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Marketing case study: Jamberoo Recreation Park

Prepared by Patrick Tansey, Head Teacher HSIE, Killara High School

Introduction
Relevant key syllabus concepts
Establishment
Change in prime function
Planning & total quality management
Impact of government
Business organisation
Case study materials on marketing and small business
Worksheet - An overview of business
Managing a small business
Worksheet - Small business management
Marketing strategies
Worksheet - The Marketing concept
Year 11 Business Studies assignment

Introduction

This is an excerpt from the excursion support materials, developed by BEE (a partnership of teachers and former Schools' VIP management). Schools booking excursions to the park receive pre-visit, on-site and post-visit worksheets and tests.

On the day of the excursion students enjoy a management presentation and then have 3 hours to observe the business while enjoying the rides. Excursions are available for business studies, commerce, geography (senior & junior) in both existing and new syllabuses.

Relevant key syllabus concepts

Primary industry, pro-active, changing prime function, quaternary industry, impact of technology, international influence, growth and diversification, the extent of management control over the impact of external factors, capital outlay, change over time, impact of social attitudes, organisational transformation, re-classification of a business, situational analysis, planning, business plan, marketing plan, strategic plan, objectives, human and financial budgets, evaluation and review, stages in business life cycle, growth, management theories, TQM, seasonal influences, government regulations, changes to the internal environment.

Establishment

In 1974 the Eddy family bought a dairy farm in the Jamberoo Valley in the south coast region. Unfortunately for the family, in 1976 the NSW Minister for Primary Industry reduced the milk quotas on the south coast by 20% and transferred the quota to the north coast. This government action effectively reduced the income of the Eddy's farm by 18% dramatically reducing the farm's viability. As the farm was only just financially viable prior to the reduction in quotas, the policy change left the Eddys with two options: to sell the farm or to develop new products that could be sold on the farm to supplement the income.

At about this time the Eddys saw a film of the Italian Olympic ski team practising on grass skis during the summer. They were using a grass ski manufactured in Italy.

Approximately 20 hectares of the northern area of the 80-hectare farm was very steep and had only a thin soil cover, making it unsuitable for agriculture. It was used as a night paddock for the cows. However, the family were keen snow skiers and thought that grass skis may work well on this steep section of the farm.

Change in prime function

They contacted the manufacturer and imported ten pairs of skis. The skis worked so well that they built a rope tow with a Holden motor and steel cable, and imported another twenty pairs of skis. In 1978 the family started hiring grass skis from a disused farm shed as a means of supplementing the farm income.

The grass skiing grew very quickly because it was such a novel sport. The most significant discovery for the Eddy family was the strength of the tourism industry and people's enthusiasm for escaping their crowded urban environment for a pleasant venue in the country.

In 1980, after gaining local and state government approvals, the family embarked on the first stage of the Jamberoo Recreation Park that you see today. Over the past eighteen years they have developed a number of stages and now have six major attractions and four minor attractions. When they began the first stage of the development in 1980, they did not have a business plan, strategic direction or a marketing plan, but just kept building rides and buildings. People discovered the Park through public relations and word of mouth.

Planning & total quality management

It was not until the mid-eighties that they started to plan and adopt an organised approach to managing human and financial resources. During the late eighties they refined the process and in 1989 developed the first business plan, with objectives. This plan was expressed in the form of a budget forecast.

By 1990 the Park was employing 15 full-time and up to 50 part-time people. The annual turnover was over $2 million and it became obvious that a more organised approach to managing the business was needed. Total quality management was introduced to the business, followed by the development of a strategic plan and a marketing plan. These are now reviewed twice a year.

Jamberoo Recreation Park has two marketing and financial planning periods, a summer period from October to February inclusive and a winter period from March to September inclusive. This is due to the seasonal nature of the amusement park business.

Impact of government

To be able to develop the Park, the Eddy family first had to submit a development application to the Kiama Council and then apply to the NSW state government for approval for recreational use of an area zoned for rural use. As part of the application, the developers had to address the environmental impact of the development by preparing an environmental impact statement.

Business organisation

The name of the business is Jamberoo Recreation Park. In other words, this is the business trading name. The owner of the Park is Propix Pty Ltd., which is a company. The management and characteristics fit the traditional definition of a small business. As this Park is being independently owned and managed by its owner-managers (who contributed most of the capital). There are four shareholders of Propix Pty Ltd, all members of the Eddy family.

