A new subsidiary of Ace Transportation Group (ATG), called Blue Mountain and Collingwood Adventure Tours (BMCAT), has a mission is to genuinely provide a high-quality product and an immersive group tour experience that will delight customers. The priority is to provide professionalism, and authenticity, while exceeding expectations and earning loyalty and trust.
The organization’s competitive advantage Blue Mountain and Collingwood Adventure Tours competitive advantage, is that it is the only overnight culinary wine and adventure/sightseeing tour operating in the immediate Blue Mountain/Collingwood area. With focus on a pre-defined segment, they have a clear understanding of their target market, effectively catering a curated service with their expertise and partnerships with high quality wineries, farms, and adventure operators.
In support of their mission of an interactive culinary getaway experience, the objective is to build brand recognition, while introducing ATG’s BMCAT’s new service. The aim is Aiming to build awareness around the product, in order to attract more customers outside the general area. Developing awareness of the brand will establish its presence in the minds of the target audience., getting the name out there to establish its presence.
Engagement Rate by Reach (ERR) = # of engagements ÷ # of impressions
The resultant factor will inform what amount of marketing effort is needed to increase audience interactions.
Market Overview and Situation Analysis
Current Marketing Situation
Ace Transportation is a group transportation solution providing safe and reliable luxury vehicles for special events, custom charters, airport transportation, corporate travel, and much more. Under new ownership, the company strives to be the first choice among weddings, planners, and those seeking adventure and culinary experiences.
With the introduction of BMCAT, ACE Transportation is developing a subsidiary tourism branch. As this is a new service, it is in the introductory phase of its life cycle and will be required to initially target the innovators, early adopters, and trendsetters searching out the unique experience with a tolerance for the imperfections that come with a new product (Sorger, 2012, p. 132).
As the Ontario population is evolving, tourism sees the pressure from generations X, Y and Z, with most money and demands coming from the millennial (Y) generation (aged 24 – 39 years old) (Sheivachman, 2017). According to the Culinary Tourism Alliance, travel enthusiasts are willing to pay the money for insider tips, immersive cooking classes, wine and agricultural experiences, as well as authentic cultural exchanges (2012).
The largest driver for creating multi-experience culinary tours is the greater demand the millennial generation has for unique one-of-a-kind experiences that involve a social aspect over that of previous generations. Using meals to connect, they are collaboratively moving away from foods filled with fat, sugar, and preservatives to healthier, organic, gluten-free, and vegan options. Wanting to experience as much as possible of the locale they are visiting involves eating local food to the destination (Mya, 2020).
Although Blue Mountain and Collingwood Adventure Tours (BMCAT) has a unique service in the market, there is heavy indirect competition in the region and in other regional tourism areas, particularly the Niagara region. Such competition includes beer buses and winery tours. However, there is a lack of evidence indicating the existence of other multi-day culinary experiences mixed with adventure and sightseeing tours. BMCAT has therefore found an opportunity that has been left unfulfilled in the market.
Further, there is a unique situation that has been presented by the COVID-19 pandemic, adding to the Canadian economy’s volatility. As a result, it is expected that there will be changing wants, needs, and spending patterns of the consumer market; however, there is an expected increase in domestic tourism as consumer confidence in foreign travel wains (Fabius et. al., 2020).
For the purpose of this report, BMCAT will not be considered a travel agent, but part of the tour operator industry. Table 1 summarizes BMCAT’s market.
Table 1. Market Description: Tour Operator
|NAICS Code / SIC Code||NAICS 561520 Tour Operators
SIC 4725 Tour Operators
|Customer Needs||Book unique multi-day farm-to-table, and multi-culinary, adventure and sightseeing experiences that cannot be booked individually by the consumer, with transportation provided between.|
According to statistics provided by the Ministry of Heritage, Sport, Tourism and Culture Industries, there were over 10.7 million Ontario resident visitors to the South Georgian Bay (SGB) region in 2017, accounting for 97.8% of visitors to the region. Ontario resident visitors spent a total of $432 million dollars on food and beverage (2018).
