Sales and Marketing Management of Ocean Park Hong Kong
1. Introduction
Ocean Park is the biggest educational park located in an 870,000 square meter of land in Aberdeen, Hong Kong. The theme park receives four million local and international visitors every year. The educational park operates as a non-profit organisation. The vision for Ocean Park is “to be the world leader in providing excellent guest experiences in a theme park environment connecting people with nature”. The concurrent mission of Ocean Park is to provide visitors with a memorable experience through a combination of education and entertainment while at the same time encouraging visitors to take interest in conservation and environmental learning. As a provider of public service, the company seeks to achieve financial soundness while at the same time providing visitors a wide range of quality products and services at competitive prices. Ocean Park provides a wide variety of activities including an entertainment theme park providing games and rides, nature tours to visit land and sea animals, and educational activities such as interactive museums and feature galleries. To enhance value for consumers, Ocean Park also has booths and shops providing souvenir products as well as food and beverage. Soon with the completion of its redevelopment project in 2012, Ocean Park would soon be able to provide hotel accommodations. (Ocean Park 2008a)
Ocean Park is positioning itself in the market as a unique educational and recreational destination by developing its nature conservation slogan. This is to differentiate itself from Disneyland, which is its strongest competitor. While Disneyland feature animated and cartoon characters, Ocean Park provided fun and interactive activities that visitors can have with animals and nature. This manner of positioning enabled Ocean Park not only to establish its brand but also to set itself as an alternative to Disneyland. (Ocean Park 2008b)
Ocean Park is a large organisation with 1,500 workers, which should double with the completion of the redevelopment plan in 2012. The large employee pool is necessary to operate the 870,000 square meter educational parks divided into different theme areas such as the sea and land educational divisions as well as the many restaurants and cafes inside Ocean Park. In addition, its employee pool also services 400,000 visitors every year. Due to its size, there is only one Ocean Park in Hong Kong and the immediate region. (Ocean Park 2008c)
Ocean Park develops its appeal by developing a unique business concept by combining education, entertainment, and environmental conservation into a single park experience. Unlike zoos, Ocean Park plans interactive learning activities involving visitors, animals and nature. Unlike Disneyland and other leisure parks, Ocean Park provides entertainment through exciting experiences for individuals, peer groups and families of the natural environment. In this sense, the company retained its core traditional values but developed activities that meet the interests of current consumers. (Kelly 2007) By doing so, it is market leader in this sector of the leisure market.
Ocean Park targets a wide variety of customers including households, educational institutions, and business firms as well as local and international visitors. These are the major customers of Hong Kong Park. Currently, the biggest market of Ocean Park is households and educational institutions. With the redevelopment plan, the company expects to expand its local and international corporate market and draw more foreign tourists to the educational park. By providing products and services appealing to a wide market, the company has a wide room for expansion.
As part of the sales and marketing department, I have first hand experience in the development of ways for Ocean Park to build and maintain long-term relationship with customers. The sales and marketing departments handles the development and implementation of strategies intended to draw and sustain customers to Ocean Park. The department has a number of sub-groups, including the marketing group for the food court at Ocean Park, which I work as a sales executive. The sales executive position entails the achievement of quality and diverse products and services, adequate accessibility of the food court to consumers, complete service, appealing venue, and customer service to support a positive experience of Ocean Park visitors with the food court. The sales and marketing functions for the food courts follows and business-to-business-to consumer approach (Campbell, Evans& Stonehouse 2002). This is because Ocean Park developed the facilities and provided utility services to the entire food court but leased these to food and beverage franchises. The sales and marketing group assigned to the food court handles functions directly affecting business firms engaging in the lease while at the same time providing direct services to consumer.
The project investigates the different stages of the buying process of customers relative to the roles of the sales executive and assesses the effectiveness of the role to draw recommendations for improvements.
