Market size and potential sales
FunZone will compete in the Online Event Ticket Sales industry. The industry has grown strongly over the five years to 2015, generated revenue of $4.1 billion by the end of the year, and IBISWorld forecasts industry revenue will continue to rebound and will increase at an average annual rate of 3.2% over the five years to 2020. Among those total available market, $873 million was generated by Millennials, who are 18-35 years old.
In NYC, this industry develops rapidly and is highly valued, as it allows to sell and buy more than 1,000 tickets in less than 60 seconds. It provides an opportunity for the general public to visit many popular concerts that are not offered to them. Of course, there are brokers that profit at the expense of ordinary fans (free tickets can be resold, for example) but professionals try to make sure that New York State law is not violated (Sisario para. 6).
Target Audience
As an online ticket service company, we have two target markets. One is end-users, as buyers. End-users are iPhone users who are 18-35 years old and actively purchase online tickets for music events. The peculiarities of this market are not yet decently investigated, and its size is not indicated by researchers, which prevents us from providing accurate data. Still, taking into consideration the fact that MarketingCharts staff claims that 24% of the US population are Millennials, some calculations can be made to obtain an approximate number (para. 4).
This information allows us to presuppose that more than 2 million people who live in NYC belong to this group, as 8,550,405 representatives of the general public currently live in this city (“Current and Projected Populations” para. 1). Since the company only targets iPhone users at the begging period, 44% of 873 million, which is 384 million users will be our target end-users in the US. The other target markets are promoters, small venues, or live music bars in NYC.
Their total number is not estimated decently, but there are a little bit more than 400 small venues and event places in NYC only. Except for that, about 230 music venues can be found in the city (Yelp para. 1). Our job is to connect these two target markets and help small venues and bands promote themselves and end-users to find these places near them. Without planning ahead, users are able to have random fun wherever they are.
Demographics
FunZone will target users between age 18-35 who actively purchase online tickets for events. They are either no income because they are still in school or household income of $25,000-$48,000. They like traveling, but they don’t spend as much money as their other generational cohorts. They obtain value while traveling, and they want to participate in reward programs. In addition, based on data collected by the hotel council of San Francisco on habits of US millennial travelers, millennials are last-minute bookers.
Psychographics
They are afraid to be alone. They demand to be integrated into the culture with an authentic local experience, and they want to go to a local café or a local bar to hang out with local people. On the other hand, they are social creatures online and offline. They like to post a picture or review that can easily reach thousands of people at once. Additionally, they enjoy traveling with others and meet new friends also (Wright 42).
Competitor Analysis
Marketing Plan
Objectives
As a startup company, FunZone has several objectives to run our business. We want to gain brand awareness by having more Funners in the FunZone community, having more social followers, and attracting more small venues to join us. On the other hand, we want to break-even in Year 2, having incremental referral rates and sales volume.
Differentiation
Product features
Geo-Location and Banner Ads
Many bars, restaurants, and retail stores are increasingly using location-based service to target customers directly based on their location. Like Yelp, when users search certain restaurants, it will show the distance and places with the map. In this way, users have a clear idea of the place and make better decisions. And FunZone exactly does the same way! When users choose their music palette, the App will show the lists of nearby events to where they are right now based on users’ preferences.
In addition, FunZone will offer banner ads to increase awareness of those small venues, because banner ads are effective in progressing a potential customer from unawareness of product or service to “top-of-mind” awareness. Wherever people walk around, event recommendations will be popped out by banner ads, and people may go there even without planning for fun before.
FunZone Community- Be one of our Funners!
Be a member of FunZone, and be one of our Funners! FunZone will utilize the community to have customer involvement for the service to facilitate connections between community members. Nowadays, customization is number one, and customers want to involve and express their emotions and experience. By offering community, first-visit users have an idea on how those events look like, which drinks are recommended, and so on. And after attending events, they can leave comments and recommendations, as well as uploading pictures. By exchange information and solve each other’s problems, Funners will enjoy using this App to search for their fun and purchase tickets directly. On the other side, the community can also help FunZone better understand our customers and make improvements.
The convenient and safe booking system
Funners can directly buy tickets through our app. After making payment, they will receive an order confirmation with the order number, and this confirmation will be shown in users’ accounts. Therefore, Funners don’t need to print tickets at home or pay extra charges for shipping. When they attend events, they just need to show that order confirmation.
Pricing
For end-users, FunZone will have a competitive advantage of low price, which will only charge 8% of face value as a brokerage fee for each transaction processed through the app.
For small venues, FunZone will charge $50/month for the use of the app as a subscription fee.
