Sammy's Family Entertainment Center

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Miniature Golf Course Business Plan

Market Analysis Summary

There are over 150,000 people living within a 15-mile radius of the Firefly County site. One of the interesting facts about the miniature golf business is the breadth of the customer base. While families with children may act as an anchor, seniors, teens, and corporate customers add significant income. A variety of fun promotions keeps the business profitable during the entire season. While our marketing plan is devised from other successful plans in the industry, there will be some additions as we start the business. Mulligan-Bogey Leisure Builders includes a marketing plan with course completion. This plan includes input from over 200 course owners and shows the most successful marketing programs being implemented across the country.

Customers will appreciate Sammy's because of the high value to cost ratio our services provide. There is nowhere else in our area where a customer can enjoy an hour, or more, of entertainment for only $5. When the customer considers the high quality of the facility, the friendly staff and the variety of entertainment available, Sammy's will be the first choice for individual, family, or group entertainment.

4.1 Market Segmentation

Our market segmentation scheme is fairly straightforward. The Miniature Golf Club of America and the Association of Fun and Relaxation both have excellent market research and have highlighted the following target audiences:

Individuals: There are over 150,000 people living within 15 miles of our location in Firefly County. The typical customer ranges in age from six to fifty-four, with family income over $20,900.[1] This large swath of society provides a broad customer base in Firefly County.

Families with young children enjoy the outings. Miniature golf is one of the few activities teenagers find acceptable to do with parents. This is demonstrated in research, which shows that children 5 to 18 years old, with at least one adult, represent the largest single audience at 36.9%.[2]

Teens and young adults, age 15 to 24, will make outings a date or group event. We note here that teens fit into two separate market segments. They may enjoy an outing as part of a family unit or independently as part of a peer group.

Adults, age 25 to 54, find the recreation enjoyable, with or without children or grandchildren.

Seniors, age 55 to 74, find the gentle form of recreation refreshing, whether alone or with grandchildren.

Private groups using FECs range from children's birthday parties to family get togethers.

Organizations using the centers may be church groups, civic organizations, office get togethers, customer appreciation events, or corporate parties.

While the prime time for individual customers is evening and weekend, the wide group customer base allows Sammy's to schedule daytime and weekday hours for maximum facility utilization.

Understanding and satisfying the customers' needs are the key elements to a successful operation. The business goal is three-fold:

  1. Get the customer in the door
  2. Keep them entertained
  3. Get them to come back![3]

___________________________________________________________

[1] Telephone conversation, Sam Tix, President of the "Miniature Golf Club of America"

[2] Association of Fun and Relaxation  2002 annual report

[3] Association of Fun and Relaxation  2002 annual report

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Ages 5 to 14 1% 24,501 24,783 25,068 25,356 25,648 1.15%
Ages 15 to 19 1% 15,525 15,704 15,884 16,067 16,252 1.15%
Ages 20 to 24 1% 16,851 17,045 17,241 17,439 17,640 1.15%
Ages 25 to 34 1% 22,795 23,057 23,322 23,591 23,862 1.15%
Ages 35 to 44 1% 25,918 26,216 26,518 26,822 27,131 1.15%
Ages 45 to 54 1% 25,889 26,187 26,488 26,792 27,101 1.15%
Ages 55 to 74 1% 27,119 27,431 27,746 28,065 28,388 1.15%
Total 1.15% 158,598 160,422 162,267 164,133 166,020 1.15%

4.2 Target Market Segment Strategy

The Family Entertainment Industry has been enjoying significant growth in the last decade. Along with this growth has come research to assist the industry in further development. The markets listed below are proven segments, across the nation, for FECs to target in their marketing efforts.

A. Individuals

Families with young children enjoy outings. As the children mature, miniature golf is one of the few activities teenagers find acceptable to do with parents.[1] This is demonstrated in research, which shows that children 5 to 18 years old, with at least one adult, represent the largest market segment (36.9%) attending FECs.[2]

Teens and young adults will make the outing a date. FECs have proven popular with college age students. The proximity of Southeast State University and Firefly Community College make this segment particularly attractive. While many state college students travel home for the summer, the community college students live, or stay in the area.