2. Methodology
The success of sales and marketing efforts depends on how well products and service features and delivery match the demands of the target market. To understand customer demands and needs requires thorough consideration of the buying process of consumers. The buying process constitutes the entirety of the activities or phases of decision-making on the part of buyers. The process can take seconds or even months to complete depending on the considerations pondered by buyers. Regardless of the period it takes to complete the buying process, this commences when buyers realise a need. After identifying the need, the usual succeeding step is to search for means and venues in meeting this need. Buyers look for various sources of information to establish or readjust their purchasing criteria. The criteria would later on support the selection process including the identification of alternatives or options to the narrowing of the options to the top options. The consideration of alternatives or options comprises an evaluative process. The evaluation would lead to the decision to make a purchase and the selected product, service, brand or company. The decision to make a purchase could lead to an actual purchase. A decision does not necessarily proceed to an actual purchase so there is need to focus on these steps individually. The last step is the re-evaluation of the purchasing decision and the outcomes. Although the buying process ends here, the process is cyclical. This means that information and experiences learned by engaging in a buying process comprises the foundation of future buyer behaviour. In summary, the buying process involves the following steps: 1. identification; 2. searching; 3. evaluation; 4. decision-making; 5. purchasing; and 6. re-evaluation. (Rice 1997; Solomon, Bamossy & Askegaard 2002)
Marketing and sales efforts need to exert influence in the various steps of the buying process to ensure actual purchases but also to support positive experiences that support additional or future purchases. The conscious involvement of a business firms in the buying process supports positive buying behaviour and actual purchases. (Rice 1997; Solomon, Bamossy & Askegaard 2002) The sales and marketing department of Ocean Park develop activities and efforts intended to support consumers in the buying process. In creating and understanding the needs of consumers, Ocean Park applies a hands-on and immersive strategy by observing and communicating directly with customers regarding particular products and service experiences. Ocean Park also established several customer service booths throughout Ocean Park to cater to the information needs and complaints of customers. The sales and marketing team also take on realistic perspectives by considering themselves as customers to determine the weaknesses of the educational park and the improvements they would want as customers. The department also considers entertainment trends for its target market to determine activities included in its roster of educational and leisure activities. These then supports decisions on improvements. Ocean Park creates as much as it responds to needs. Ocean Park creates needs by developing innovative features that the firm believes would attract visitors and causes them to decide to spend to view the attraction. Ocean Park also reacts to the needs of consumers by translating educational and entertainment trends into park features.
Apart from understanding the needs of consumers using various methods to respond and create needs, Ocean Park also employs activities designed to support and reinforce the buying process to achieve actual visit to the park as the targeted outcome. One method is information dissemination (Kotler & Armstrong 2001). Ocean Park provides information to customers via leaflets, press releases, radio announcements, and online website information. This supports the search step in the buying process. Another method is promotional activities (Kotler & Armstrong 2001) such as the payment of a lump sum amount for a one-year pass to provide value to consumers and other means of price bundling. These promotional activities influence the evaluation and decision-making steps. Still another activity is the provision of assistance to visitors in the form of customer service to facilitate the decision and actual purchase (Kotler & Armstrong 2001). Lastly, fulfilment of value offering positively influences the re-evaluation step in the buying process.
The food court area also adopts these marketing processes intended to ensure influence throughout the steps of the buying process. The business-to-business aspect of marketing for the food court involves the drawing of a wide range of food and beverage franchises that meet the needs of Ocean Park consumers. Sales and marketing team for the food court determines and selects the preferred franchises before developing incentive arrangements to draw these franchises to establish food and beverage shops inside Ocean Park. The business-to-consumer aspect of the food court means that the marketing and sales teams develop a products, services and other features reflecting the needs of consumers based on high selling products such as beverages and light snacks that can be carried while walking around the park as well as full-service restaurants for those enjoying food in a scenic location. The food court and the franchises also form part of the leaflets distributed to visitors.
