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MARKETING AUDIT
Critical Success Factors1. Cost Reduction – A major factor for NUTS would be to increase profits and aid cash flow through attracting sponsorship (funds would be used to buy equipment) to reduce hire costs and ultimately improve the bottom line.2. Increase Awareness - The primary research showed that the market was willing to “buy NUTS’ product” but a large proportion of their intended target market were unaware of NUTS’ existence. (See figure 10)aihuau.com3. Creation of a strong brand identity - To create a uniform, instantly identifiable brand image with a clear message to enable consumers to regularly associate with the “product” and connect one show to another is crucial to both the short and long term success of NUTS.4. Closer links with consumers – NUTS currently has no vehicle for collecting feedback and gathering general information on consumer needs and wants in order to make more informed decisions on how to tailor the “product”. Currently NUTS’ product is hitting the right market however this is felt to be through intuition as opposed to any other method.5. Increased efficiency of promotional efforts – It is doubtful that NUTS will be able in the future to increase its promotional spend radically. It is therefore vital for their success that their promotional methods are tailored and aimed carefully at the intended recipients.6. Penetration of New Segments – NUTS will have to develop their existing segments as well as break through into other segments in the future. From the primary research it shows that there is a market yet to be developed and penetrated. Without changing the product NUTS has considerable mileage left within the University Communities in the Newcastle area.7. Continuation of Student Input – Without a doubt the key factor of NUTS’ success is the talent and dedication of its members. It is therefore critical that it can continue to attract students with the necessary skill and enthusiasm.8. Continuation of Support from Key Influencers – NUTS at the moment has some support from inpiduals who are able to lend their help, knowledge and expertise, it is vital that these people are maintained and cultivated.Critical Failure FactorsMany of the critical failure factors are the opposite of the critical success factors listed above. However, in addition the following factors are believed to be critical.1. Loss of Reputation – Word of mouth has been shown to be NUTS’ most effective means of promotion. It is vital therefore that they maintain their high standards of production. It has been proven that people are more likely to tell others of a bad experience rather than a good one. NUTS could easily loose its good reputation quickly.2. Alienation from Student Market – NUTS’ core market is students, therefore the management must at all times consider them when making any changes to the product. An example of which might be a price increase (students are a price sensitive market).Withdrawal of Goodwill, Funding or Support – NUTS must continue to maintain and cultivate the relationships it has with “key influencers”. For example, a change in relationship with the Union Society could result in the loss of “match funding” which is crucial to NUTS.Marketing Assumptions
Marketing environment: Based on attendance at cultural events (Figure E) research held by national statistics, it is clear that the plays and theatre market shows a stable development in the last 15 years, and we can assume the theatre market will still keep this trend in future.Customer: People, especially university students will still support NUTS during the next two to three years, since there is no indication that price will increase, or quality will decrease. There is little chance of entrance by powerful competitors. Marketing Communication: It can be assumed that branding and marketing will improve during the next three years, efforts will be made to improve advertising methods, increase sale force (promotional team) and building public relations etc.Competition: There will be no new entrants to the “student market” in the next few years. Due to significant time and investment required to build a competitive university society and it is also less profitable for a professional company to enter the student market.Summary of Marketing Audit In addition to the critical success / failure factors and the marketing assumptions listed above, the following analyses were carried out - A competitive analysis, analysis of Porter’s Five Forces and a listing of the marketing assumptions. Each analysis is covered in detail (appendices 1- 3). The salient points arising from these are :8226; NUTS operates in a relatively insular environment -i.e the university8226; The student population in the Newcastle area is growing8226; NUTS is limited by its lack of equipment and by having no permanent venue.8226; In the broad entertainment environment, competition is fierce (appendix 4).8226; The student market in which NUTS operate is price sensitive (figure 13) 8226; There is considerable ‘uniqueness’ of product which means there is a low threat of entry by competitors or substitutes.8226; NUTS not seen as a threat to the broader theatrics community.SWOT ANALYSIS OF NUTSFigure 8 – SWOT Analysis TableStrengths 1. Collaboration with university 2. Student talent 3. Inexpensive 4. Reputation for quality 5. Royal student market 6. Volunteer membership and management Weaknesses 1. Volunteer membership and management2. No permanent venue 3. Excessive hiring costs4. Funds5. Lack of university support6. Inefficient marketingOpportunities 1. Internet development2. Sponsorship3. Branding4. Segment penetration5. AugmentationThreats 1. Professional Theatre Societies2. Internal Politics/Funds3. Inconsistent Talent4. Lack of Flexibility5. Business acumenStrengths1. Collaboration with University : As one of the student societies, NUTS directly and indirectly cooperates with internal and external societies on campus. Firstly, from the point of view of internal collaboration; NUTS is supported by the Student Union of The University of Newcastle Upon Tyne .An example of this is that the union are allowing NUTS to use the basement at a discounted or sometimes free rate. Secondly, other societies within the university such as the university orchestra, the jazz band and the dance society also contribute occasionally to NUTS performances. Externally, NUTS has a close relationship with the University of Northumbria who have a drama department, which hires out equipment and facilities to NUTS at favourable rates. Northumbria University also has a large pool of potential consumers for NUTS.2. Student talent : For NUTS, the most significant strength is the student talent who are responsible for making its productions enthusiastic and innovative. Furthermore, all the actors are students who take part in the society voluntarily.3. Inexpensive : Unlike other theatres, NUTS do not have a large investment tied up in a venue or the retention of a full time staff and management team. The venues which NUTS uses are not furnished with the degree of luxury which might add to costs nor do they require the use of expensive lighting equipment. NUTS members do not receive any payment for their time, this is another substantial advantage.4. Reputation for quality : NUTS is renowned for its quality of production owing to its student talent. Student’s technical and creative skills have resulted in producing and presenting a professional performance beyond consumer expectations.5. Loyal student market : Loyalty in the student market is a key issue to NUTS. This arises out of a number of factors; the location of NUTS performances is suitable to NUTS; word of mouth around campus acts as an informal promotional tool; inpidual performers often pull in friends or colleagues to support them by attending performances. The student community feel a sense of ownership towards NUTS and therefore support it loyally.6. Volunteer membership and management : Firstly, NUTS has a large pool of student team members who change annually. This results in an injection of new skills for NUTS. Furthermore; it also helps to rethink the current practice of NUTS.Weaknesses1. Volunteer membership and management : Every sword has a double edge. As one of the student societies, it is difficult to structure and organize this society as a company owing to the following reasons: Firstly, the members of the management team are students who change annually. As a result, the management skills are hard to transfer from one year to the next. Secondly, the style of leadership may differ year by year. It is therefore difficult to form a core culture and value system for NUTS. Thirdly, it is unrealistic to guarantee that all areas of expertise are functioning efficiently. For example, the members of the management team sometimes cannot apply their knowledge to some specific areas; i.e. finance and accounting or branding. Finally, the members of the management team who join NUTS do so by virtue of their own interests, thus insufficient loyalty to NUTS can cause a co-operation problem.
