1.

Draw the PLC (Product Life Cycle) diagram

2. What is Commercial Recreation?

 Commercial recreation is the provision of leisure experiences with the intent of
making a profit.
3. Which factors need to be considered when starting a commercial recreation
business?
 A concept that meets a market need.
 A feasibility study to assess the concept, market demands, locations, management,
and financial aspects.
 Financing for the venture.
4. What are the indicators of each stage of the PLC (Product Life Cycle)?
 Introduction Stage (Promotion)
 Rapid-skimming strategy
 Slow-skimming strategy
 Rapid-penetration strategy
 Slow-penetration strategy
  Growth Stage
a. Improving service quality and adding new service features and service elements
b. Pursuing new target markets
c. Using new channels of distribution
d. Lower prices to attract more price-sensitive customers (related to mass tourism)
e. Shift some advertising emphasis away from building awareness to creating desire
and action
 Maturity Stage
a. Market-modification strategy
b. Product-modification strategy
c. Marketing-mix modification strategy: 8Ps: People, Place, Price, Product,
Partnership, Package, Promotion
d. Brand extension strategy
 Decline Stage
a. Reducing costs and milking the company
b. Selling off or getting out of the business
Ex:
5. What are the benefits of the PLC in starting our own commercial recreation
business?
 It helps you to forecast sales and plan for the future by understanding the market
trends, customer preferences and competitive environment for your product. From that,
you can reduce risk
6. What are the advantages and disadvantages of commercial recreation in starting
your own business?
Rewards/ Advantages in starting your own business
1. Personal satisfaction from providing a product/service that is well received.
2. Independence making your own decision.
3. Profits leading to a higher standard of living.
4. Power and influence proving one's ability.
5. Use of accumulated capital: making better use of your personal assets.
6. Application of skills and background: trying out your training and skills, which may be
blocked in other areas of employment.
7. Security: having the future of your employment in your own hands, rather than at the
discretion of others.
Risks/Disadvantages in starting your own business
1. Financial losses if the business fails.
2. Loss of friends and family when pressures of the business interfere with personal life.
3. Frustration and anguish when business conditions are beyond your control.
4. Spending much of your time and effort when constant demands are made on your time.
5. Compromising your personal values
6. Demands above expertise when you can't know everything, do you guess or trust
''experts" you may hire?
7. Growth dilemmas

7. When do we need a feasibility study?

A feasibility study provides a comprehensive (full) analysis to determine if a specific
project has potential for reaching its financial goals. Needed when:
1. The project may be a new product/service at an existing location
2. A move to a new location,
3. The creation of a new business.
8. What are the uncontrollable factors in marketing environment analysis for feasibility
study?
 Competitors, The economy, laws, the society, culture, government, technology,
population
9. How can we determine population characteristics?
- Primary Data: Interview Data, Observation, By culture analysis, Survey
- Secondary Data: Population Statistics: Books, website, article,…..
10. What are the six steps of potential analysis for a feasibility study?
1) Decide research questions (aims to solve problems)
2) Collect and analyze secondary information
3) Design primary research, data collection method, and forms
4) Design sample and collect primary information
5) Analyze and interpret primary information (Interview content analysis
(merging/ compare)
6) Draw conclusions and make recommendations
- Summary aims/Findings
- Academic Significant/Implication
- Practical significant (recommendation)
- Limitation
- Future directions
11. What are the 10 analysis for the feasibility study?
- 1. Marketing Environment Analysis
How will marketing environment and uncontrollable factors affect the
organization’s direction and success?
• Uncontrollable factors: Competitors, The economy, laws, the society, culture,
government, technology, population
- 2. Market Potential Analysis:
Is the potential market large enough?
6 STEPS:
1) Decide research questions
2) Collect and analyze secondary information
3) Design primary research, data collection method, and forms
4) Design sample and collect primary information
5) Analyze and interpret primary information
6) Draw conclusions and make recommendations
- 3. Primary Competitor Analysis

What are the main strengths and weakness of primary competitors?

*Studying competitors’ websites, advertising is the best place to start
*Observing business pattern and customer using the worksheet (figure 5.6)
- 4. Location and Community Analysis
How will the site and community contribute to success?
The community’s industrial and other employment base, population characteristics,
residential neighborhoods, transportation system, visitor attractions, events,
educational facilities, local media
- 5. Services Analysis
What services and facilities must be provided to match the needs of potential
customers?
*What are the organization’s strengths and weaknesses?
*What opportunities and problems do they present?
-6. Marketing Position and Plan Analysis
How can the new business carve a niche for itself in the potential market?
What are the keys to marketing the new business?
*What position (image) do we occupy in the minds of potential customers ?
*How effective is our marketing?
- 7. Pricing analysis: What prices are suitable for the new business? This question is
answered by considering the prices of competitors.
- 8. Income and Expense analysis: Operating expenses are costs incurred in running
the business such as labor, food, energy, administration, marketing, and
maintenance
- 9. Development Cost analysis:
Development cost include building construction, equipment, furniture, and fixtures,
professional fees, infrastructure, and contingencies
- 10. Analysis of return on investment and economic feasibility:
Using time-value and financial analysis technique
12. What are the Franchising merits?
1. Is a good way to get started in a business where most of the mistakes have
already been made and corrected by the franchisor.
2. Expansion is very rapid
3. Cheap way to expand.
13. What is the leisure paradox?
14. Why is the age group such as 55-64 years old significant for a commercial recreation
business?
55-64 years - the most likely to spend discretionary income for recreation and
tourism because
- they are in their peak earning years,
- have low or no mortgage (loan) payments, and
- have few or no children at home.
15. What is the theory of the zero-sum game?
One person's gain is equivalent to another's loss, so the net change in wealth or benefit is
zero. This is called theory of the zero sum.
16. What is the income effect?
Alternatively, an increase in income will also result in consumers having more
income and spending power. Therefore, they may demand more leisure. As income
increases, demand increases. This is called the income effect.
17. What are the five presuppositions for building Economic Theory?
1. The consumer is rational: that is, we assume that the consumer will make a
logical and expected decision given a particular scenario. In reality, however, people
do not always make expected or “logical” decisions and there are extremes.
2. All factors are constant: We assume that all variables will remain the same within
a period of time. Variables that may cause unpredictable changes such as social
unrest, dangerous weather are not factored
3. There is choice: people are able to choose from various other decision sets
available to them.
4. There is willingness and ability: Participants should be willing and able to make
their own respective choices. Such decisions should be voluntary and not compelled.
5. Resources are scares or limited
18. What factors affect the price elasticity of demand in a commercial recreation
business?
1. Necessity of good or service: Goods and services which are necessities generally
have a lower price elasticity of demand than goods which are luxuries.
2. Number of substitutes: Goods and services which are provided in conditions of
near monopoly tend to have inelastic demand, since the consumer cannot shop
elsewhere should the prices increase. Competition in a market makes demand
more elastic.
3. Addictiveness: Goods such as cigarettes which are addictive tend to have inelastic
demand.
4. Price and usefulness: Cheap and very useful goods and services tend to have
inelastic demand since an increase in a low price will have little impact on
consumers’ purchasing power.
5. Time period: Demand may tend to increase in the short time when consumers
may not be able to change their mind. However, with time, demand may go
down. E.g., when travelers make last minute plan to travel in a peak season of an
airline.
6. Consumer awareness: Greater awareness of alternatives may cause consumers to
demand less of a product/service. Greater awareness of benefits or value of
product/service may result in higher demand.