As a sales executive, part of my responsibilities is to assess continuously keep track of the food and beverage needs of consumers by observing and speaking with customers directly about the existing service and drawing recommendations for improvement. I also evaluate the performance of franchises to determine the effectiveness of the selected franchise and determine ways of improving facilities and service features on the part of Ocean Park to improve customer traffic to the food court and the various franchises. I also consider the demand side by observing purchasing behaviour at the food court and integrating the observed purchasing behaviour with input from customer service to identify areas for improvement and establish incentives or motivational activities to support actual purchase at the food court and ensure a positive experience.
3. Effectiveness of Firm Alignment with the Buying Process
3.1 Identification of Customer Needs
The methods employed in supporting customers throughout the buying process were able to help the marketing and sales department identify the needs of customers (Boone & Kurtz 1992). Based on the decline of Ocean Park a few years ago, because of the dwindling of visitor traffic, Ocean Park identified diversity as the need of customers (Porter 1998) from a park. This means that to establish customer patronage in the long-term, there should be new activities and features every so often and the variety of the activities should match various preferences and tastes. In addition, customers also require value for money so that the price should be worth the experience. Moreover, the activities and features of the park should be distinguishable and different from consumers. By introducing new activities and features, Ocean Park was able to regain customers to compete with Disneyland. Now, Ocean Park receives four million customers every year. To increase and sustain its customer traffic, Ocean Park is currently finishing its redevelopment plan set for completion in 2012. As such, investing in market research methods such as observation, customer feedback surveys, external customer surveys and research, and trends analysis supports the sales and marketing objectives of the company by enabling the company to relate or establish links with the buying process of its customers (Churchill & Peter 1995).
3.2 Market Segmentation/Target Segment/Marketing Positioning
The methods employed by Ocean Park to align with the buying process of consumers also enabled the determination of its target market. Market segmentation is the determination and selection of a market for a firm based on criteria reflecting the needs that the firm seeks to address. Segmentation, implying the focus on a particular group, offers the benefit of focused marketing strategies that captures the needs of the groups and ensures market capture or consumer uptake of products and services. Market segmentation emerges from an understanding of the market. (Piercy 2002) Generally, Ocean Park has three market segments including individuals and households, educations institutions, and corporate organisations. Specifically, individuals and households comprise of local and foreign tourists. Ocean Park reaches out to individual and households across the various income class and racial background. Educational institutions targeted comprise primary school students taking a field trip to the park for their science and history lessons to college students visiting the park for exposure to issues within the scope of their courses such as conservation and business managements through internship programs. Corporate customers also comprise the newest market segment targeted by Ocean Park, especially after the completion of the hotel within the park that could cater to conferences or meetings. Ocean Park determined its market segments by focusing on the needs of customers and keeping track of the buying process.
3.3 SWOT Analysis
The consideration of the strengths, weaknesses, opportunities and threats faced by a company determines the effectiveness of its understanding of consumers (Boone & Kurtz 1992). Ocean Park has a number of strengths that enables it to capture opportunities fuelled by the needs of customers. Ocean Park’s strength is its strong brand. Ocean Park developed a reputation for providing educational and entertaining activities tied to environmental conservation. Its integrative brand communication implies its ability to provide diverse activities and features for the different customers. Those preferring outdoor activities can opt for the sea or land theme while those preferring indoor activities can select from a number of leisure activities provided by Ocean Park. The activities also cater to individuals and groups enabling Ocean Park to target various considerations. Its strong brand finds expression in the diversity and variety of educational and entertainment offers for a wide market segment.
However, the weakness of Ocean Park is its degree of flexibility to changing market demand. Although, Ocean Park has made improvements as expressed through the introduction of various themes and features since 1994, there remains a wide room for improvement in this area of competence. This could be due to the non-profit structure of Ocean Park that limits its flexibility in responding to the competitive environment. The focus on public service could offset limited flexibility. Nevertheless, Ocean Park should build on flexibility to ensure sustainability through the ability to address changing needs in a timely manner. Another weakness is poor inter-linkages across the organisation to facilitate the sharing of feedback on customer needs not only directly from customers but also from the perspectives of employees based on their interaction with customers. Internal feedback on customer is weak.
