Market research
Discuss about the Business plan for Sports Tourism Service: Website for Ticket Booking and Merchandized Accessories.
The market of soccer in Singapore is quite big. The International Champions Cup attracts not only the local visitors, but also the international visitors, especially from the South East Asian countries. In 2014, the sports industry of Singapore had generated about $80 billion, which grew around 7% annually (Stb.gov.sg., 2018). In 2017, it became around $90 billion, which was driven mainly by the football industry. In Singapore, the revenue from nonevent sports market is much greater apart from that in Europe and the USA. The licensed sporting goods and accounts for almost 57% of the revenue while others generate almost 28% (sbr.com.sg, 2015). Singapore has become a sports hub and football and Grand Prix have contributed majorly in this. The lining up of international sports events, including International Champions Cup, aimed to generate about $145 billion in 2016 which helped to boost the tourism market too (stb.gov.sg, 2018).
International Champions Cup draws millions of visitors to Singapore every year. Fans of the football clubs start buying their tickets quite early to avoid the rush and high price at the last moment. However, there is only one website till date that offered the option for online ticket booking, that is, StubHub Singapore. TicketPool will provide another platform for online ticket booking as well as accessories with a logo of International Champions Cup for the local as well as global soccer fans. In the first year, the website will provide the opportunity of availing additional discounts for the early purchases of tickets.
Research shows that, the football fans in Singapore are quite attracted to the merchandized products of the football clubs (Heng & Meng, 2018). Production and supply of these products contribute a substantial amount of revenue in the economy. The supply chain and distribution network also gets benefitted from that. Hence, it is expected that, TicketPool will benefit from selling the merchandized products.
There is very less competition for TicketPool in Singapore. Previously, only Stubhub used to sell the tickets for International Champions Cup. Whenever, there is rush and huge demand for tickets, the website crashed. TicketPool will share the pressure of the market demand for the tickets of the tournament. Similar to Stubhub, it will also provide the option of selling extra tickets if the customers want. Apart from that, Stubhub do not sell merchandized products of the clubs online. Hence, TicketPool is providing the opportunity of availing the merchandized products and accessories at a fair price, with local and global delivery option, which is expected to gain popularity among the football fans. The company will focus on earning reputation through high and efficient quality service and product.
Segmentation and targeting
To launch the business, TicketPool has done market research and applied the segmentation and targeting to enter the market. Segmentation refers to the process of dividing the potential consumer market into different segments, based on certain characteristics (Liu et al., 2018). In case of the potential market for TicketPool, the customers are segmented on the basis of age, income status and their preferences. The age has three categories, 18-30 years, 31-45 years and 46 years and up. The groups are chosen such because, people within these age groups can travel along and can go to watch a football match and also be interested in buying the souvenir products. Secondly, people under income status groups are categorized into the groups of income less than $35000, $35000-$50000, $51000-$75000 and $75000-$1000000. This indicates that, students as well as salaried people are capable of buying the tickets and the products for International Champions Cup. Apart from these, the segmentation will also include location, spending behavior and preferences for the merchandized products.
As a part of the targeting strategy, TicketPool will put different pricing of the tickets for different groups. The students will get additional discounts upon providing their student id number and name of the colleges or universities. The payment options are made easier and convenient with all types of card payments, third party payment and net banking payments options. The merchandised products will be priced at a reasonable rate to increase the sales and profit. There will be shipping charge for the products ordered if the price is below a certain amount.
The marketing strategy will be implemented through various advertising channels in the print and digital media and through the search engines. Since, people will be buying the tickets and the accessories from the website and through mobile apps, floating the advertisements through the search engine will be more noticeable and bring more impact. The software team will be responsible for creating an attractive website with user friendly navigation. The quality assurance team will ensure that the products delivered have the best quality attainable at a reasonable price. Customer service team will work on handling the customer calls regarding tickets and diverting the calls and complaints regarding the returns, exchange and refund status to the suppliers. The overall finance will be handled by the finance department.