Table 2 identifies Ontario residential visitors to the region based on age demographics. As can be seen from the table, the millennial generation aged 25-34 and boomer generation aged 55+ both contribute a substantial number of visitors to the region.
Table 2. Market Size by Age Demographic
|Age (years)||Number of Visitors per year (Ontario Residents)||Percentage of Total Ontario Residential Visitors|
|18 – 24||978,171||9.2%|
|25 – 34||2,092,167||19.6%|
|35 – 44||1,610,056||15.0%|
|45 – 54||1,869,287||17.5%|
|55 – 64||2,018,939||18.9%|
|Average Age||47.3 years||–|
Market Trends (PEST Analysis)
Due to consumers becoming more educated and experienced travelers, there has been a move towards treating food and beverage as a necessary and routine part of travel to something that can be a fully experienced part of the destination (Agrilife Today, 2020)(MTC, 2011). Evidence is seen through the growth of wine tours that include a dinner and private cooking schools where visitors learn about food techniques and use the experience for relationship building (MTC, 2011). Through the movement of food and beverages into the mainstream of tourism, culinary tourism is an opportunity to grow as a primary attraction or add-on to other existing tourism activities (MTC, 2011).
A PESTLE analysis was completed and can be found in Appendix A at the end of this document. Key findings included:
Political: Reduction in permitted travel across borders and within the Province can have both a positive and negative impact. Border closures will push more travel hungry and restriction-tired tourists to explore their Provincial backyard. However, Provincial restrictions imposed on gathering sizes, physical distancing, and service industry closures can have a negative impact on operators being able to maintain survivability of their business.
Economic: An increasing middle class in Ontario means more disposable income for traveling. Weak Canadian dollar and uncertainty due to COVID restrict foreign travel and promote more local tourism experiences. (CITATION)
Sociocultural: Society is becoming more aware of the need to derive products from local sources, thereby being more environmentally conscious, becoming more educated on where our food comes from (CITATION). Tourists, especially millennials, want to eat food local to a community they are visiting, fully becoming immersed in the experience of the destination by way of food (CITATION).
As more baby boomers retire, potential access to midweek tourists.
Technological: Advances in technology allow more ease of booking travel and experiences without the need of a travel agent, on a hand held portable device (CITATION).
Legal: Legislative requirements on travel agents and tour operators can impact operations. COVID restrictions must be followed or risk being fined.
Environmental: Awareness of the need to cut carbon emissions. Group travel experiences with friends or strangers will leave less of a carbon footprint.
An analysis of the market forces acting on culinary tourism using Porter’s Five Forces Industry analysis framework is demonstrated in Table 3.
Table 3. Market Forces acting on Blue Mountain & Collingwood Adventure Tours
|Force||Level of Threat||Description|
|Threat of Entry||High||Existing competitors offering alternate tours and packages may alter packages to duplicate the BMCAT packages.|
|Intensity of Rivalry||High||Existing tour operator packages can be modified to duplicate BMCAT’s offerings. Reduced pricing in competitors packages can affect profits of BMCAT.|
|Pressure from Substitute Products||Medium||Existing and potential in-city events keeping tourists experiencing local events such as cooking classes and Taste of the Danforth.|
|Bargaining Power of Buyers||Medium||Planners and event organizers could negotiate lower prices based on repeat business.|
|Bargaining Power of Suppliers||Medium||Wineries, farms and adventure guides could be enticed to switch to providing services to the competition.|
SWOT Analysis – Blue Mountain and Collingwood Adventure Tours
The Canadian consumer behaviour amid COVID-19
The COVID-19 pandemic has impacted all aspects of business operations, including producers, retailers, and consumers. A study by EY Canada (2020) found that consumers 45 years of age have indicated that the most significant impact of the pandemic has been the financial effect on their family and the long-term outlook on their finances.. Older consumers make up a large percentage of the “cut deep” segment, with over 80 percent intentionally spending less and 60 percent buying only essential items. Of this group, 35 percent acknowledged that specific brands are not of significant value, considering price over brand name (EY Canada, 2020). Millennials and Generation Z consumers aged 18 to 44 make up the Hibernate and Spend segment (EY Canada, 2020). They spend 57 percent of their income on groceries, more than older generations, , 9 percent on clothing, and 29 percent on leisure (EY Canada, 2020). The EY study also found that 51 percent of Millennials and Generation Z considers buying products and services based on brand name of more importance..
