Faculty of Business
Pricing and Revenue Management Assignment
By Gary Anderson (10543546), Robert Baker (10630426),
Angela Chan (11080456), Fred Duarte (10796086), Mary Levy (10803928)
Prepared for Dr Christine Ebling
Due Date: 27th May 2010
CASE REPORT FOR TARONGA ZOO
By Anderson Baker Chan Duarte Levy Associates (ABCDL)
1.Taronga’s Zoo’s Strategy1
1.1Strategic Approach & Price Position1
2.Current Analysis of Taronga Zoo’s Market2
2.1Willingness to pay2
2.2Consumer Behaviour and Current Pricing2
3.Pricing Decision and Future Pricing Recommendations4
3.1Pricing for Families4
3.2Pricing for Couples4
3.3Increasing Repeat Visitation4
3.4Managing Flow of Visitors5
4.Implementation and 4P’s6
Taronga’s Zoo’s Strategy
Our vision is to inspire Australians and our visitors to discover, explore, delight in and protect our natural world” Taronga Zoo Vision Statement (Clements 2009, pg4)
1.2 Strategic Approach & Price Position
Secondary research was used to establish Taronga Zoos competitors (Appendix 1), and their pricing versus Taronga Zoo, this provided an initial indication of Taronga Zoo’s price positioning in the market as a premium priced visitor attraction (Appendix 2). This was confirmed through primary research, in the form of an online questionnaire (Appendix 3 & 4). Refer to (Appendix 5) for key conclusions from this research.
The design of Taronga Zoo’s marketing mix also reflects a premium position: 1. Outstanding product with extensive service and offerings. Although they have not made many changes with the animal exhibits they have innovated with items such as the twilight walk and roar and snore (Appendix 6). 2. Taronga Zoo’s price is constantly high versus their competitors and they generally have minimal special offers. 3. Exclusive Distribution: Only two locations, Mosman/Dubbo; limited ticket distribution channels, the website (via Ticketek), Taronga Zoo, Circular Quay Ferries and Captain Cook Cruises. 4. Heavy investment in their communication strategy with a targeted media selection. Taronga Zoo spent $88 million in 2009 on media covering a combination of television (82%), print (17%) and radio (1%) (Appendix 7).
A SWOT analysis of the current price positions raised the following key points (Appendix 8): * Strengths: Established premium price positioning; strong price segmentation; and an on-line pre-pay option. * Weaknesses: Lack of repeat visitation; lack of yield management; and lack of value communication; lack of price discrimination. * Opportunities: Repeat visitation pricing incentives; price bundling; and off-peak pricing. * Threats: Competitor pricing; and competitor discounts.
Current Analysis of Taronga Zoo’s Market
1.2 Willingness to pay
Actual willingness to pay (WTP) may be different to the hypothetical WTP when customers visit the Zoo with their families. A price premium is a privilege given to products that are capable of providing useful benefits for consumers. When consumers find those benefits valuable, the level of their acceptance of the price for the product becomes higher (Shirai 2010, pg 184). This holds true for Taronga Zoo as primary research shows they have a premium price and hold a high perceived value which forms a competitive advantage.
Consumer Behaviour and Current Pricing
Target segments have been based on the origin of visitors taken from the 2009 Annual Report (Appendix 9). When considering price perception it is important to separate these segments.
Sydney Residents (51%)
Cain and Meritt Jr. noted that surveys for metropolitan Zoos and Aquariums, showed that families with children were the most likely to visit Zoos (2006, p.7.).Taronga’s local marketing and primary research, supports that families and visitors with children form a core target...