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Key Partners · International Champions Cup, Singapore authority · Technology partners for creating websites · Suppliers of tickets and the products · Courier services for delivery of the products · Meta search engines, like Google · Third party payment partners, like, Visa, Master and Maestro. |
Key Activities · Arranging tickets for the matches of International Champions Cup in Singapore · Supplying merchandised products · Shipping the products to the customers address |
Value Proposition For customers: · Easy availability of tickets · Easy ship merchandized accessories · Convenient options for buying · Customer service For suppliers: · Global reach for the products · Incremental sales and profits · Increase in market size |
Customer Relationships · Commission for the suppliers · Customer service for the buyers · Convenient payment and return service |
Customer Segments Customers: · Age group · Income status · Location · Spending behavior · Preferences for products Suppliers: · Quality of products · Price · Shipping conditions · Returns and exchange · Refund policy |
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Key Resources · Tech savvy and efficient employees · Attractive website · Great quality accessory products · Global network |
Channels · Website · Mobile app · Partner channels · Ad channels in the search engine |
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ost Structure Operational: · Advertising: $75,000 · Sales and marketing: $30,000 · Product procurement cost: $70,000 · Property and equipment: $15,000 · Intangible assets: $10,000 |
Revenue Streams · Ticket sales · Accessory sales · Sponsorships · Commissions from payment agents |
The proposed management and production structure of TicketPool are presented below. The management structure includes all the managerial positions of the company, to be existing in TicketPool. In the production structure, the teams addressing the production planning and control operations are presented. Since, the website will offer services to the customers, the production planning and control teams will look after the production and delivery of services.
Marketing strategy
The following table exhibits the values of particulars in the income and expenditure sections that determine the profitability of the company in next three years from set up.
|
Particulars (Values in Singapore Dollar) |
Year 1 |
Year 2 |
Year 3 |
|
Inflation Rate |
2.50% |
2.50% |
|
|
Sales Growth Rate |
10% |
10% |
|
|
Sales Volume |
40000 |
44000 |
48400 |
|
Selling Price Per Unit |
$3,500 |
$3,588 |
$3,677 |
|
Total Sales Revenue |
$140,000,000 |
$157,850,000 |
$177,975,875 |
|
Cost of Good Sold per unit: |
|||
|
Raw Material Consumed |
($500) |
($513) |
($525) |
|
Direct Labor Cost |
($100) |
($103) |
($105) |
|
Total Cost of Goods Sold per unit |
($600) |
($615) |
($630) |
|
Total Cost of Goods Sold |
($24,000,000) |
($27,060,000) |
($30,510,150) |
|
GROSS PROFIT |
$116,000,000 |
$130,790,000 |
$147,465,725 |
|
Variable Manufacturing Overhead per unit |
($15) |
($15) |
($16) |
|
Total Variable Manufacturing Overhead |
($600,000) |
($676,500) |
($762,754) |
|
Depreciation on Property, Plant & Equipment |
($2,100) |
($2,100) |
($2,100) |
|
Total Manufacturing Overhead |
($602,100) |
($678,600) |
($764,854) |
|
General Administrative Expenses: |
|||
|
Depreciation on Furniture & Fixtures |
($1,000) |
($900) |
($810) |
|
Depreciation on Computer Equipment |
$0 |
$0 |
$0 |
|
Amortization of Patent |
$0 |
$0 |
$0 |
|
Amortization of Trademark |
($150,000) |
($150,000) |
($150,000) |
|
Insurance |
($12,000) |
($12,300) |
($12,608) |
|
Rates & Taxes |
($6,500) |
($6,663) |
($6,829) |
|
Salary of Office Staffs |
($100,000) |
($102,500) |
($105,063) |
|
Cleaning Charges |
($5,000) |
($5,125) |
($5,253) |
|
Electricity for Office |
($15,000) |
($15,375) |
($15,759) |
|
Telephone & Internet |
($8,000) |
($8,200) |
($8,405) |
|
Total General Administrative Expenses |
($297,500) |
($301,063) |
($304,727) |
|
Selling & Marketing Expenses: |
|||
|
Depreciation on Motor Vehicle |
$0 |
$0 |
$0 |
|
Salary of Marketing Staffs |
($150,000) |
($153,750) |
($157,594) |
|
Sales Commissions @0.5% on Sales |
($700,000) |
($789,250) |
($889,879) |
|
Travelling charges @0.25% on Sales |
($350,000) |
($394,625) |
