Birmingham Barge Trips

MARKETING PLAN

Samrawit Alemseged | 303 MKT | 2ND December

 Content
1) Audit 2

1.1 Business Purpose

1.2 Vision
1.3 External Analysis 2
1.4 Porters 5 forces 3
1.5 Internal Analysis 4
1.6 SWOT 5

2) Aims and Objectives

7
2.1 Ansoffs Matric 7
2.2 Smart Objectives 8
2.3 How We Will Achieve Objectives 8

3) Strategy
10
3.1 STP 10

4) Marketing Mix
11
5) Implementation and Control
13
5.1 Gant Chart 14

PAGE 1
 Audit
Business Purpose
To provide the West Midlands residents and tourists with tours of Birmingham
using their canal waters.

Vision
To expand the business further.

External Analysis
Political/Legal factors

The fall of the Pound, due to the UK leaving the EU has affected he market. In
bound tourists (residents of Birmingham) are considering overseas trips to be too
expensive. The implication of this is that the UK attracts over sears customers,
which means the UK is increasing in tourist businesses as they are 4th most
popular destination for international visitors.
In this industry it is a requirement to obtain standard licences to operate in this
industry, these licences cover the duration of 8 months in the year, but due to the
size and reputation of BBT, David has been able to obtain a licence that covers a
duration of 12 months which is a competitive advantage.
Economic

Many people have moved to Birmingham from London due to high living
expenses. Disposable income has increased within the last 4 years, which could
mean that West Midlands customers are more likely to spend money on luxury
goods/services (boat rides) however this could also lead to an increase in the
overseas trips and a fall in demand for BBT.
Social

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 Boat trips in the UK are declining but there is a trend for increased on-board
dining as it has the potential to produce more profit than the traditional boat trips
and could be a considerable market to take advantage of.
Economical

Frequent boat trips can lead to harming the environment by causing pollution and
damaging the coral reefs.

Porters 5 Forces Model

Threat of New Entry

There are high entry barriers such as the start-up cost of entering this market.
BBT has spent 150,000 to buy and fit out a single boat. There are also
unavoidable running costs such as fuel, licences, insurance and mooring fees. This
means that this market is not an easy market to enter as it has many requirements.
However the surrounding canal systems have provided significant opportunities
for smaller canal barges such as Canal Gourmet which operates with a single boat,
showing that there is potential for new entrants, as it is a new entrant in the on-
board dining market.
Supplier Power

Suppliers of BBT could be considered to be whole food sellers as well as

companies that provide fuel. Supplier power is low, as BBT have a considerable
amount of options in terms of who they will resource from.
Competitive Rivalry

The high level of competition that BBT is faced with is Birmingham Boaters and
Canal Gourmet. Birmingham Boaters is of particular threat as they are offering a
similar service but have reduced their prices. Canal Gourmet is also a threat as
they are leaders in the on-board dining market that BBT is venturing in to.
Buyer Power

In this market, there are a fair number of competitors as well as substitute services
available to the buyers. Due to buyers having greater choice as there is more than
one business available to them, they have high power. However this is only true
during the 8 months of the standard licence, but because of BBTs competitive
advantage of being able to negotiate for a yearly licence, the buyer power is
relatively low during the 4 months that the competition doesnt operate in, these
are also holiday seasons such as Christmas for example.

Threat of substitution

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 There are 2 alternatives of substitute services available to the customers. The first
alternative is the hiring of narrow boats, which is a market that BBT do not
operate in and what differentiates BBTs service from this is the fact that they
provide crew members (caterers and cleaners).

The second substitute service would be the overseas boat trip market (which is
also growing) which is available to customers of the UK as a premium alternative,
but this alternative is not much of a threat because due to the EU referendum there
has been a drop in over seas trips as it has become less attractive for UK
residents. This gives BBT an advantage as inbound tourists will find their service
to fit their needs better.