Jamberoo Recreation Park is part of a group of businesses owned by the Eddy family. Their enterprises include a hotel and serviced apartments in Wollongong. This makes the Eddy group and Jamberoo Recreation Park part of the tourism sector of the services industry, providing recreation services to its customers and employment for the community.

Case study materials on marketing and small business

Free excursion support materials, based on the syllabus, form part of the package provided to schools booking excursions to Jamberoo Recreational Park. They complement the on-site presentation, worksheets and post-visit tests, prepared by the management of the Park. They were co-developed by Business Education Enterprises (former senior education officers, Schools' VIP managers and teachers). The excursion to Jamberoo Recreation Park includes time on the rides after the presentation by the Education Manager

The role and responsibility of Jamberoo Recreation Park in the local and national economy can be explained in numerous ways. Firstly, its role is to provide quality goods (rides and activities) and services (supervision and catering) to its customers. The Park must also provide an adequate financial return to the owners (the Eddy family) and pay taxes and rates to Kiama Council and to the State and Federal governments. Its other roles are to provide competition to alternative forms of leisure activities, to earn export income from the growing overseas visitor market and to manage a sustainable and socially just business practice.

The goals of Jamberoo Recreation Park can be broken into financial, social and personal. The financial goals are like those of all firms, to make a profit and increase sales. The social goals are to provide employment and a career path for local residents and for environmental protection of the property. The personal goals are to provide a quality and enjoyable experience at the park, to look after employees and to expand into other markets, with the Flower Barn as an example.

Jamberoo Recreation Park can be classified in a number of ways. The number of employees is one method. Jamberoo Recreation Park has 15 full-time and up to 60 casual staff. The value of its assets is another way. The Park has assets of approximately $5 million, with a turnover of $3.1 million for 1998-99. Another form of classification is the level of owner involvement. At Jamberoo Recreation Park the owner is involved in day-to-day decision-making and long-term planning.

Jamberoo Recreation Park uses numerous internal and external support services in the management of the firm. Internal services include marketing, maintenance, accounting and finance, human resources and administration. The external support services include lawyers and solicitors, cleaning, advertising and financial advisers.

Like any business Jamberoo Recreation Park must have a business plan. This is needed to keep the business on track to reach its goals. Secondly, it is needed to cope with changes in the Park's internal and external environment. Thirdly, a business plan can identify the park's strengths and weaknesses.

Now test your knowledge with the following questions for the topic, Management in action.

Worksheet

An overview of business

What is the role and responsibility of Jamberoo Recreation Park in the national economy? (Refer to the duty and or benefits to all stakeholders). (Bulmer p.8, Sykes Bk.2, p.103)

The first one has been done for you.
1. To provide employment
2. .................................................................................................
3. .................................................................................................
4. ..................................................................................................
5. ..................................................................................................
6. ..................................................................................................
7. .................................................................................................
8. ................................................................................................
1. What is the prime function of Jamberoo Recreation Park? (Bulmer, p.11) (Sykes, p.103)
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2. What are the goals of Jamberoo Recreation Park?
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List four ways in which Jamberoo Recreation Park can be classified.
1. ..................................................................................................
2. ..................................................................................................
3. ..................................................................................................
4. .................................................................................................
List the support services Jamberoo Recreation Park might use. (Bulmer, p.12)
1. Internal
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2. External
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List three reasons why a business plan is important to the operation of Jamberoo Recreation Park (Bulmer p.12)
1. ....................................................................................................
2. ...................................................................................................
3. ...................................................................................................
The business environment
List the features of the internal business and external business environments of Jamberoo Recreation Park (Bulmer p.30), 31) (Sykes P.101).
1. Internal
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2. External
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Managing a small business

Jamberoo Recreation Park outsources the following support services (advisers and experts), legal experts, financial advisers, high tech maintenance and engineering, cleaning and security. Specific administration and information services conducted at Jamberoo Recreation Park include telephonist/receptionist (taking bookings & enquiries), marketing (mailouts & creating database of contacts) and human resource management (rostering & staff training).

Jamberoo Recreation Park is currently using EFTPOS as the main form of electronic trading and electronic data interchange. Other forms of EDI which the Park could use include using the Internet or e-mail to send advertising information and to set up a web page, with a virtual reality ride down the toboggan track.

