Market Analysis Summary
Laser Tag will be well located on Birch Road, a road that carries well over 30,000 vehicles per day. The College's average student between the ages of 18-20 will provide Laser Tag with one of its prime customers. These students have a steady income and are lacking in entertainment venues in the MyTown area.
Size of Market
According to the MyTown Chamber of Commerce and Industry, 114,996 people reside within 58 square miles of the Big Mall shopping center. Based on the 2000 Census averages, 25,000 of these residents are ages 10 to 25, the age range for the typical individual customers. The typical laser tag customer is a 15-year-old boy who visits the video games center twice a month. Spending $20 during each visit, this teenager, who serves as the primary target market, accounts for about 60% of the center’s video games income and 50% of its video game income. Other customers include: young male video game players spending $20 a month and accounting for about 10% of the center’s video game revenue; corporate event coordinators who will generate 10% of total video games and video game revenue in their team building visits; mothers of the 6,682 area youths who celebrate their 9th through 14th birthday each month, who contribute 20% of the center’s laser tag revenue and 10% of its video game revenue; and the 6,459 18 to 21-year-old male walk-in customer who will spend enough to account for 10% of the center’s video games revenue and 20% of its video game revenue. Drawing on a base of 25,000 residents aged 10 to 25, the center needs fewer than 4% of these potential patrons in order to produce excellent profits.
Laser tag Patron. While this plan identifies the laser tag customer as a typical 15-year-old, we know that younger people are the primary consumers of sports activities, including video games. There will be an aggressive plan to target the young adults between 16 to 20-years-old that are able to drive themselves to the facility. The MyTown community has an abundance of alcohol-related facilities that caters to the young students of the College. It is our belief that these young adults, and students would also become a typical laser tag patron.
6.1 Market Segmentation
Laser tag Patrons. Younger people are the primary consumers of sports activities, including laser tag. The typical customer is a 15-year-old boy who visits the laser tag center twice a month. This customer lives within 5 miles of the laser tag center, in a household with an income over $30,000 per year, and is driven to the site by his parents.
The teen spends $20 during each visit, which represents about 10% of the teen’s monthly disposable income. According to a survey conducted for the U.S. Bureau of Labor Statistics, American teenagers receive an average of $50 a week from their parents.
When the 15-year-old visits, he plays 2 laser tag games (at $5.75 each) and 17 video games (at 50 cents each), spending his entire $20.
This teenager, who serves as the primary target market, accounts for about 60% of the center’s laser tag income and 50% of its video game income. The remaining revenue is generated by a combination of video game patrons, party attendees, group participants, and the public (walk-ins).
Video Game Patron. The average video game patron, also 15 years old, visits the center 2 times per month, spending a total of $20 on 40 video game plays. This customer accounts for about 10% of video game revenue.
Party Patron. The typical party customer is a mother who reserves a birthday party room for her 10 year old son and 9 of his friends. The party attendees generate about 50% of the center’s laser tag revenue and 40% of its video game revenue. Other party prospects to be approached are people who are celebrating anniversaries, winning seasons, personal achievements, and other accomplishments.
Group Patron. The representative group patron is an event coordinator for a sales organization involved in team building. The members of this group account for nearly 10% of the center’s laser tag revenue and 10% of its video game revenue. Activity directors who are always looking for a site that provides their members with a place to meet and have fun will be regularly contacted. One of the key objectives of marketing to groups is to arrange group business during non-peak hours.
Public Patron. The usual walk-in is a 19 year old, who lives in an apartment with 2 roommates, who is taking advantage of a promotional coupon. These walk-ins generate about 10% of the center’s laser tag revenue and 20% of its video game revenue.
Each of these typical customers can be reached through marketing targeted at them. There are enough members of these market segments in MyTown to support the laser tag center.
6.2 Target Market Segment Strategy
Laser Tag will be promoted in such a way as to maximize the efficiency of its advertising dollar. Laser Tag provides customer-tracking software to monitor key demographics. This enables a more efficient targeting of the local market. The computerized tracking will enable management to generate mailing lists to its customer base or any part -- for example, customers who play an average of 6 or more times a month. Direct mail to these customers will prove to be extremely efficient revenue generators. Customer loyalty will be developed through Laser Tag’s unique Membership Programs. In addition to saving on daily rates, annual members get a membership card with a special coded button device containing a computer chip. The "button" gives them access to statistics on their personal performance history.
For hard-core "Zoneheads," Laser Tag has the elite, Role-Playing Membership with programmable buttons. These buttons entitle the player to special game enhancements and records a code name of their choice such as Ultraman, Nemesis, etc… Laser Tag will be promoted as a facility to host birthday parties, office parties and events for groups such as the Boy Scouts and Girl Scouts. It is anticipated that groups will reserve the party room for two hours at a time. This will include snacks (pizza and soft-drinks, for example) and a game in the "Zone." The management team has tentatively set the party room at a price of $ 10-15 per person, depending on the snacks and number of games to be played in the "Zone." Other aspects of promotion, including Grand Opening strategies and league play are discussed in detail in Chapter V.
6.3 Service Business Analysis
There are few entertainment venues that will compete for the same target market as Laser Tag. Among the entertainment choices for youths are 1 roller-skating rink, 3 bowling centers, 5 movie theaters, a water park, and an outdoor paintball park.
6.4 Competition and Buying Patterns
The closest laser tag facility to MyTown is LaserTrek, a 45 minute one way drive. Other facilities closest to MyTown are LaserQuest and LazerXtreme, close to a 1 hour travel time one way. The laser tag centers charge $7.00 a game. There is little to no competition from these laser tag companies, due to the price and distance of their facilities from MyTown.
None of the bowling centers or the skating rink attempts to deliver an exciting entertainment experience to their youthful customers. The facilities and staff alike have a "here it is, take it or leave it" attitude. Laser Tag will easily compete with these businesses, with both competition and video games. Teens will find the Laser Tag environment more enticing and the staff trained to serve them as guests entitled to expect and enjoy a good entertainment value.
The movie theaters are likely the strongest competition for the youth dollar, throughout the year. Films are more popular than ever since Hollywood has become more capable of segmenting and serving its movie-going markets. The typical 15-year old male customer of Laser Tag is interested in action, sci-fi, comedies, high school, and coming of age movies, but avoids the dramas, love stories, and adult themes. The current film production schedule seems to be putting 3 movies a month onto the MyTown theater screens that appeal to the 15-year old males. Two of the theaters offer a video game arcade, one of which has old machines while the other is small in size.
One Water Park provides an alternative choice during the summer months, but it is little competition for the night-time entertainment.
The Arena Paintball Park could be a competitor for laser tag, but the focus by this business is on adult players. The owners' market segments include present and former military personnel, along with avid gun enthusiasts. Few teens are seen at the Arena Paintball Park paintball events. It is an outdoor venue and business is dictated by the seasons. Another downfall to paintball is the fact that it stings when hit.
In the Hallowe'en season, a number of organizations offer haunted houses, as Laser Tag plans to do. Most of these facilities are temporary, makeshift presentations that appeal to a wide range of young people. The Laser Tag haunted house will incorporate the existing, professionally-built arena with its safe lighting, sound, fog, and special effects systems and continue to appeal to its primary male teen market. Parents can be assured that the Laser Tag "house" is safe and well maintained. The Big Mall shopping center location is also more convenient than most of the competing houses.