According to Ernst and Young Consultancy (EY Canada), about 45 percent of Millennials and Generation Z are concerned about their finances, mainly due to the pandemic’s worldwide economic impact. Not only are they fearful of losing their source of income, they are worried about paying for premium goods and services at the end of the COVID-19 crisis (EY Canada, 2020). SIxty three (63) percent of the study respondents were aged 45 and above, about 42 percent of which acknowledged that they are most likely to pay higher premiums due to costs associated with the pandemic. Those below 45 admitted that they believe their spending habits would rebound after the pandemic has ended (EY Canada, 2020).
A study conducted by McKinsey and Company found that many Canadian consumers above the age of 45 will focus on value, convenience, and availability (Fabius, Kohli, Timelin, &Veranen, 2020). Further, they have found that COVID-19 has undoubtedly brought forth new shifts in consumer behavior and spending. Concerned with risks of exposure to the virus, especially in crowded shopping spaces, consumers above 45 have indicated they only shop for necessities. Over 53 percent will only shop for grocery necessities while 51 percent have admitted to shopping for non-necessities (Numerator, 2020). Both Generation Z and millennials have made drastic changes in their spending, with increased emphasis on minimal waste, purchasing only the necessities, and prudent spending (Fabius, Kohli, Timelin, &Veranen, 2020).
Segmentation and Targeting
Market Segmentation for a New Product Launch
With the emergent trend of authenticity, food has developed into an invaluable part of any tourism or vacation experience (Pollock, 2017). People are always seeking to have a good time with friends, family and colleagues and capture those tiny moments of how certain places and certain food made them feel. Pollock (2017) further suggests that culinary tourism is not just about eating food from different places. It is about indulging in and learning about food and drinks from different cultures’, their way of doing things, and the stories behind it all.
Statistics show that most leisure seeking travelers deem trying out different and unusual cuisines creates a far better vacation experience (Pollack, 2017). For a target market for the new ATG product, typical culinary tourism enthusiasts would mostly be older and affluent members of the society of ages 45-65 years (“Canada: Reaching the Consumer”, 2020). However, a second ideal target market exists. Millennials, aged 24-39, who are now driving the demand for unique experiences that immerse visitors in the culture or identity of the locale they are visiting (Mya, 2020). Both target segments are well educated, with disposable income, and either have small families of an average of two children, or are in single income no kids (SINKS), or double income no kids (DINKS) households. These households consist of working individuals and those who have worked, saved, and generated quite some amount of wealth and are seeking different adventurous ways to spend their money (“Canada: Reaching the Consumer”, 2020). Further statistics show that this group is expected to grow over the next decade, with the average culinary tourist spending twice what an average tourist spends.
Table 4. Segmentation Variables used to Identify Millenial and 55+ Target Segments
|Behavioural||· Seek new immersive experiences with friends. Learn about where our food comes from, how it is grown and made.
