Contemporary Canadian Marketing Cases 5th Edition Solution by H.F. (Herb) MacKenzie – Test Bank

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MacKenzie, Contemporary Canadian Marketing Cases, Fifth Edition

Teaching Notes

Case 5: The Writers at Woody Point Festival

Case Overview

This case illustrates the growth challenges experienced by the Writers at Woody Point Festival in Woody

Point, Newfoundland. Since its inception in 2004, the festival had grown significantly in terms of box

office sales and memberships. Reading and musical events sell out within hours after the tickets go on

sale in May, almost 15 weeks before the start of the festival. As a result, in 2010 the festival expanded

from a four-day to a five-day event. While additional reading shows had been scheduled concurrently

with other reading shows, the demand was still higher than the supply, as the additional shows also sold

out quickly, leaving out large numbers of potential festival visitors without tickets.

Stephen Brunt and the board felt that it was time for the festival to adopt a formal marketing strategy that

could provide long-term economic sustainability for Woody Point and the other nearby communities. The

marketing strategy had to evaluate the festival’s customer base and recommend new revenue streams and

customer segments. Apart from the brochures, community announcements, website, and word-of-mouth

advertising, the Writers at Woody Point Festival did not have a marketing plan. This marketing plan had

to re-evaluate current product, pricing, distribution, and promotion strategies.

Courses and Learning Objectives

The Writers at Woody Point Festival case is suitable for Introduction to Marketing, Marketing

Management, and Marketing Strategy courses at the undergraduate or graduate level. It may also be used

in general management courses to discuss issues associated with tourism, cultural tourism, sustainable

economic development, and social business.

The objectives of the case are to encourage students:

• To explain the characteristics of literary festivals and the role of these festivals in providing local

economic development and tourism revenue for small communities;

• To understand the nature of these festivals as social enterprises and the challenges they face to

create a sustainable business;

• To do a SWOT analysis of the festival;

• To assess the customer base of the festival and propose new customer segments;

• To do a competitive analysis of other literary festivals;

• To suggest new revenue streams for the organization;

• To propose a marketing strategy;

• To review the current marketing mix and develop a marketing plan.

Research Methods

This case is based on field research. Additional information was gathered through database searches of

publicly available documents. The marketing plan format used in the assignment questions and answers

section is based on a modified version of the template outlined in Armstrong, Kotler, Cunningham,

Mitchell, and Buchwitz, 2007 Marketing: An Introduction (2nd edition). Instructors can also use marketing

plan outlines found in other textbooks.

i h dMacKenzie, Contemporary Canadian Marketing Cases, Fifth Edition

Teaching Notes

Assignment Questions and Answers

Suggested assignment questions are listed below. Instructors may also want to develop their own

questions to suit the objectives of the course.

1. Prepare a SWOT analysis.

2. Prepare a competitive analysis of what other festivals have been doing to generate a revenue

stream.

3. Evaluate the festival’s customer base and suggest a marketing strategy.

4. Develop a marketing plan for the Writers at Woody Point Festival.

Answers

1. Prepare a SWOT analysis.

Strengths

• The Writers at Woody Point Festival creates economic development for Woody Point and nearby

communities in the Gros Morne National Parks (GMNP) area

• Board of directors are committed to the success of the festival

• Since 2004, the festival has grown significantly in terms of sales and memberships [students

should generate histogram tables, see Exhibits 1 and 2.]

• Tickets for the shows are sold out in early May, 15 weeks before the start of the festival in mid-

August

• Literary and music shows have proved popular

• Gary Noel and a network of community volunteers assist in the running of the festival

• Festival is able to attract sponsorship funds and government grants

• Customer base consist of adults, over age 40 and baby boomers, over age 55 who are interested in

literature, culture, and the arts

• Addition of folk, jazz, and traditional Newfoundland music concerts attracts younger customers,

age 18 to 35

• The festival has developed partnerships with other festivals in the GMNP area, such as Gros

Morne Summer Music Festival, Trails, Tales & Tunes Festival, and the Theatre Newfoundland

and Labrador youth programs

• As a non-profit organization, the festival has been generating financial surpluses

i h dMacKenzie, Contemporary Canadian Marketing Cases, Fifth Edition

Teaching Notes

Exhibit 1. Box Office Sales from 2004–2010

Exhibit 2. Membership

Fees from 2004–2010

\

i h dMacKenzie, Contemporary Canadian Marketing Cases, Fifth Edition

Teaching Notes

Weakness

• Heritage Theatre has limited capacity

• Festival has a reputation that it is difficult to get tickets

• Tickets are sold only through telephone

• Revenue streams mainly generated through literary and music shows

• Festival lacks formal marketing strategy and marketing plan

• Board unaware of how other literary festivals generate revenue streams

Opportunities

• Festival can expand by adding more literary shows to the program. For example, assuming 160

paid customers @ $20/person (+10 volunteers in the building), one show generates approximately

$3,200. Adding a third show on Thursday and Fridays and one more on Saturday, translates into

an extra $9,600 in sales

• Inclusion of more music concerts that attract a different customer segment (age 18-35). Concerts

are held at the Heritage Theatre. Adding an extra concert generates additional $3,200 per show

