting in strategic decision-making (Boone & Kurtz, 2013 p.46). Following is the SWOT analysis of Alton Towers.

Strengths

• Alton Towers holds an appeal to a large demographic of people. That is, there is a greater range of ages of target customers, from children, to young adults and senior citizens.
• The company has a strong marketing mix and marketing team that is headed by specialist marketing agencies employing excellent marketing strategies.
• Alton Towers has a strong brand name that is anchored on its rich history and its range of well-known and quality rides. It also has high quality facilities and products.
• The company also has an effective website design and a mobile first design and direct-to-mobile ticketing provision that facilitate easy ticketing and easy access to information on facilities and products offering by the company.

Weaknesses

• The industry has high levels of seasonality, this forces the company to be open during particular times of the year, or charge lower prices which results in lower revenues.
• The occurrence of accidents at the park indicates a weakness in its technical operations. This can have the effect of worrying and alarming customers from coming to the park.
• Alton Towers location presents a weakness to the company. Alton Towers in located in a relatively rural location and this presents a difficulty for customers who want to visit.
• The company charges prices that are more expensive especially during peak times comparable to its competitors.

Opportunities

• The company can introduce new, more advanced and innovative products and services. This will have the effect of attracting first-time customers while promoting customer loyalty.
• The company can form strategic collaborations with other brand companies, for example, Cadburys. This will improve the Alton brand and attract more people to the park.
• Coming up with seasonal events will ensure customer traffic all round the year.
• Alton Towers could divest into the transportation business to facilitate transportation of customers from surrounding towns to the park.

Threats

• Alton Towers faces the threat of the possibility of increased technical faults that may result in injuries to customers.
• New developments and innovations in indirectly competing industries may undermine the performance of Alton Towers. In addition, the direct of competitors of Alton Towers such as Thorpe Park may act as a source of threat especially with the introduction of newer more recent products.
• Government legislations may have a negative effect on the performance Alton Towers. This threat is coupled with the threat of more stringent safety rules and stringent health rules that may result in modification of rides and other products.

Porters Five Forces

Hilpern (2016) states that Alton Towers is one of the best theme parks in the United Kingdom notwithstanding that the country’s theme park industry is undersized with only five major competitors. However, various factors within the environment can affect the success of a business operating in the industry. In the amusement park industry, Porters Five forces influence the competitive position of a business. They include Supplier Power, Buyer Power, Competitive Rivalry, Threat of Substitution, and Threat of New Entry.

Supplier Power: Suppliers have a high bargaining power in the theme park industry. This is because of the few suppliers of attractions needed in amusement parks. The major suppliers are Intamin, Bollinger & Mabillard, Vecoma, and the Gravity Group. Their fewness gives them undue advantage in influencing the prices of products and services.
Buyer Power: Buyers have a high bargaining power in the amusement park industry. This is because there are many recreation facilities alternatives from which Customers can choose. Therefore, Alton Towers needs to maintain favourable pricing and differentiate their product and service offerings.
Competitive Rivalry: There is extreme rivalry and callous competition among players in the theme-par industry, for example from Thorpe Park. This forces players to endeavour to set themselves apart through continuously innovation and improvement of the customer experience through product innovation and improvement. This competition has forced and influenced Alton Towers marketing plans.
Threat of Substitution: The threat of substitution is strong. There are many alternative recreation activities available for customers to enjoy, for example adventure sports. Therefore, Alton Towers has to ensure that they constantly innovate new product offerings to improve the customer experience to keep the customers interested with their product.

Threat of New Entry: The visitor attraction and entertainment industry involves high investment in terms of financial and capital outlay, as well as in legal requirement in terms of environmental policies and government regulations. These preconditions act as barriers to entry and exit from the industry. This therefore makes the threat of new entrants very low.