The opportunity open to Ocean Park is to achieve global competitiveness by further developing its activities and features to include global themes and having animals from the different regions. It can also engage in tourism activities such as diving and fishing or rock climbing and camping. This would allow Ocean Park to gain an even greater domestic market as well as international market, by introducing Ocean Park as an alternative educational and recreational park and a must see attraction in visiting Hong Kong.
The threat faced by Ocean Park comes from the strong competition compounded by the fast pace of change in the preferences and needs of consumers. With the limited flexibility of Ocean Park, it could face problems in meeting needs in a timely manner. By the time activities are introduced, market tastes could have changed already.
3.4 Product Life Cycle
The product life cycle of Ocean Park coincides with the period that a new attraction can retain customer’s interest before the need for a new attraction or improvements in existing activities. Product life cycle pertains to the progression or sequence that a product goes through relative to shifts in the marketing conditions that affects the marketing strategies. The product life cycle commences with the introduction stage followed by the growth and maturity stages before concluding with the decline stage. The decline stage does not necessarily mean scrapping or replacement of products but that at the decline stage the marketability of products could reach a level of stability below its maturity stage. (Gorchels 2000) Ocean Park undergoes various product life cycles for various activities and attractions. The pace of the product life cycle and preparation for strategic solutions largely depends on Ocean Park’s accurate reading of market changes. Based on the timeline of the introduction of new features at Ocean Park, the period usually spans one to two years, with the exception of the new redevelopment plan that is due for completion in 2012 but introduction of change would occur gradually.
During the introduction stage, Ocean Park considers new demands in developing new activities and attractions. Since the market continuously demands for new exciting and unique attractions, Ocean Park innovates on new activities based on popular trends as well as unique or never before seen attractions at the park. Pricing remains the same since the cost to visitors is the standard admission fee for children and adults. This works well since the addition of new attractions for the same admission fee represents an addition of value to the consumers. Promotion of the new attraction is a priority to draw the interest not only of new but also old visitors. By keeping pace with changing market needs, Ocean Park can achieve customer retention.
During the growth stage, Ocean Park considers market response to build the activity and attractions to increase visitors. Improvements in the quality of the activity and attractions depend on the initial feedback from visitors. Pricing remains the same since new activity and attractions form part of the bundling price. The promotional activity heightens together with the voluntary advertising from consumers pleased with the attraction.
At the maturity stage, Ocean Park seeks to maintain its market share as interest in the activities and attractions wanes. Alternative activities could also emerge especially from its Disneyland, its major competitor. Ocean Park further makes improvements as new feedback emerges and focuses promotion of product differentiation.
While Ocean Park seeks to extend the growth and maturity stages, it also prepares for the decline in visitors to an even and regular point. Ocean Park maintains the level of quality of the attraction, introduces minor improvements, and introduces another one.
Ocean Park depends largely on its understanding of market changes and its timely response. However, since limited flexibility is a weakness of Ocean Park, it needs to improve its flexibility in order to understand market changes and respond to these changes in a timely manner. Employing the various methods of market research enables Ocean Park to understand these market changes and decide on actions accordingly. It was important that the methods employed included feedback from customers and third parties on general market trends relative to leisure and recreation destinations.
3.5 Porter’s Five Forces
Consideration of the external forces affecting Ocean Park reflects the importance of understanding customers as a basis for strategy formulation. The five forces analysis considers the competitive environment of firms based on five influencing market forces. The results of the five forces analysis would determine the extent of effectiveness of the understanding of the company of its customers using market research methods. (Porter 1998)
One market force emerges from new entrants (Porter 1998). Entry of new entrants in the leisure and recreational sector where Ocean Park and Disneyland compete is low because of the large capital needed in establishing recreational attractions of this scale and size. As such, Ocean Park understands its market based on emerging needs relative to existing products and services offered by existing competitors, particularly Disneyland. The needs that Disneyland has yet to address, Ocean Park seeks to provide.