($444,940) |
|
Total Selling & Marketing Expenses |
($1,200,000) |
($1,337,625) |
($1,492,413) |
|
Net Operating Profit/(Loss) |
$113,900,400 |
$128,472,713 |
$144,903,732 |
|
Interest Expenses: |
|||
|
Interest on Bond |
($27,154) |
($27,154) |
($27,154) |
|
Interest on Loan From Bank |
($24,568) |
($24,568) |
($24,568) |
|
Total Interest Expenses |
($51,722) |
($51,722) |
($51,722) |
|
Net Profit before Tax |
$113,848,678 |
$128,420,991 |
$144,852,010 |
|
Income Tax Expenses |
($34,154,603) |
($38,526,297) |
($43,455,603) |
|
Net Profit after Tax |
$79,694,075 |
$89,894,693 |
$101,396,407 |
Table 1: Income and expenditure statement and forecast of TicketPool
(Source: Author)
|
Particulars |
Year 1 |
Year 2 |
Year 3 |
|
Inflation Rate |
2.50% |
2.50% |
|
|
Sales Growth Rate |
10% |
10% |
|
|
Sales Volume |
40000 |
44000 |
48400 |
|
Selling Price Per Unit |
$3,500 |
$3,588 |
$3,677 |
|
Total Sales Revenue |
$140,000,000 |
$157,850,000 |
$177,975,875 |
Table 2: Sales forecast for TicketPool
(Source: Author)
The company aims for a 10% growth in the consecutive three years. Profitability will increase from lack of competition, reinvestment of profit and quality of products and services delivered.
Conclusion
The business plan aims to highlight the profitability of a new website in Singapore, TicketPool. The website will be launched to provide the ticket booking service for the International Champions Cup and also to offer various merchandized accessories of the international football clubs. The company has evaluated the market opportunity of less competition in this particular section of the sports tourism industry. Millions of tourists come to Singapore every year to experience the international football tournament. The visitor arrival contributes a significant amount in the revenue of the economy. It is seen that, there is not only high demand for tickets but also for the merchandized products among the local and international visitors. However, there was only one website, StubHub Singapore that delivers the service of ticket booking and selling for the matches. Hence, TicketPool will explore this opportunity of lack of competition in the market and will try to capture the market with discount offers on the tickets and merchandized products at a reasonable price. The customers can buy all the things online and TicketPool will deliver those at their addresses. The football market is huge in Singapore and TicketPool will take that advantage for establishing and growing their business. Income expenditure statements and sales forecast for the next three years are shown in the plan that exhibits that the company has a projected growth of 10%. Over the years, after the company achieves substantial growth, it plans to include other national and international sports events to be held in Singapore also into their portfolio.
References
Heng, L., & Meng, W. (2018). Singapore sport: A growing market for sports agents. The Straits Times. Retrieved 4 April 2018, from https://www.straitstimes.com/sport/a-growing-market-for-sports-agents
Internationalchampionscup.com. (2018). International Champions Cup | Singapore. Internationalchampionscup.com. Retrieved 4 April 2018, from https://www.internationalchampionscup.com/territories/sg
Liu, J., Liao, X., Huang, W., & Liao, X. (2018). Market segmentation: A multiple criteria approach combining preference analysis and segmentation decision. Omega.
sbr.com.sg. (2015). What is the future of the sports business in Singapore?. Singapore Business Review. Retrieved 4 April 2018, from https://sbr.com.sg/leisure-entertainment/exclusive/what-future-sports-business-in-singapore
statista.com. (2018). Sports & Outdoor – Singapore | Statista Market Forecast. Statista. Retrieved 4 April 2018, from https://www.statista.com/outlook/259/124/sports-outdoor/singapore#
stb.gov.sg. (2018). Sporting events showcase Singapore as a well-rounded, active, and exciting tourism destination.. Singapore Tourism Board. Retrieved 4 April 2018, from https://www.stb.gov.sg/industries/sports
Stb.gov.sg. (2018). Statistics & Market Insights Overview. Stb.gov.sg. Retrieved 4 April 2018, from https://www.stb.gov.sg/statistics-and-market-insights
stubhub.sg. (2018). StubHub Singapore. Retrieved 4 April 2018, from https://www.stubhub.sg/
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