• Analyse how Alton Towers are positioned in relation to two or more direct or indirect competitors

The direct competitors of Alton Towers include Thorpe Park, Drayton Manor, and Pleasure Beach Blackpool. According to Hilpern (2016), these facilities form some of the best entertainment spots in the United Kingdom and globally. While Alton Towers are not directly offering the same products and services with its competitors, it provides an excellent and thrilling customer experience compared to them. In terms of pricing, Alton Towers charges on average a higher price than its competitors. However, an analysis of the cost would have to take into consideration the offerings and whether it is value for money. In terms of products and services offering Alton Towers has specialized offerings that meet the needs of a wide range of customers, from children, adolescents, young adults and senior citizens. This has made it a favourite for many customers. On the other hand, while its competitors have their own unique offerings, customer reviews and market share statistics evidence that Alton Towers has better products and services offerings. Alton Towers also continually endeavours to adopt innovation and creativity in its offerings relative to its competitors. These offerings and strategies make Alton Towers stand out and more competitive.

• Apply the output from Tasks 1 and 2 to the Ansoff matrix to select an appropriate strategy for Alton Towers. Using the selected quadrant from the Ansoff matrix, then set suitable, and justified, marketing objectives which will enable Alton Towers to continue their growth in the UK – objectives should be SMART and relevant to the case study

The most appropriate strategy for Alton Towers would be a combination of product development and Diversification. The suitable, and justified, marketing objectives which will enable Alton Towers to continue their growth in the UK market would include:

1. Use the media efficiently to support key volume targets.
2. Firmly differentiate Alton Towers product and service offering from Thorpe its main competitor
3. Increase marketing spending and plan.
4. Push the “thrill” experience further and integrate it throughout the business, establishing Alton Towers as United Kingdom’s thrill capital
5. Push massive annual pass sales
6. Drive off-peak volumes

• Evaluate Alton Towers’ current marketing mix (4 P’s) and recommend how this could be improved over the next twelve months to achieve the marketing objectives

According to Slack & Lewis (2015) getting the right marketing mix can significantly improve the bottom-line of any business. This involves getting the right product in the right place at the right price using the right type of promotion (Horner & Swarbrooke, 2012). A successful marketing mix gains more customers and increases the likelihood of success. The marketing mix at Alton Towers involves:

Product: Alton Towers has remained United Kingdoms number one short-break destination. This has been attributed to its quality products and service offerings. The consumables at the resort are world class, while the services are an exciting experience. Also its brand name sets Alton Towers apart from the products offered by its competitors. For example, the Alton Towers resort, SharkBait Reef by SEA LIFE, Oblivion and SW6.

Price: Alton Towers has competitively priced its products and services offering giving value for money to suit all audience types by offering options that appeal across its target markets. Its ticket pricing types include senior citizens, disabled, Under 4’s, groups of 10+ and the annual pass. In addition, it drives customer to visit the park during the slower seasons of the year by use of special offers and price incentives.

Promotions: Alton Towers has employed various promotional techniques to communicate its offerings and to drive awareness. The company has employed the services of specialist marketing agencies to drive their promotion strategies in order to develop a suitable campaign strategy. It has employed various promotions and communication mix including Television, radio, digital, outdoor and press to maximize the public awareness of its product and service offerings and attract people to visit. It has also employed the use of various direct marketing tools including e-shots, and door drops, and other promotional tools such as personal selling and public relations. This has ensured that the Alton Towers brand is visible in the public.

Place:  the environment upon which Alton Towers is located is unique, embracing a fusion of the natural environment and modern ambience, attracting both lovers of nature, and people passionate about modernism and stylishness. The Alton Towers is also located in fairly accessible environment.

How Alton Towers marketing mix could be improved to achieve the marketing objectives

According to Morgan & Pritchard (2012), European theme parks must be cognisant of four key maxims: anticipation, repositioning, expansion, and consolidation. The authors suggested theme parks must be unique, they should be must-see destinations, and they must have a variety of attractions offerings, and must blend a mixture of high-tech with human scale and quality services. The authors further state that a theme park should encourage overnight stays, have complementary destination activities and employ marketing strategies that ensure public exposure and media coverage. These elements identified by Morgan & Pritchard (2012) provide the avenues through which the marketing mix of Alton Towers can be improve and marketing objective can be achieved.

