使用者:列寧格勒郊外的護林員/沙盒3

Jungle World Activity Centre (JWAC) is a thriving business that operates indoor activity centers for children aged 2-11 years. JWAC's unique jungle-themed environment and engaging activities have made it successful in providing enjoyable experiences for children. However, the COVID-19 pandemic had a significant impact on JWAC's operations and expansion plans. Now, with the lifting of restrictions, JWAC is looking to resume its growth strategy by opening a new activity center in the City of Sheffield.

In this article, I will discuss the importance of market research for JWAC in the current situation. I will also analyze the forecasted costs and revenues for JWAC's new Jungle World Activity Centre in the City of Sheffield. Additionally, I will explore various promotional methods that JWAC can employ for the new activity center and analyze the advantages and disadvantages of these different marketing approaches.

Market Research

Market research involves investigating consumer behavior, understanding economic trends, target markets, and gathering information about customers. It is conducted to validate and improve a company's business concept. Market research is particularly important for the current situation of JWAC. The company's profits and expansion plans have been significantly impacted by numerous restrictions imposed by the UK government in response to the COVID-19 pandemic, which are unprecedented factors not seen in decades. With the government now lifting all these restrictions, it is crucial, in an uncertain market environment, to have a comprehensive understanding of current consumer behavior before opening a new activity center.

Typically, market research can be divided into primary market research and secondary market research. Primary market research involves collecting original data from external sources or conducting surveys, interviews, observations, or experiments. It provides firsthand information directly from the target audience or market. Primary research is conducted in real-world settings, providing specific and accurate data. However, it can be expensive, time-consuming, and subjective. Secondary market research, on the other hand, involves analyzing existing data and information collected by others. This approach is cost-effective and time-saving, providing a broader perspective on the market. However, the data may not be tailored specifically to the company's needs, and there is a risk of outdated or biased information.

Market research can also be divided into qualitative market research and quantitative market research. Qualitative market research focuses on understanding individuals' attitudes, beliefs, and behaviors through non-numeric data. Quantitative market research involves collecting numerical data to answer research questions and make statistical inferences.

Both primary and secondary market research have their advantages and disadvantages. Primary research provides specific and firsthand insights but can be costly and time-consuming. Secondary research offers a broader perspective but may lack customization and currency. Personally, I believe that for JWAC, secondary market research is more worthwhile than primary research because it can save a lot of time and money while still providing quick access to accurate information. However, in general, it is crucial to combine different market research methods in practice and employ a combination of multiple research approaches. This approach is essential as it can enhance the accuracy of JWAC's market research and provide a more comprehensive understanding of JWAC's new activity center in Sheffield, thereby offering valuable support for decision-making.

Data processing and analysis

To calculate the average cost, average revenue, and profit, we can use the following formulas:

1. Average Cost:

   Average Cost = Total Costs / Number of Units

   Total Costs = Annual Variable Costs + Annual Fixed Costs

   Number of Units = Number of Visitors

   Total Costs = 51 + 120 = 171 (in thousands)

   Number of Visitors = 42,500

   Average Cost = 171 / 42,500 = 0.004 (in thousands)

2. Average Revenue:

   Average Revenue = Total Revenue / Number of Units

   Total Revenue = Annual Revenue

   Number of Visitors = 42,500

   Average Revenue = 255 / 42,500 = 0.006 (in thousands)

3. Profit:

   Profit = Total Revenue - Total Costs

   Total Revenue = Annual Revenue

   Total Costs = Annual Variable Costs + Annual Fixed Costs

   Total Revenue = 255 (in thousands)

   Total Costs = 51 + 120 = 171 (in thousands)

   Profit = 255 - 171 = 84 (in thousands)

Break-even Analysis:

To perform a break-even analysis, we need to calculate the break-even point, which is the number of units or visitors at which the company neither makes a profit nor incurs a loss.

Break-even Point = Fixed Costs / (Average Revenue - Average Cost)

Fixed Costs = 120 (in thousands)

Average Revenue = 0.006 (in thousands)

Average Cost = 0.004 (in thousands)

Break-even Point = 120 / (0.006 - 0.004) = 60,000 visitors

Return on Capital Employed (ROCE):

ROCE = (Profit / Capital Employed) * 100

Profit = 84 (in thousands)