Another market force is buyers (Porter 1998). The impact of buyers on the business is strong because changing needs fuels the operation of Ocean Park. The negative attitude and behaviour of buyers towards the company almost caused the demise of Ocean Park during the time when alternatives and competitors emerged. The response of Ocean Park to include other attractions and implement the redevelopment plan reflects its understanding of the power of its consumers.
A third market force is suppliers (Porter 1998) comprised of companies from which Ocean Park obtains equipment and supplies needed in its daily operations. The influence of suppliers is moderate and varied since suppliers of common products are many so that strong competition lessens supplier power but with limited number of suppliers of specialised equipment, these have stronger influence on the company. Ocean Park’s consideration of the influence of suppliers and the concurrent impact on the marketing mix affecting customers reflects the importance of understanding market dynamics and the link between suppliers and customers. However, since Ocean Park operates under a non-profit organisation, there is a weaker link between the influence of suppliers towards the marketing mix since pricing is standard and changes only in case of strong economic influences such as inflation and economic downturns affecting its cost structure.
The last market force is the extent of rivalry (Porter 1998). The extent of rivalry in the sector where Ocean Park belongs is fierce. Although, there are only two major players, Ocean Park and Disneyland, the competition is strong because these target the same wide-ranging market. Ocean Park remains in the process of adjusting to the competitive environment since it has been operating without a competitor for a long period before the entry of Disneyland. Ocean Park greater focus on customer needs reflected through the application of diverse means of understanding slowly developed as Ocean Park realised the market pull of the entry of a strong competitor. Nevertheless, Ocean Park needs to enhance its competitive strategy if not to increase profit then to ensure sufficient revenue to support operations and to support customer retention.
4. Key Findings
Business firms should utilise the buying process to understand consumers through methods of gaining information on needs in order to support effective creation of marketing value (Porter 1998). Revenue and profitability from good performance due to an increase in market base fuels the need to understand consumers (Oliver 1997). However, an organisation with a different goal, regards understanding customer needs differently as in the case of Ocean Park. A statutory non-profit organisation runs the educational park. This means that it considers the importance of understanding customer needs in the context of obtaining respectable revenue, not to maximise profit, to keep Ocean Park running and to continue providing public service to consumers. The case of Ocean Park then provides a different context to the buying process since understanding customer needs apply to determine ways of improving the facility to retain customers and not to primarily to increase profit. On one hand, this perspective enables Ocean Park to concentrate on addressing emerging needs for purposes of continuing public service with customer retention. On the other hand, this view of considering customer needs also resulted to the limited flexibility of the organisation in keeping track of changes in the market and competitive environment to address the impact of these changes on the creation of market value. While Ocean Park gives regard for consumers, its activities create benefits but there are also downsides.
The benefits of Ocean Park’s perspective on the needs of customers resulting to the use of methods focusing on obtaining direct feedback from consumers offers benefits to Ocean Park in terms of the improvement to existing attractions and development of new activities. Using a customer feedback system through the information booths and information from external market research are effective in understand what Ocean Park visitors want to keep coming back. The implication of this benefit is on the ability of Ocean Park to identify areas for improvement and possible new activities and attractions that address customer needs. By understanding market needs, Ocean Park can introduce activities and service features providing additional value for visitors.
As a sales executive, achieving an understanding of the needs of consumers by using methods directly drawing customer feedback, supports not only the identification of effective strategies in drawing consumers to the food court. Customer feedback on limited eating space, slow table clearing service, and limited food options are important in determining areas for improvement in the food court. By implementing small operational changes or improvements and recommending major changes to management decision-makers makes work more efficient for me as a sales executive in achieving accurate results together with minimised mistakes.
The implication to the company is the accuracy in meeting customer needs. Understanding the needs of customers supports customer retention and ability to maximise the stages of growth and maturity to fully introduce and build the value of new activities and attractions. (Piercy 2002)
However, by focusing on feedback from customer service and external market trends, a number of downsides also occur. One downside is the limited consideration of customer perspectives by relying on customer service, random interviews, and external research data. Since the source of information is small-scale, information may only represent the perspectives of a small segment of the market. Not all people engage the customer service. Moreover, there are information booths in various locations but only less than ten percent of the four million visitors of Ocean Park every year visit the information booths. This means that there is still a wide room for improvement in the methods employed to understand customer needs.