Alton Towers marketing mix could be improved in various ways to ensure achievement of the marketing objectives. First, Alton Towers has a global brand presence with a diversified portfolio. But despite this, it has a lower market share. This has been attributed to high brand value and promotional strategies employed by its competitors. To improve Alton Towers marketing mix, the company can come up with marketing strategies that create an everlasting impression about the Alton brand. The company can increase its brand promotion through launching Alton Towers animations for the younger generation to foster recognition of the Alton brand. It can also conceive advertisements that showcase its brands to increase its public awareness of its product offering.

Alton Towers can also strengthen its operations by expanding its market presence. This can be achieved through new product development and improved customer experience to thwart the threat from competitors. For example, Alton Towers can strengthen its resort destination position by improving its boarding customer experience and leisure activities at its park. This product marketing mix would help in growth of the brand in new markets and increased customer spending. Also, the company can employ AIDA to help ensure that promotional material capture the interest of customers. AIDA involves A (Attention) which entails getting the attention of the customer; I (Interest) involving keeping the interest of the customer; D (Desire) which involves creating a desire to want to do something; and A (Action), driving the customer to action.

Alton Towers can improve its product marketing risk by improving the service provided by its staff. According to Horner & Swarbrooke (2012), in the service industry, staff play a very critical role in influencing tcustomer experience of customer.  As such it would be critical that it embraces quality service standards in its operations. Towards this, Alton Towers can train its staff on industry best practices in hospitality, as well as train them on how to be effectual in generating sales from customers who approach Alton Towers for assistance and information. To improve Alton Towers promotion marketing mix, the firm can also employ sales promotion through transient marketing tools used to accomplish certain marketing objectives, for example free gifts with purchase and competitions. The execution of these marketing mixes by Alton Towers would result in an improvement of performance eventually resulting in the achievement of the marketing objectives.

• Critically evaluate the role of one of the elements from Alton Towers Extended Marketing Mix in delivering superior value to customers and make suitable recommendations for improving this element

One of the more significant extended marketing mix is the role of people. This is especially so when a company is involved in business that involves provision of services and involves a lot of face to face interactions. Alton Towers being a business entity involved in such an industry, people, especially employees play an important role in influencing customer experience and satisfaction, two elements that are critical in determining the success of any business venture. According to Blanding (2012) satisfying the customer is key in achieving competitive success and customer service takes a center position in the service industry. Customers will be more willing to pay price premiums for products and services when a company practices good customer service. They are also more likely to loyal to organizations that treat them well.

In the case of Alton towers, the customer experience has been epitomized through a friendly and professional staff. Customer service is top quality, employees’ standards of service are high and customer expectations are met. This has been achieved through a culture of continuous staff training, a satisfying staff reward scheme and job security. This results in improved customer service and customers needs satisfaction.

The people extended marketing mix at Alton Towers can be improved through various initiatives. First, Alton Towers can employ a culture of continuous staff training on industry best practices in hospitality and customer service provision. This will keep the staff updated and equipped with the best practices of customer care and consequently improve the standard of service provided by the staff to the customers who visit Alton Towers. To further improve the people marketing mix, the management of Alton Towers can make efforts to know who its customers are, where they come from, what their expectations are of the products, and what they expect of the Alton Towers experience. This will facilitate better tailoring of products and services to the customer’s expectations through staff preparation, product customization and staff training.

References

Blanding, W. (2012). Practical Handbook of CUSTOMER SERVICE OPERATIONS. Washington DC: Springer Science & Business Media.

Boone, L. E., & Kurtz, D. L. (2013). Contemporary Marketing. Boston, Massachusetts: Cengage Learning.

Hilpern, K. (2016, May 10). The UK’s 10 best theme parks. Retrieved from The Independent: http://www.independent.co.uk/travel/uk/theme-parks-uk-themeparks-alton-towers-chessington-thorpe-park-review-a7021136.html

Horner, S., & Swarbrooke, J. (2012). Leisure Marketing: A Global Perspective. Burlington, MA: Routledge.

Morgan, N., & Pritchard, A. (2012). Advertising in Tourism and Leisure. Woburn, MA: Routledge.

Murray-Webster, R. (2010). Management of Risk: Guidance for Practitioners. London: The Stationery Office.

Slack, N., & Lewis, M. (2015). Operations Strategy. New York City, New York: Pearson Education Limited.

 
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