Adults and seniors find the gentle form of recreation enjoyable, with or without children or grandchildren.

B. Groups

Private groups using FECs include:

  • Birthday parties
  • Family get togethers

Organizations using FECs include:

  • Church groups
  • Civic organizations
  • Office get togethers
  • Customer appreciation events
  • Corporate parties
  • Group fundraisers

Group events are particularly desirable because:

  • A large group of customers can be scheduled for off-peak hours
  • Parties breed other parties as guests decide they want to book a similar event
  • These are low cost, high profit events, that require little or no additional staffing

___________________________________________________________

[1] Telephone conversation, Sam Tix, President of the "Miniature Golf Club of America"

[2] Association of Fun and Relaxation 2002 annual report

4.3 Service Business Analysis

Family Entertainment, or Fun Centers (FEC) are defined by the Association of Fun and Relaxation (AFAR) as, "unique community-based recreation/entertainment destinations with family appeal and a reliance on repeat customers for their success." A facility is considered an FEC if it contains three or more of the following elements as major attractions: miniature golf, batting cages, bumper boats/cars, go karts, rides, coin operated games, and soft modular play areas. After nearly a decade of  exponential growth, Family Entertainment Centers are still a growing segment of the amusement industry.

In a survey conducted for the 2002 AFAR Annual Report, 89% of respondents reported increased business revenues as the new century began. In the same survey, respondents indicated 73% of customers spent over $10 per person.

Family Entertainment Centers are successful in communities with populations as small as 40,000. Profitable FECs also exist in smaller communities with adequate trade areas.

4.3.1 Competition and Buying Patterns

Direct competition for identical facilities is not found in our service area. While there are competitive miniature golf courses in Wedgeville, Mashie Woods, Cleek, and St. Andrews, they are all well outside Sammy's service area.

There are direct competitors in the immediate area for some components of Sammy's.

  • There is a video arcade in the Mall. This established facility is frequently busy with children whose parents are shopping in the mall. Other customers are junior and senior high school children who are there with friends, just "hanging out". This competing arcade has the disadvantage of being a one-dimensional facility. They cannot offer birthday parties, miniature golf, or anything but arcade games.
  • There is a miniature golf course on Hwy 20 just outside Niblick City. This facility is not conducive to children because the main attraction is a Par 3 golf course with a bar in the clubhouse. The course does not offer birthday parties or other complimentary attractions.

The fact that there are not serious direct competitors in Firefly County does not mean Sammy's will not compete with other established recreation and amusement activities for the consumer's business. Sammy's will target marketing efforts at indirect competition, such as:

  • Movie theaters
  • Bowling alleys
  • Roller skating rinks
  • Cape Speedway racetrack
  • University sporting events
  • Par 3 golf course
  • Video arcade

Sammy's also recognizes the indirect competition from local restaurants.

Sammy's realizes that there is competition for the customer's dollar. As the local economy worsens with the recent closure of more mills in the local area, lower income families will watch their spending carefully. Although this is an area of concern, it is also an area where Sammy's low cost will be appealing to the consumer.

While many industries experienced downturns during 2001, 66% of FEC owners experienced steady, or growing, revenues. It is important to note that 24% of respondents to the national survey were not open for a full year before the survey. Only 11% reported declining revenues. To further support the validity of the FEC industry in economic downturns, it is noted that 73% of customers spent over $10 per person in 2001. This is a big jump over previous years where only 43% of customers had this level of spending. During good times FECs do well. During hard economic times families redirect scarce recreational resources to these low cost type of activities and FECs do even better.

History has proven there are two types of businesses that thrive in depressed economic times. These two categories of businesses are alcohol and family entertainment. As far back as the depression of the early 30s, the family entertainment industry has performed well in prosperous times and in economic downturns.