Effective task fulfilment of a sales executive means the consideration of feedback on various areas for improvement. Drawing feedback on various sources provides a more accurate and complete picture of the problems or issues faced by consumers (Boone & Kurtz 1992) relative to the products and services of Ocean Park. In addition, more feedback supports effective major improvements instead of doing various small scale or minor improvements.
By expanding the methods in understanding customer needs, the company can implement more needs encompassing long-term improvements that reflect customer needs better (Kotler & Armstrong 2002), particularly improvements in existing and newly implementation activities.
Another downside is the non-minimisation of information on customers from the frontline to support strategic decisions on value creating activities. At the frontline level, exemplified by the work of a sales executive, observations also comprise important sources of customer information. Observations of employees including sales executives of customer needs through direct and indirect interaction with visitors comprise a good source of information on the needs of customers. However, with limited inter-linkages, the observations only support decisions and actions at the frontline operational level (Campbell, Evans & Stonehouse 2002). While these observations reach immediate supervisors for purposes of obtaining permission for actions, these observations do not necessarily reach top management as information to support strategic decision-making. One reason could be due to the hierarchical organisational structure and top-down decision making at Ocean Park.
As a sales executive, the impact of the lack of inter-linkages to maximise the importance of employee observations of customer needs, could lead to inconsistencies in perceived effective actions from the top and the frontline level. The result could be ineffective or non-responsive actions in furthering the interest of visitors of Ocean Park.
This comprises one explanation for the limited flexibility of Ocean Park in responding to changing customer needs. As such, the utilisation of diverse and encompassing methods of understanding customer needs is an importance consideration in accurately addressing these needs to create value for consumers.
5. Conclusion
A significant factor in business success is the ability to understand customer needs to develop means of captivating the market until the accomplishment of the last step in the buying cycle that translates into actual purchase and a positive experience. This gives rise to a number of issues. One issue is the selection and utilisation of methods in effectively understanding the market. Another is the manner of utilising information to develop effective strategies. Ocean Park recognises the importance of understanding changes in customer needs and implementing effective actions to influence customers until the completion of the buying cycle. Ocean Park utilises various means of data collection. Direct methods of drawing information from consumers include customer service feedback, direct interviews with limited number of visitors, and employee observations of customers. Indirect methods of understanding customer needs are external market reports. However, implementation of these methods varies. Direct methods of drawing information occur at the frontline level while the indirect method occurs at the top management level. These means of determining customer information were effective in providing the frontline level of Ocean Park with an understanding of customers for purposes of making improvements, positioning of the company, and working within a competitive environment. However, the utilisation of information is limited because of the lack of inter-linkages across different teams and between top management and frontline operations. Employee observations that should comprise valuable means of understanding customers do not always reach top management. This has strong implications on the effectiveness and efficiency of Ocean Park in creating value for consumers that address their needs.
6. Recommendations
Based on the problems emerging from the methods of understanding customer needs to develop ways of effectively influencing the buying process, there are a number of sound recommendations. One recommendation is for Ocean Park to utilise consciously various means of understanding customer needs at the organisational level and not just at the frontline level. While employee observations occur at the frontline level, linkages require establishment in order to translate these frontline observations into information supporting strategic decision-making. Sales executives report observations to supervisors who in turn relay information to the top. Improving communications to ensure fast transmission of information also helps in ensuring that decisions, relative to improvements in activities and attractions, emerge in a flexible and timely manner. Another is the implementation of timely changes in the marketing mix for the different activities and attractions, especially the aspects of product and promotions, based on market information. This is necessary for Ocean Park to keep up with the changing needs of consumers and operate within the competitive environment created by the entry of Disneyland in Hong Kong.
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