Below is the organisational structure of Jamberoo Recreation Park.

Organisational Structure

Jamberoo currently has contracts with soft drink suppliers, ice cream suppliers, general food suppliers, souvenir providers, educational consultants and maintenance firms.

A high emphasis is placed on quality control. Feedforward controls exist for food and other supplies; quality controls also occur with careful staff selection and induction training. Quality control continues with concurrent monitoring of all services and regular staff evaluation and training. Maintenance staff conduct physical ride inspections to ensure safe products are provided. Staff in ride supervision and catering are particularly useful in feedback controls, noting customers' comments and conducting regular surveys.

Management has a crucial role in developing the market mix (4Ps) of Jamberoo Recreation Park in the following ways:

The Marketing Mix (4Ps)
Product	Decide what rides are to be introduced, used, phased out as leisure trends change. Train and monitor staff to maintain high standards of service.
Place	Difficult to change. Provision of free or subsidised bus services makes access to the park easier.
Promotion	Marketing manager and advertising agent make decisions on: target market (age group and geographic location) type of advertising medium for advertising
Price	Managing director sets prices to: Cover running costs Align with competitors’ prices and movements Provide discount incentives for large groups

Now try your knowledge on Jamberoo Recreation Park for the topic, Small business management.

Worksheet

Small business management

(excerpt)

When did Jamberoo Recreation Park first use a business plan?
1. 1974
2. 1978
3. 1980
4. 1989
Jamberoo Recreation Park can be classified as a small business because:
1. it has 15 full-time staff
2. the owners are also the managers
3. it has only a small market share
4. of all of the above
Dairy farms declined in the area because of:
1. economic downturn
2. technological change
3. political influence
4. rising interest rates
What share of its total target market does Jamberoo Recreation Park have?
1. 60,000
2. 120,000
3. 800,000
4. 8%
Jamberoo Recreation Park is a private company because:
1. it is easier to manage than a partnership
2. the business has expanded
3. it protects the owners from personal loss
4. it is cheaper to form than a public company
Jamberoo Recreation Park has opportunities to:
1. diversify to nursery retail
2. host more company functions
3. add a roller coaster
4. re-introduce dairy farming
Jamberoo Recreation Park's greatest weakness is:
1. variation in cash flow over the year
2. relatively isolated location
3. weather-dependent rides
4. increased competition
In order to avoid increased costs and still use the best inputs, Jamberoo Recreation Park:
1. outsources specialist functions
2. employees casual staff
3. does not advertise on TV
4. spends as little as possible on maintenance
At which stage of the product life cycle is Jamberoo Recreation Park?
1. establishment
2. growth
3. maturity
4. decline
5. renewal
As a small business Jamberoo Recreation Park finances most of its operations from:
1. overdrafts
2. debentures
3. retained profits
4. owners' equity

Marketing Strategies

Jamberoo Recreation Park considers marketing as a crucial element of its business plan. Approximately 25% of the business plan involves marketing. The marketing plan identified the personnel involved (marketing manager, contracted advertising agent, sales officer and other outsourced consultants). The marketing plan has a budget allocation of $300,000 for advertising and marketing.

The goals of the marketing strategy include increasing sales, maximising customer satisfaction, ensuring repeat customers and accessing new targets. The connection between the marketing goals and Jamberoo Recreation Park's objectives is that more visitors mean more money.

Marketing has been defined as "the process of developing a product, pricing it, promoting it and placing it on the market". Jamberoo Recreation Park's objective is "to develop rides and promotions to maximise customer satisfaction.

In efforts to identify new opportunities and plan for them, Jamberoo Recreation Park constantly analyses and updates its SWOT analysis. A summary of its SWOT is outlined below.

Strengths
Unique product (customer-controlled rides and activities), tranquil, natural site (rural Jamberoo Valley) and well-trained staff.

Weaknesses
Location: it is a long way from the target market in Sydney (65% of customers) and is not on a major transport route; high maintenance costs of the product.

Opportunities
Tour operators bringing interstate and overseas groups to the area; grey market: marketing the Flower Barn to retired groups and school curriculum groups.

Threats
Increased competition (Easter Show at Homebush, Sega World, home-based entertainment), public liability and poor weather.

The fundamentals of marketing are often approached using the 4Ps: Product, Price, Place and Promotion.