Internal Analysis

Price

There is not a particular strategy that BBT uses here, however competitor
Birmingham Boaters who acquire 3 boats, have cut down their prices.
Product

Birmingham Barges Trip operates in the tourist cruises market, using passenger
narrow boats. They are in possession of two 40ft boats and four 70ft boats.
Their cruises take their customers around Birmingham and offer a catering service
with entertainment such as dancing and other less sober activities for their
younger target market.
Also the have recently entered the on-board dining market, and have one boat
fitted out to be an on-board dining restaurant.
In this case the product here would be the food.
Place

BBT is based in the heart of Birmingham city centre, which means that they are
close to tourist landing points such as Birmingham airport and the main train
station.
Promotion

The company does very little to promote itself, but requires free promotion from
Birmingham City Council.
People

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 Birmingham Barge Trips currently has over 30 employees working alongside 20
temporary staff. The business has roles such as crew members, caterers and
cleaners. An advantage the business has is that their permanent employees have a
close relationship with their customers, which helps to increase loyalty and retain
customer. However a weakness in this area is in the level of training of the
employees as they are underqualified.
Investing in training the staff is a wise idea, but in terms of training the temporary
staff, who work during the holidays it is not an effective strategy.
Process

In order to experience the Birmingham Barges Trip, the process of purchasing a

ticket is an online service. This is makes the service tangible as tickets are sold
through a website, which helps to reassure customers of the service that is being
provided. This process is in place and benefits the company by minimising costs.
There are also opportunities for BBT to become more effective in this process by
selling tickets through third parties and partnerships.

SWOT Analysis
Strength

Largest operator in Birmingham

Trained and well qualified staff
Relationship with the bank manager
Relationship with the council to be able to negotiate a longer licence
Services such as on-board dining from the floating restaurant already successful
and profitable and also other services such as tourist cruises.
Holds a strong balance sheet as BBT has significant assets of the barges as they
own several amount of boats. (Two 40ft boats and four 70ft boats).
Weaknesses

There is not much data of customer needs.

Staff are less well qualified and disciplined
BBT doesnt promote itself affectively.

Opportunities

There are more opportunities for smaller canal barges

BBT is based in the immediate area of Birmingham City, this is near to the
midlands Canal Network which gives access to popular tourist attractions such as
Cadbury World, The Black Country Museum and Merry Hill.

PAGE 5
 The Bank manager has confidence that BBT will be successful and because of this
is prepared to lend BBT a substantial amount of money, which will give BBT the
opportunity to expand the business.
Threats

There have been complaints that have been made by canal side home owners
about the level of noise that is made by Canal Gourmet, who are in the on-board
dining market, which is a relatively new market that BBT has stepped in to, but is
doing quite well.
The increase of waterside properties has led to the increase of prices of moorings.
A price war with Birmingham Boaters as they have reduced their prices, and
being in competition with Canal Gourmet, which is also a successful floating
restaurant operating on the canal that offers dinner dances on a 40ft Single boat,
and is fully booked every Tuesday and Thursday evenings.

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 Aims and Objectives
Ansoffs Matrix
Market Penetration

Tourist cruises market

Keep a good relationship with the council to keep yearly license
Provide staff with training, and only hire permanent staff
Beat competitor pricing
Product Development

Introducing on-board dining to residents of the West Midlands who are existing
customers
Bank managers loan to purchase new boats, designed to be floating restaurants.
Market Development

Tourist cruises market

There is access to London and Manchester canals
Needs to exploit longer trips with an overnight stay
Diversification

Educational trips
Schools
West Midlands Residents

PAGE 7
Smart Objectives
Specific

To purchase another boat and fit that out to become another successful floating
restaurant.
Measureable

Success will be recorded by looking at revenue and costs, to price the restaurants
profitability (as BBT already have 1 floating restaurant that has already become
profitable within the first year).
Achievable

This objective will be achieved through the bank managers substantial loan, that
will help to cover the costs of purchases of new boats, that will be built for an on-
board dining experience and will cover the on-going costs of things like; fuel,
licenses.
Realistic

This objective is realistic because BBT has already dived in to this market which
means that they are already experienced in how to open and run a floating
restaurant. With this industry growing much faster than standard tours, there is a
greater chance that BBT will be profitable. The competitive rivalry in this market
also seems to be quite low, as Canal Gourmet seems to be the only floating
restaurant and in comparison to BBT, will not be able to compete with its size.
Time

The objective is to open and run another successful floating restaurant,

considering that BBT already has one that has become profitable in the first year
running. This is a two year market plan and considering the fact that it took 1 year
to open and run a profitable floating restaurant, this is an indication of the time it
will take BBT to be successful in this industry.