· Seek out authenticity and shareability when travelling (Oakes, n.d.).
|· Enjoy the wealth they have accumulated over a lifetime of work with relaxing experiences with friends and family during the week, on weekends and holidays and other special occasions.|
|PsychoCulinary||· Millennials are more interested in culinary tours than Michelin star restaurants (Wolf, 2017).||· Customers over 45 have strong brand loyalty (Restobiz, 2013).
|Psychographic||· Millennials are well educated and have a high preference for digital technology (Lawrence et al., 2019)||Could you please add to this part?|
|Geographic||Mainly located in the Greater Toronto Area||Mainly located in the Greater Toronto Area|
The above table identifies behavioural, psychoculinary, and psychographic variables to determine the characteristics of the target segments. Behavioural segmentation looks at purchasing behaviour, the benefits sought, and occasion and timing (Think Marketing, 2014). PsychoCulinary profiling is a method used by marketers to understand customers behaviour and develop strategies to segment food lovers (Wolf, 2017).ThePsychoCulinary segment the customers into 13 different types based on the food experiences and the cities they live in. Psychographic segmentation involves grouping people based on their values, attitudes, opinions, interests, and lifestyles (Think Marketing, 2014). According to Lawrence et al. (2019) millennials are well educated and have a high preference for digital technology. Approximately 1 in 4 of the millennials has a bachelor’s degree and about 20 percent of them are married. In addition, the older millennials earn a high of 48,000$ and the younger millennials earn about 25,000$ (Lawrence et al., 2019). Their income varies between average to high, allowing them to spend comfortably on products of their preference.
In the new culinary tour experience for ATG, our target market psychographically has a spirit of multiculturalism, diversity, and love for the environment, just like most Canadians (Think Marketing, 2014). They value the diversity brought about by the different immigrants welcomed to Canada, with the country allowing these diverse groups to maintain their way of life (Pollock, 2017). This is especially interesting for the new product as it will allow the target audience to enjoy a wide variety of food and drinks produced locally. Additionally, their love for the serenity that comes with the parks, open spaces, and nature are all relevant characteristics for the new product’s success. Psychographic segmentation can be used by (BMCAT) to identify how they can reach their target audience. According to Lawrence et al., 2019, millennials are unlike seniors they focus on the product’s value. Also, they prefer to use social media platforms and e-commerce for advertisements. Millennials are considered as heavy spenders and don’t mind spending on a product of their preference (Lawrence et al., 2019).
Could you please add some more to this part?
Table 5. Targeting Chart: Blue Mountain & Collingwood Adventure Tours
|Millennials (age 24 – 39)||~2,897,195 people|
|Seniors (age 55+)||4,129,185 people|
Product Description and Positioning Statement
ATG has introduced a new service under its new banner, Blue Mountain & Collingwood Adventure Tours (BMCAT). The service includes culinary tour getaways to different locales around the Collingwood and Blue Mountain region. Visitors will learn about and experience a variety of cuisines, products, and educational opportunities from a variety of producers, including farms and wineries. The following is the proposed position statement:
“For families, friends and individuals seeking to have enjoyable immersive experiences, Blue Mountain & Collingwood Adventure Tours offers uniquely curated culinary tour getaways that seek to make your weekends, special occasions, and vacations memorable. Unlike our competitors, we hand pick experiences that involve diverse producers and wineries with events that are not accessible to book by the public, placed in the beautiful backdrops of our parks, and open spaces.”
Table 6: Positioning Chart: Blue Mountain & Collingwood Adventure Tours
|Market Segment||Positioning Approach||Points of Difference||Points of Parity|
|Millennials (Age 24 – 39)|
|Seniors (Age 55+)|
Communication Channels and Go-to-Market Strategy
The most cost effective and efficient communication channels for the new product is via email and digital marketing (Reis, 2020).Statistics show that almost 22 million Canadians use the internet monthly (“Canada: Reaching the Consumer”, 2020). Advertising to the target audience through online interactive media, including partnering with influential media personalities, will ensure BMCAT will gain exposure to the target segments (“Canada: Reaching the Consumer”, 2020). Therefore, an efficient product launch plan would include the advertising of events via digital media that portrays to prospective customers what a BMCAT culinary and adventure experience would be.
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