Product
The product of Jamberoo Recreation Park simply constitutes all the rides and activities which the customers use. This includes the toboggan tracks, the go-karts, the speedboats and water slides for example. The management is involved in the careful monitoring of customer trends to see if the products become out of date. Grass skiing, for example, lost its popularity in the early 1990's so the decision was made to delete the product from the product line.

Price
Jamberoo Recreation Park's pricing structure involves comparisons with what other organisations offer (e.g. Australia’s Wonderland: Adults $37, Children $27; Jamberoo: Adults $22, Children $20). There is also a pricing structure to encourage larger groups to book with Jamberoo; group sizes between 20 and 50: $17; 50-100: $17; 200-400: $16.

Place
Jamberoo Recreation Park's geographic position is both an advantage and a disadvantage. The disadvantage is that Jamberoo is up to two hours' driving time from its geographical target market of Sydney and is not on a direct transport route, like a freeway or rail line. A free bus service is therefore advertised to transport customers from the local railway station. The advantage of Jamberoo's position is the scenic rural setting, Jamberoo Valley. This is advertised with print media in particular, with pictures of the valley prominent in brochures.

Promotion
Numerous promotion methods are used to reach our various markets. This includes mail-outs and faxes sent to social organisers of community clubs and groups. Follow-up phone calls are necessary because of the usual 1% reply rate from this sort of promotion.

Brochures in the foyers of local hotels are used to reach tourists visiting the region. Newspapers are used on weekends at times when people are planning things to do with their leisure time. Television is sometimes used, but only at times when our target market (10-25-year-olds) are watching, such as Home and Away, Video Hits and Friends.

Jamberoo Recreation Park uses different themes with different customer markets. For 5–10 year-olds the theme is fun away from the suburbs, for 10-18 year-olds it's fun and thrills without parents, parents of 5-18 year-olds it's a family picnic in a tranquil setting that provides safety and supervision of children.

Worksheet

The marketing concept

Examine a copy of Jamberoo Recreation Park's business plan.
Approximately what proportion is taken up by the marketing plan?
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List the goals of Jamberoo Recreation Park's marketing strategy.
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What is the connection between the marketing goals and the objectives of Jamberoo Recreation Park?
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1. Define marketing.
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2. What is Jamberoo Recreation Park's definition of marketing?
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What is the overall goal of Jamberoo Recreation Park's strategy? (circle the best response)
1. Maximise consumption
2. Maximise customer satisfaction
3. Maximise choice
4. Maximise quality of choice
Complete the following table to identify the internal and external influences on Jamberoo Recreation Park's marketing plan.
1. Internal Influences
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1. External Influences
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Year 11 Business Studies Assignment based on Jamberoo Recreation Park

By going on an excursion to Jamberoo Recreation Park students can complete a practice assignment. The following questions will assist you to better understand how to complete your formal assignment on a local business.

What is the prime function of Jamberoo Recreation Park?
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What is the Mission Statement?
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List the 2 main goals or objectives of the business and at least one strategy used to achieve each.

Goal 1:
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Strategies
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Goal 2:
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Strategies
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Classify this business according to:
1. industry sector ..................................................................................
2. size ....................................................................................................
3. work type ..........................................................................................
4. legal structure (ownership) ..............................................................
Briefly outline the history of the business
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What are its support services?
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Describe the marketing mix, and place in order the relative importance of each of the "four Ps". i.e. Product, price, Promotion, Place and (Market) Positioning (i.e. P1 selected as the most important part of the mix)
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P1. ..................................................

P2. ................................................

P3 ..................................................

P4. .................................................

P5. .................................................
Ownership ...................................................................................................
Organisational structure (later construct a 1-page chart showing positions and duties)
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List:
1. customers
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2. suppliers
  
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3. competitors.
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What are the constraints & influences of the external environment?
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List the stakeholders.
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List the legal requirements.
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List the current and desired business assets.
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List the current and past sources of finance used by this business.
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What is Jamberoo Recreation Park's projected annual cash flow?
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List significant:
1. expenses
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2. revenue items
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Identify the stage in the business life cycle. (Briefly explain your response.)
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Evaluate the current state and future prospects of Jamberoo Recreation Park.
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For more support materials on Jamberoo Recreation Park, an excursion or a seminar contact:

Jamberoo Park