• Explore holding new literary events or music shows in other venues such as at the Royal

Canadian Legion building, the local high school, outdoors, and boat reading tours

• Explore holding literary events throughout the summer as a way to smoothing the demand

• Introduce new events such as comedy shows, films, art, and multimedia shows

• Expand literary events targeted to children and high school students. While this events should be

free to children, a fee ranging from $5-$10 could be charged to parents and adults

• Explore selling promotional items and other official festival merchandise

• Explore setting up a festival bookstore

Threats

• Heritage Theatre is privately owned and the board has no control on the building

• Winterset in Summer Writers Festival competes directly with Writers at Woody Point Festival in

Newfoundland

• Weather can affect outdoor activities

• Success of festival depends on volunteers

i h dMacKenzie, Contemporary Canadian Marketing Cases, Fifth Edition

Teaching Notes

2. Prepare an analysis of what other festivals have been doing to generate a revenue stream.

All literary festivals generate revenue from ticket sales. Dinners with writers and membership fees are

also common revenue streams, with workshops, promotional merchandise, and books clubs as other types

of revenue streams (See Exhibit 3). The Writers at Woody Point should introduce workshops into their

product offerings. These workshops could be held in a different venue, such as the Legion or at the local

high school. The Frye Festival and the Saskatchewan Festival of Words also generate revenue through

sales of promotional merchandise. The event coordinator, Gary Noel, has considered the sale of

promotional merchandise. Promotional merchandise offers customers a souvenir of the event, but

merchandise can also serve as publicity of the festival. The board could approve the sales of small items

such as coffee mugs and t-shirts to supplement poster sales.

Exhibit 3. A comparison of revenue streams of other Canadian literary festivals

Festival Membership

fees

Promotional

merchandise

Book club Dinner

with

writers

Workshops Ticket

prices

Writers at

Woody Point

$10, $100 &

$500

X $20

Ottawa

International

$20/month $15 – $20

Frye Festival X X X X $10 – $30

Vancouver

international

$35 X $17 – $33

Winterset in

Summer

X $10 – $20

Cabot Trails $20 & $60

passes

Shelburne X X $20 – $25

Blue

Metropolis

X $7 – $20

$45 pass

Read by the

Sea

X X $15

Saskatchewan

Festival of

Words

$10 $10 – $25

$160 pass

Sunshine

Coast Festival

of the Written

Word

X X $15

$85 & $250

passes

Thin Air

Festival

$12

$35 pass

Wordfest X X $6-$25

i h dMacKenzie, Contemporary Canadian Marketing Cases, Fifth Edition

Teaching Notes

3. Evaluate the festival’s customer base and suggest a marketing strategy.

The festival customer base consist of adults, over age 40, and baby boomers, over age 55. These

customers are educated and have an interest in literature, culture, and the arts. They enjoy reading books

and may be fans of particular writers. Most of the customers who come to the literary shows are couples

or a pair of couples.

As the festival grew, the board introduced music shows that not only targeted its niche customers, but

also attracted a new customer segment, age 18-35, who was less interested in the literary shows. From

folk music, the festival gradually expanded to offering jazz and traditional Newfoundland music concerts.

While new events such as comedy shows could further differentiate the festival and add new customer

segments, it could be done only without alienating the festival core customers. Therefore, for now the

board may consider a marketing strategy that continues to target the festival’s core customers (adults over

40 and baby boomers over 55), while growing the younger customers (age 18-35).

With the festival expanding to six days in 2010, the board felt that the event should stay at this limit for

the near future. The first two days of the event are music concerts and the festival may want to experiment

with reading shows Wednesday. The Wednesday reading shows may not attract more tourists, but it will

give a chance for local residents and members, who are not able to get tickets, an opportunity to attend a

show.

The festival may also want to introduce reading shows that are targeted to a younger audience, such as

high school, college or university students as a way to build interest in literature amongst youth. An

outreach event was held at a local high school before, and additional reading shows could be held at the

local high school.

4. Develop a marketing plan for the Writers at Woody Point Festival.

The Writers at Woody Point Festival has grown with minimum marketing. The board has identified

product offering and venues as challenges to overcome in order to maintain the economic sustainability

of the event. The marketing mix needs to take into consideration new customer segments, product

diversification and penetration as additional revenue streams.

Marketing Plan

Product

The first additional revenue stream is to modify the existing programming for the 2011 Writers Festival

and incorporate more events such as reading and music shows into the schedule. There is room in the

schedule to increase one reading event at the Heritage Theatre on Thursday and Friday. As capacity at the

Woody Point Heritage Theatre becomes saturated, additional venues should be explored, such as the local

high school and the Legion to accommodate new shows targeted to the core customers (adults and baby

boomers) and the younger customers (age 18-35).

i h dMacKenzie, Contemporary Canadian Marketing Cases, Fifth Edition

Teaching Notes

One or two more boat tours can be added into the 2011 program. The Boat Tour is an excellent

opportunity to provide the festival with a chance for the writers and musicians to interact with festival

fans. Capacity allows 99 in total. The boat tour may include readings of authors or a musical act and the

price could be higher than the $40 that was charged in 2010.