Brand Positioning
FunZone is a customizable app platform for live music lovers and small venues in New York City. It provides more funs to people’s lives wherever they are, and be a digital access card for those funs.
Customer Acquisition Plan
Awareness Campaign
Social Media Campaign
Facebook Page Launch Campaign (one-month)
Like-gates are not allowed by Facebook that is why we would announce our campaign a week before it starts and encourage the audience only to click the “like” button on our Facebook page without sharing it on their timeline. Randomly, people who win a gift card will be selected. 10 winners will be chosen by the system at the end of the campaign and announced on our Facebook page. 3 of them will get the chance to win $100 gift card and 3 of them will get the $50 one, and 4 of them will get a $20 gift card. Individuals are likely to share information about our product due to such opportunities.
Facebook Ads (6 months)
We will have Facebook Ads to gain more Facebook followers. Once they notice our page, they will be attracted by our promotions and even join our gift card campaign. We plan to get 10,000 clicks per month, and the average cost per click for Facebook is $0.25
Instagram Ads (6 months)
We will post sponsored Instagram ads for 6 months, as well as sponsored videos that are claimed to have CPMs of 10%. Still, according to Penna Powers, posts will costs “CPC: $0.44, CPM: $6.58, and CTR: 1.47%” while the price for videos is “CPC: $0.01, CPM: $2.48, and CTR: 3.08%” (para. 6). In this way, we will gain more followers and signups. We plan to get 20,000 impressions per month for 6 months. Taking into consideration the fact that CTR is only 0.9%, all our efforts are likely to reach the total audience of almost 2 million individuals. Such achievement is our target as the market we are willing to reach estimates a little bit more than 2 million representatives of the millennial population.
Digital
Pandora Ads
Based on Edison Research, online 18-34s are more likely to online radio like Pandora. Therefore, FunZone will advertise on Pandora to build brand awareness. It costs $4.99 per month, which is $59.88 annually.
PR/ Content Marketing
Bloggers
Since bloggers have a large network/ fan base, their posts of FunZone will be exposed to our potential customers. We will invite Bloggers who write New York related stuff and promise them mutual advertising and cooperation in the future as well as financial benefits in order to write about our brand and encourage readers to download our app and be Funners. Kakroo claims that the cheapest variant is to get a 600-word article for $5 (para. 15). Still, it should be also taken into consideration that promotion on social channels will require at least $5 while PR promotion can start from $150 for a single post.
Acquisition Campaign
Promotion code for signup
We will post “Get $10 gift card for signup” promotion on each social media page to encourage users to download our app, signup, and be one of Funner in FunZone community.
Referral discount
Another promotion is that we offer users who refer new users a $10 discount code.
Promotion for small venues
To attract small venues to join in our app, FunZone will offer free 6-months subscription fee for the first year.
Retention Campaign
Membership
Users will earn points after they make any transactions through our app. We also have seasonal double points twice a year, which are in January and in June.
Banner Ads
When user signup, they can choose to show banner ads to inform nearby events or show notifications of plans of their Facebook friends. As an external trigger, banner ads push you to know interesting events and join with others even without planning ahead. CPM for iPhone is $2.85, and we want to get 20,000 impressions per month.
Email Marketing (by Mailchimp)
Through e-mail, FunZone will try to send the latest information to Funners, such as the top 10 small venues, or new small venues joined in, each week bases with featured pictures and reviews by users. Our e-mail provider will be MailChimp, which is a professional email marketing service company in the U.S. and is quite well-known.
Partnership
New Yorkers were the most likely of any city to cite “meet someone special” as a reason they go out. Therefore, FunZone will be a partnership with a dating app called Happn, which has a similar geo-tracking function and has already had 10 million users worldwide. By using this app, users are greeted by a collection of other users with whom you’ve physically crossed paths with throughout your day. By partnering with Happn, FunZone will acquire new users immediately, and our business will be bumped up. So, FunZone will not spend much money on advertising except Year 1.
FunZone will offer a revenue-sharing model with Happn, which is 10% of our revenue.
Media Plan & Budget
Works Cited
Current and Projected Populations, 2016. Web.
Kakroo, Upasna. How Much Does Content Marketing Cost?. 2015. Web.
MarketingCharts staff. Demographic Stats about US Millennials. 2014. Web.
Penna Powers. How Much Do Ads on Instagram Cost?. 2015. Web.
Sisario, Ben. Report Exposes Widespread Abuses in Ticketing Industry in New York. 2016. Web.
Wright, Michael. Psychographic Characteristics of the Millennial Generation, 2006. Web.
Yelp. Live Music Bars New York, NY. 2016. Web.