How We Will Achieve Objectives

Current Position

PAGE 8
 Birmingham Barges current position is in the tourist cruises market,
providing their local residents with short boat trips around Birmingham
canals. This Market has become extremely competitive and profits
have been falling. BBT have been successful over the last 4-5 years
operating heart of Midlands Canal Network

Aspired Position

BBT can achieve its vision to expand the business further and be a
leading service that provides in the market within the next two years
by opening another floating restaurant using the bank managers loan
as this will cover the start-up of the business and on-going costs. This
will achieved by exploiting the use of promotional activity and creating
partnerships with local tourist attractions in the centre of Birmingham.

Potential Position

To get to a leading position in the market BBTs main focus areas

should be on customer needs. As staffing is an important consideration
for narrow boat owners, hiring additional staff within the first six
months of the two year plan would be necessary to ensure that there is
permanent staffing. The benefit to this is that it will help to build
customer relationships through creating trust.

BBT have the opportunity to take a loan out to invest further in

opening another floating restaurant, this gives them advantage over
competitor Canal Gourmet as they have the ability to become
monopolistic. Tactics that would be useful to the company would be
competitive pricing and making sure that the standard of the food is
very high.

PAGE 9
 Strategy
Segmentation
Segment A- is made up of local families, who reside in the West Midlands and
may have moved from locations that a quite pricy e.g. London. These people have
more disposable income to enjoy luxury trips and want to eat great food within
destination venues for leisure at an affordable price. These families will want
family friendly packages that will make it safe and easy to travel with their young
ones.

Segment B- Are businesses in the local area of Birmingham, who want more
exotic party venues to hold events such as Christmas parties for work colleagues.
This is an advantage that BBT has over Canal Gourmet as their license will allow
them to operate during this holiday period.

Segment C- Local students, within Birmingham, who are legal to drink alcohol
and may be students of local Colleges and Universities. These students will want
less sober activities that are affordable and cheap.

Targeting

The most attractive market segment that will contribute to the size and potential
growth of BBT is segment C. Universities are a large organisation which doesnt
make it a niche market that is too small to target.

PAGE 10
Positioning

Key
High Importance (Size)
Birmingham Barge
Trips

Birmingham
Low High Boaters
performanc Performance
Expectations Canal Gourmet
e
Expectatio
ns

Low Importance (Size)

Figure 1 is an indication of where BBT needs to be positioned in-order to stand

apart from its competitors. Birmingham Barges has high importance due to the
size of its assets as it holds more boats than its competitors. However there have
been rumours regarding the trips and the floating restaurant and how it is not very
good. Local business also felt that BBT does not understand the standard of image
and services that are expected by them.
Birmingham Barges only has two main threatening competitors; Birmingham
Boaters and Canal Gourmet. Through this two year plan BBTs main focus needs
to be on the customers journey and this can be conducted through identifying and
anticipating needs and wants better than the competition and also more profitably.

Marketing Mix

PAGE 11
Marketing Mix
Product

A floating restaurant (catering service)

Student nights (serving alcohol beverages, also during the day with a happy hour
deal for students).
Price

The floating restaurant needs to be competitive in pricing with Canal Gourmet,

who is also offering a similar service.
Student nights can happen once BBT has partnered with student union, this
relationship will help to attract a wider range of customers. However there will be
potential safety risks that will need to be considered such as first aid training the
crew members.

Place

The city of Birmingham will be a good place to reside as it is local to

where the target market is.

Promotion

Online website is a current promotional strategy that the company already

use, by creating a partnership with student union, BBT will be able to gain
promotion from large organisations such as universities, which can give
them access to a wider range of customers.

People

Staff will need training and there will only be full time staff members in
order to build a strong relationship with students.

Process

The process of how BBT should conduct their service should be flawless.
The floating restaurant would need to follow food and safety regulations
and acquire a minimum level 2 certificate.
Purchases of tickets to student night events can also be made through
event organisers within the student union

PAGE 12
Physical Evidence

Reviews of other customers previous experiences will be located on the

BBT website and also on their own social media page (Twitter) by
retweeting experiences and what is being said.

Implementation & Control

Having access to a substantial amount of money that will be provided by
the bank manager will assist in the purchase of new boats and also cover
the on-going costs.
Also the current assets that BBT own such as the 6 boats that were bought
for 150,000 would have value, but depending on how long they have had
them for, they would have depreciated in value.
It will take 2 years to implement this plan, due to the level of requirements
that it takes to operate within this industry.
Acquiring skills will help to improve internal processes and
customer perception which will end up improving financial
results.

PAGE 13
Gant Chart

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