Capital Employed = Start-up Capital

ROCE = (84 / 475) * 100 = 17.68%

Analysis and Usage

1. Average cost, average revenue, and profit: These metrics help JWAC understand the financial performance of their activity center. Average cost shows the average cost incurred per visitor, average revenue indicates the average revenue generated per visitor, and profit reflects the overall financial gain after deducting costs. Monitoring these figures helps JWAC evaluate their pricing strategy, cost efficiency, and overall profitability. According to data from money.co.uk, the median profit for SMEs in the UK in 2021 was approximately £11,000. SMEs in the property and business services, as well as the wholesale and retail sectors, had the highest average profit of around £13,000. However, the expected profit for JWAC's new activity center is significantly higher than this figure.
2. Break-even analysis: The break-even point indicates the number of visitors needed to cover all costs without making a profit or incurring a loss. It helps JWAC determine the minimum level of business activity required to remain financially stable. Understanding the break-even point assists in pricing decisions, resource allocation, and determining sales targets. The data we just processed shows that to cover all costs and start generating a profit, JWAC would need to attract at least 60,000 visitors.
3. Return on Capital Employed (ROCE): ROCE measures the profitability and efficiency of capital investments. It indicates the return generated on the capital employed in the business. JWAC aims for a 15% ROCE, and an ROCE of 17.68% suggests that the activity center is performing well and generating a satisfactory return on the invested capital. ROCE helps assess the success and effectiveness of each activity center, supporting decision-making regarding expansion plans and investment opportunities.

Promotion

According to Investopedia (2022), promotion encompasses a range of activities aimed at increasing awareness and promoting a product. Promotions play a crucial role in providing information, differentiating products, and generating higher revenue. For businesses, it is essential to inform consumers about new products, promote them, and persuade potential buyers, particularly during the introductory phase of the product life cycle (Byjus, 2023). Promotion is crucial for JWAC at the current stage because the consumer demand for JWAC's activity center has been significantly suppressed during the COVID-19 period, and this activity center is a brand new establishment. Therefore, JWAC needs to prioritize promotion efforts to enhance public awareness and stimulate consumer demand for its new activity center.

There are two categories of promotion known as "Above-the-line promotion" and "Below-the-line promotion."

Above-the-line promotion (ATL) encompasses broad advertising campaigns that target a wide audience across various platforms (FEEDOUGH, 2021). ATL communication channels, such as press, radio, television, billboards, cinema, and the World Wide Web, are used to establish brand presence and introduce products to customers (St. Andrew's school, 2023).

On the other hand, Below-the-line promotion (BTL) refers to advertising strategies that do not rely on traditional radio and television platforms (Investopedia, 2022). BTL tactics involve promoting products through alternative media channels.

If a business chooses to utilize above-the-line promotion, they may opt to place advertisements on the radio. This allows the advertisements to reach a wide audience during radio broadcasts. The advantage of this approach is its broad reach, exposing the advertisement to a large number of people. However, it may not be highly targeted, meaning that the audience may not necessarily consist of the business's target consumers. Alternatively, if below-the-line promotion is employed, the business could distribute coupons in front of supermarkets. Viewers who come across these coupons may be enticed to purchase the products featured. However, this approach has a more limited audience and narrower advertising coverage.

To enhance efficiency, companies should consider the scope of their advertising and its impact on their target audience when selecting the appropriate promotion method. Based on a preliminary review of the information, we have learned that JWAC's new project is an activity center primarily targeting children and their parents. In this case, ATL promotion through television advertising may be a more suitable approach. Consumers in this scenario are likely to be driven by their desire to seek entertainment and leisure activities at the center, with children as the largest consumer group. Children are more likely to discover JWAC's activity center through animated channels on television. Therefore, we believe that utilizing ATL promotion through television advertising would be a highly effective marketing strategy that JWAC should prioritize. However, in general, both ATL promotion and BTL promotion are highly suitable promotion strategies for JWAC, each with its own strengths and weaknesses. Therefore, we recommend that JWAC consider a combination of ATL and BTL approaches, with an emphasis on utilizing ATL marketing through television advertising when possible.

Conclusion

For JWAC, conducting market research is crucial at present as it helps in understanding the highly uncertain post-pandemic market. We recommend JWAC to primarily use secondary market research, but we also suggest combining various market research methods and their combinations.

Our data processing and analysis of the forecast costs and revenues of the proposed New Jungle World Activity Centre in the City of Sheffield indicate that the expected profit for JWAC's new activity center is significantly higher than the average profit level of SMEs in the UK. Furthermore, its Return on Capital Employed (ROCE) exceeds the threshold set by JWAC as a measure of the success of each activity center. This implies a satisfactory investment return for establishing the new activity center. Our break-even analysis indicates that JWAC needs to attract at least 60,000 visitors to generate a profit.

Promotion is crucial for JWAC as it helps to accelerate public acceptance and create consumer demand for the new activity center. We emphasize that ATL promotion through television advertising may be the best promotion method for JWAC. However, we also recommend JWAC to combine different promotion methods to form a promotional mix to help achieve the company's promotion objectives.