2. No permanent venue : Most of the venues used for performances cannot be guaranteed to be used permanently. Different venues attract different fees that may result in a series of problems such as budget and cost forecasting becomes uncertain. What’s more, different venues may cause confusion with the audience regarding the brand.3. Excessive hiring costs : As we have witnessed NUTS’ facilities are inadequate in comparison to the standard of their productions. They are continually faced with the necessity to hire both sound and lighting equipment. This erodes the potential for any profit to be made and prevents NUTS from being able to “get their head above water”.4. Funds : Although there are four sources (tickets, membership, match funding and occasional sponsorship) of funds for NUTS, the funds are still insufficient to meet the needs of the operation and create an adequate profit. This is largely due to the high costs mentioned earlier. 5. Lack of university support : Although some support exists which has been built up through relationships, consistent and formal support from the university is lacking which is concerning the management team of NUTS.6. Inefficient marketing : NUTS are not guaranteed to have formal marketing ability within the management team due to the transient nature of membership. Until this year there was no central advertising and marketing system in place. Marketing is treated on an ad-hoc basis with no formal plans or guidelines are present to provide continuity.Opportunities1. Internet development : Until now, NUTS has not utilized its web-based resources effectively. As the society develops, the internet will become a more valuable resource and will offer NUTS a raft of opportunities such as: provision of information to a wider audience, the possibility of on-line ticket sales at some point in the future.2. Sponsorship : Sponsorship is a clear opportunity that NUTS are missing. Many companies would be interested in associating themselves charitably with a student society. Many companies would also be keen to promote their products to such a targeted market. There are enormous opportunities for NUTS to align itself with a company in return for sponsorship. Money brought in from sponsorship could be used to fund ownership of lighting and sound equipment, which would boost the society’s profit earnings considerably.3. Branding : Currently, the awareness of NUTS among students is still very low. Consistent branding would help build up a strong brand identity. A Branding strategy would also help to introduce a large number of potential customers.4. Segment penetration : It is NUTS’ intention to encourage more outside audiences to watch its performances. A segment development strategy will help NUTS to involve in new markets. Firstly, NUTS should adopt a marketing strategy at Northumbria University to attract more students to watch its performances. There are 14500 students who study at Northumbria, thus the potential student market at Northumbria University is huge. Following successful development of the Northumbria market, NUTS should proceed to develop and penetrate other university markets including post graduate and international students as well as university staff. 5. Augmentation : Augmentation will give NUTS the opportunity to improve its profits while offering an enhanced experience to its consumers. It is important for NUTS to understand that the performance is just one part of the total “Package”. The production of NUTS should not only focus on performance. NUTS have the potential to control bar sales and can possibly introduce souvenirs using its established brand. Threats1. Professional Theatre Societies : NUTS is facing fierce competition from other theatre societies. From the perceptual map of theatres (figure 16) , we can clearly see that NUTS’ products are high quality with fairly low price. However, there are 3 to 4 theatres which act as the first competitors to NUTS, such as Buddle Arts Centre, The Customs House, Peoples Theatre . 2. Internal politics and funds : As one of the student societies, NUTS are restricted by the internal politics to some extent - such as the venues for performance for example the union basement is not allowed to be used by NUTS on a permanent basis.3. No guarantee of forthcoming student talent : Although the unique selling point of NUTS is student talent, no one can guarantee the consistency of student talent, as all the actors are students who join in voluntarily. Unlike other professional theatre society, NUTS has no guaranteed continuity of talent, this could limit them in terms of quality and variety of future performances.4. Lack of marketing understanding : As there is limited information regarding the market (no marketing research has been conducted) there is no solid foundation upon which to formulate a marketing strategy. Resultantly any strategy put in place is based largely on assumptions as apposed to facts.5. Lack of Flexibility : The membership of NUTS is voluntary, their other commitments place restrictions on what hey are able and not able to do i.e they cannot do matinee performances as they are committed to classes (this precludes schools), they are also limited to short production runs due to the burden of their student work.6. Lack of business acumen : Owing to the fact that the NUTS management team are largely composed of undergraduates they naturally have a limited understanding of business in the ‘real’ environment, therefore they have no standards to benchmark against or past experience to draw upon.