To target customers (age 18-35), the festival could add smaller music concerts that can be played

outdoors (weather permitting) and in between the reading shows. Holding some outdoor events allow the

beauty of the area to mix with the talent of the writers for an incredible experience while at the same time

increasing revenue streams. Also, workshops could be held at the local high school or at outdoor events.

A writing contest for local students may attract young writers and their parents to the festival, especially if

the writing contest is judged by writers attending the festival.

An opportunity for additional revenue lies in selling branded promotional products directly to festival

participants. For nonprofit organizations, these items are a way to allow participants to take away

something tangible and also advertise the festival. The items may be displayed at main events in high

viewing locations for purchase. Depending on the popularity of the items they can also be sold on the

festivals website in the future. Customers may be willing to pay extra for a product if they know the

money is going to benefit the organization. Furthermore, choosing products with a higher perceived value

than their actual cost, and items that best relate to the customer are ideal. Merchandise such as stainless

water bottles, travel mugs, notebook and pen set as well as soft goods such as t-shirts and hoodies may

provide additional revenue for the organization.

Pricing

The majority of the shows in the Heritage Theatre are $20 per person and all tickets are immediately sold

out. There has never been any hesitation for ticket purchase by customers due to price. It is estimated that

raising prices by $5.00 per event, which when combined with increasing programming by one show per

year increases box office revenues by 25%. For example assuming 160 paid customers per show at $25

per ticket would generate $4,000 in sales versus $3,200 at $20. As a way of smoothing the demand, the

Board could experiment with a two-tiered pricing structure based on shows. For example, bringing a high

profile author as a special guest could justify a higher ticket price, say $40 per person.

Another option to increase revenue is to increase Supporters membership fees, from the current $10 per

member to $20. Membership benefits could be enhanced by offering a percentage discount on

merchandise purchases. Also, offering incentives to existing members such as referral programs may also

lead to an increase in membership numbers.

Place

Ownership and control of the Woody Point Heritage Theatre by the Friends of Writers at Woody Point

can ensure that the festival will continue to grow and expand. Moreover, ownership of the building allows

the board to experiment with new shows and events that can add to the success of the Writers at Woody

Point Festival. From a community perspective, ownership of the building by the Friends of Writers at

Woody Point strengthens the relationship between the festival and Woody Point. It can also serve as a

means to creating new tourism-related projects, as well as generating additional revenue streams from

rental of the facilities.

i h dMacKenzie, Contemporary Canadian Marketing Cases, Fifth Edition

Teaching Notes

Promotion

The Writers at Woody Point Festival has successfully used word-of-mouth to promote its events. Articles

in mainstream media, as well as the feature by Noah Richler help consolidate the brand image of the

Writers Festival.1 The website for the festival and other social networking channels such as YouTube,

Facebook, and Twitter can be used to further promote the event. However, local publicity may also be

needed to help increase the number of volunteers and community participants that make the festival run

smoothly.

Another feasible option is to dedicate an area of the website2 to featuring a new book each month as sort

of an interactive book club. This could include commentary from the writer and offer a forum for readers

to leave comments.

Teaching Plan

This case can be assigned to undergraduate and graduate students as a hand-in, or as a class discussion

assignment. Students would be expected to analyze the case using qualitative and basic quantitative

analytical tools. For a 75-minute class discussion, the focus may be on deciding a marketing strategy and

assessing current and potential new customer segments. Also, students should suggest new revenue

streams for the festival. In a longer class, students can evaluate the current marketing mix and suggest

potential changes to the marketing mix. As a hand-in assignment, students should develop a marketing

strategy and a marketing plan that can guide the festival for the next three to five years. At the graduate

level, students could discuss the role of literary festivals in sustaining local economic development, as

well as attracting tourists-related revenue. The instructor can also lead the students into a discussion on

cultural tourism, social business, and the characteristics and challenges faced by literary festivals,

specifically on the issues of financial sustainability.

Epilogue

For the 2011 Writers at Woody Point Festival, the board decided to introduce gradual chances. The issue

of ownership of the Woody Point Heritage Theatre was identified as one of the top two priorities. The

board set a goal to raise new funds that would be used specifically towards the purchase of the building.

As of December 2011, the project is still on-going. The other priority was the development of a marketing

plan that could be fully implemented in 2012. Events targeted to new customer segments were also

introduced. For example, an art exhibition and a film festival were incorporated into the 2011 program. A

community breakfast was also held to raise funds for the local fire brigade. The duration of the festival

was extended from six to seven days to accommodate an extra concert. Ticket prices were raised to $25

per person. There were no changes to promotion activities.

1 Richler, Noah (2010). Best of Canada’s Literary Festivals: A list. Accessed online April 28, 2011.

http://mediacentre.canada.travel/content/travel_story_ideas/lit_fests.

2 http://writersatwoodypoint.com/

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