Marketing Analysis – Wing and a prayer 1.
Critical issue/Challenge Identification Current Marketing Strategy Marketing Mix: Product -Bungee jumping (2 types of jump) service -Wing and a prayer t-shirts -Baseball caps -Personalized Video -Colorful posters Place -Western Fair in London -Ontario -Zurich Bean Festival Promotion -Sound System (hip hop, dance, and house, rap music) to build crowd -Banners and Souvenirs -Attract people who are passing by their tent Price $65 for first jump $55 for second jump $10-20 for shirts and baseball cap $4-6 for posters $25 for personalized videoTarget Market: -Thrill-seeking male aged 18-25 -People who want to experience adrenaline rush and excitement -Usually middle to upper class and has the money to spend for fun activities 2. Alternatives/Analysis Critical issues on Wing and a prayer a. Start the business to earn money for University in fall b. Stefan and Zach have no experience in starting a business which involved big investment c.
Safety issues in the Wing and A prayer business A. Start the business to earn money for University in fall PROS -They can return to school if they earn the money If they are successful with the business, they will have extra income to continue the business for the next summer -It can be a business experience for them and also to see if the activity can earn a profit CONS -Stefan and Zach may fail their first business -No money to get back to school B. Stefan and Zach have no experience in starting a business which involved big investment PROS -They can learn from their mistakes -Opportunity to see if the business works or if it will make a profit -Wing and a prayer may be successful as it is new in the market -The business may have a huge income if it turns out to be successfulCONS -The business has a huge chance of failure -They will not be able to go back to school -A big risk since there is a big investment involved in starting the business -If the business fail, it will be hard for both of them to get back the money they use to start the business C.
Safety issues in the Wing and A prayer business PROS -Both of them will follow the rule and code of conduct in the business -Stephan has a certain rules for their business which is good for a starting business CONS -As a new business, people might not trust them in this type of activity which may cause accidents or death Bungee jumping may not attract most of people because it is dangerous 3. Recommendations/Implementation Plan Stefan and Zach should start the Wing and a Prayer business as soon as possible to earn money for University. Although they lack business skills and experience, both of them are well experience in the bungee jumping activity. Stefan and Zach can take a short course or ask for business consultants to guide them in starting up their business. SWOT Analysis for Wing and a Prayer Appendix I SWOT Analysis for Wing and A prayer Strengths: The business will only run during the summer so Stefan and Zach can take advantage of this opportunity -Both of them are experience in bungee jumping activity where Stefan jumped 150 times while Zach jumped 40 times -The days of operation will be during summer where both of them can stop school and earn money for the next term -Stefan took a training course and worked for two and a half months in the amusement park Weaknesses: -Big investment for two students without business experience or skills -There is no enough income or budget to start of the new business Opportunities: Only few people are doing bungee jumping activity as a business so there will a big opportunity for them Threats: -Safety issues (negative) on the activity -There are no other activities offered only bungee jumping Appendix II Break even analysis for Wing and a Prayer Assumptions: There will be 60 days (good weather) of operation of 110 days and the business will operate 10 hours per day. There will be an average of 70 jumps per day, 20 videos, 25 t-shirts and 20 posters sold. Gross income: 70 jumps $4,200. 00 20 videos$750.
00 25 t-shirts$375. 00 20 posters$100. 00Total (per day)$5,425. 00 Total (60 days)$325,500. 00 Cost: Jump Platforms$1,000. 00 Harness$2,250. 00 Crane rent and Operator for 60 days$84,000. 00 Staff per hour (2 staffs) for 60 days$9,600.
00 Cloth banners$700. 00 Tables, Chairs, Walkie Takie and Sound system$1,700. 00 Inflatable pad$12,000. 00 License and permit$310. 00 Ministry engineer$400.
00 Physical inspection$200. 00 Cord different sizes: 10×300 = 3,000. 00 10×500 = 5,000. 00 10×1000 = 10,000. 00$18,000. 00 Camcorder$1,800. 00 1000 posters TOTAL:$800. 00 $132,760.
00 Fees: First jump$65. 00 Second jump$55. 0 T-shirt$10-20. 00 Video$25. 00 Posters$4-6. 00 Therefore, break-even point will be on the 25th day of business operation or after 1,750 jumps where they will earn $135,625.
00. On the 26th day of operation, they will start to earn their net income which will add up to $189,875. 00 after 60 days which is equivalent to 2,450 jumps. Since Stephan and Zach plans to split their profit in two, both of them will receive $94,937. 50.
This amount of money will be more than enough to return to University for the fall semester even if they are planning to use the money they loan.