Evaluate Murphy’s Ice Land’s situation. What should Eduardo Black do? Why?
Murphy’s Ice land has an ice-skating rink that is most suitable to be used as a hockey rink. Murphy's Ice land is the only rink in the city of 350,000 people. The hockey program can attract a good number of potential players thus ensuring the breakeven point is attained. However, to ensure Murhpy’s Ice Land increases its sales using the same facility and infrastructure, Eduardo has come up with something that is not conventional. Eduardo is planning to add another staking program. He thought that with limited efforts and planned investment, Murphy's will be able to easily attract more customers and aid in earning better revenue. However, there is no idea to drop hockey programs anytime soon in the future. The current plan aims to utilise the capital resource and market awareness better to attract more customers and provide multiple ranges of business offerings. Initially, it was anticipated to attract at least 700 individuals during the session at a concessional rate of $5 an hour. Eduardo thought the public session will be a success due to the following factors:
• Murphy’s is the only staking facility available in the northern part of the city. With reduced competition, the scope to grow and capture the market would be better. As an add-on feature, the city has a population of 350,000 which makes it a considerably large market.
• Murphy believed that with limited investment, in the long run, it will be able to break even soon. Thus it can increase sales.
• Thus Eduardo was aware that public sessions will take time to attain the desired result, however, with time it was possible.
However, very soon Eduardo understood that public sessions are no easy task, and attracting customers is a task by itself, let alone the other efforts and costs involved in setting up the session. The following are the primary issues, Eduardo was facing (Jian-Guang & Yao, 2018):
• Even prime times like Friday and Saturday failed to attract the customer.
• The additional cost involved in setting up the whole activity like ticket counter employee, trainers, guard, rental equipment, etc was more strain full than a routine hockey session.
• The public session was more viewed as a babysitting or kid sitting arrangement than as a recreational sport where parents dropped there in the facility.
• Due to the presence of kids, young couples and older patrons weren't attracted to the facility. Thus Murphy's Ice land had potentially lost a major chunk of the potential market space. At the same time, Eduardo wasn’t in a position to restrict kids below 14 since over 75% of the attendees were less than 13 years.
• The weather was a deterring factor, particularly during spring and fall. Though nothing much can be done, an alternative plan too wasn't in place.
• Though considerable infrastructure was developed, the expected results were poor.
Despite not being able to attain the desired results, Eduardo still has hopes for improving the revenues and sales, especially during the prime time of Friday and Saturday.
Eduardo should still pursue the idea of adding the public session to increase the customer base and also contribute to better revenue generation opportunities. Some of the reasons why such a decision is needs serious consideration are discussed below: (Valdes, 2018):
• Existing trained and experienced staff - The most common conception of the public session is just fun and no learning. All efforts are taken to ensure the myth is broken. Murphy has already aimed at employing well-trained and experienced instructors to increase customer satisfaction. To attract the attention of the customers in the long run, teaching them the sport will go a long way.
• Potential market - It is important to identify and acknowledge that every customer segment is different. Thus it is essential to categorize them based on demographics or need to meet their needs better. For example, kids below the age of 14, young couples, teenagers, etc will have to be divided and catered to their needs separately. Thus much of the concentration and planning should be aimed at market segmentation and market concentration. Along with this, scheduling the session according to their feasibility is critical. Detailed market research has already been undertaken by Murphy’s.
• Entertainment factors - At the end of the day, the very purpose of public skating sessions is entertainment and a way to unleash from the routine life. Hence Murphy has systematically invested in developing the required infrastructure in terms of lighting, sound, atmosphere, etc, and linking them to the market segment that helps to boost sales.
• Non-seasonal sales - It is also essential to considerably concentrate during non-seasonal times like the spring and fall. Using some technology and innovative thinking, the same turf or rink should be used for other teamwork or game. Some special events and placement will be able to Murphy's meet the basic financial requirements to operate the rink. , Murphy’s is considering the public sessions solely for this purpose.
• Marketing and advertisement - Using advertisement and promotion is an important linkage to the potential market. However, it is essential to understand to use the right kind of marketing techniques and tools to attract the participants. Extra care should be given to traditional techniques such as radio or television or new papers, etc. the reason being modern patrons might perceive Murphy's to be more conventional and old-fashioned (Salonen, 2020). At the same time, Murphy's should also aim at using short-term promotion techniques like concessional rates, offers, discounts, etc should not aim at devaluing the reputation of the business. The purpose of advertisement and promotion is to attract, retain, and enlarge the target market.
• Reputation – since Murphy’s is a well-reputed recreational institution it is easy to build partnerships and collaboration. Murphy's should aim at building partnerships and collaborating with parties such as other staking centres across the country, schools and educational institutions, restaurants and hotels, and other recreational centres. Partnership with these entities will be able to identify more customers.
• Last but not least, it is essential to understand that public skating sessions are not similar to operating any other regular business. It requires specialized skills and expertise to attract customers with varied backgrounds and needs. A specialized and concentrated group will be able to help Murphy's to build a good system and market database (Loures, Gómez, Castanho & Loures, 2020).