Background of the Mortimer’s Castle
Mortimer’s Castle is one of the most important tourist attractions in the United Kingdom. William Fitz Osbern founded the Castle in 1067. The castle served as an administrative base for the Lords of the Mortimer who ruled the West Midlands and East Wales.
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The castle was a center of power for over 500 years (English Heritage 2012). Thus, several kings and queens used it as a palace or a residential area. The Mortimer’s family owned the castle from 1075 to 1425. However, the ownership of the castle was later transferred to the Crown.
Sir Thomas Harley bought the castle in 1601(English Heritage 2012). Currently, there are no houses or any form of accommodation of the site. However, the ruin of the castle still exists. Concisely, the ruined Mortimer’s Castle is located at Wigmore in Herefordshire.
The ruin dates back to 921AD, thereby making it one of the oldest and culturally significant historic treasures in the United Kingdom. Currently, the ruin is owned by private entities. Nonetheless, the government is responsible for its preservation. The castle, as well as, the adjacent land is currently available for sale.
The PEST model is a marketing tool that facilitates analysis of the macro-environment of a firm. Concisely, it enables marketers to measure the impact of political, economic, social, and legal factors in their industries (Winer 2006, p. 114).
The Ancient Monuments Act of 1913 prohibits alteration of historic buildings (Historic Houses Association 2012).
Similarly, the planning Act of 1990 protects buildings and areas of special architectural or historic interest from the destruction that might occur due to commercial or residential development (Parliament UK 2012). In this regard, developing Mortimer’s Castle by changing its architectural attributes will not be possible.
Hence, the Hereford Tourist Board has to use the castle without making significant alterations to it. The national Heritage Act 2002 permits private entities to produce and sell souvenirs, which are associated with ancient monuments that are located in England.
In this regard, the board can generate an income by selling souvenirs that are associated with the castle (National Heritage Act 2002).
Tourism is one of the key drivers of economic growth in the UK since it contributes 8.2% of the country’s GDP and supports over 2.6 million jobs (British Tourism Authority 2012). The demand for rural heritage and cultural attractions such as the Mortimer’s Castle is likely to increase in 2012.
The factors that underpin this growth include the country’s economic crisis and the weakening of the British pound. Concisely, the citizens are opting for local and short trips due to financial constraints. Hence, the number of visitors to the Mortimer’s Castle is likely to increase.
One factor that is likely to reduce the growth of the industry is the VAT, which was increased to 20% in 2011 (British Tourism Authority 2012). Ticket prices have risen in response to the increase in VAT. Hence, the demand for visits to tourist attractions is likely to reduce.
Nearly 83% of tourists are day visitors. Herefordshire receives over four million visitors. However, the average expenditure per visitor is only 27.64 pounds (British Tourism Authority 2012). Empirical studies indicate that tourists prefer destinations that reflect the significance of history, architecture, public spaces, and arts.
Additionally, they prefer destinations in which local foods and drinks are available. These preferences increase the number of visits to local and regional attractions such as the Mortimer’s castle. Rapid population growth is a threat to rural heritage and cultural attractions (Facts and Figures about Herefordshire 2012).
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In particular, it can lead to the destruction of tourist attractions through commercial and residential developments.
Technology is important in the tourism industry since it facilitates marketing activities and provision of services. A heritage railway connects Wigmore to Cardiff and Manchester, thereby improving the accessibility of the Mortimer’s Castle.
Furthermore, the train is an attraction due to its historical background. Advancements in information and communication technology also facilitate the execution of activities such as marketing of tourist destinations (Collison & Spears 2010, pp. 130-142).
For example, social media such as Twitter can enable the HTB to convey information about the castle in a fast and cost-effective manner. Similarly, online payment and booking improves access to the industry’s products (Jamrozy 2007, pp. 117-130). However, safety risks discourage the use of online payment and booking systems.
Porter’s Five Forces Analysis
Power of the Suppliers
The primary suppliers have a high bargaining power due to the following reasons. First, there are very few suppliers. Second, rural heritage and cultural attractions are very few in the country. Those that are available might not be on sale.
In our case, the owner of the castle is the primary supplier since he is the only seller. Thus, he can exploit the buyer (HTB) by increasing the buying price.
Power of the Buyer
The buyers in this case are the customers who are likely to visit the tourist attractions. The buyers have a high bargaining power because they have low switching costs. Concisely, the buyers can easily opt to visit other castles or tourist attractions.
One factor that is likely to reduce the power of the buyers is the differentiation of the attractions (Soteriades 2012, pp. 107-120). Each castle or tourist attraction has unique attributes that sets it apart from its competitors. Thus, the owners of the attractions can charge high prices for their products.
Threat of Substitutes
The threat of substitutes is moderate. The substitutes for rural heritage and cultural attractions include overseas tourist destinations and national wildlife parks. One factor that reduces the threat of substitutes is the economic crisis, which limits the customers’ ability to afford international trips.
At the national level, the differentiation of local attractions in terms of their scenic features increases the threat of substitutes. Concisely, customers are likely to visit attractions that provide better experiences than the Mortimer’s Castle (Koller & Salzberger 2009, pp. 401-414).
Threat of New Entrants
New entrants are firms that are likely to join the industry (Handlechner 2008, p. 48). The threat of new entrants is low due to the following reasons. Firsts, castles are not readily available, thereby limiting the ability of potential investors to join the industry.
Second, joining the industry requires huge capital investments. This discourages potential investors from joining the industry. Finally, product differentiation reduces the threat of new entrants. The incumbents own some of the best attractions, which new entrants might not be able to acquire.
The intensity of competitive rivalry is high due to the following reasons. First, there are several castles and tourist attractions in the UK and other countries. In the UK, these attractions include the Tower of London and the Warwick Castle among others.
Second, the uniqueness or the differentiation of each attraction increases competition because customers will always opt for the best alternative. Additionally, the industry has a low growth rate of only 3%.
Hence, competition is likely to increase as owners of attractions intensify their marketing campaigns in order to attract more visitors (Fifiled 2012, p. 83).
The strengths of the Mortimer’s Castle include the following. First, it is the most important historic site in England. Second, the castle has a rich heritage and iconic features that are likely to attract more local and international visitors. Third, the original features of the castle still exist.
Some of the features that have been in existence for the last 700 years include a jousting field, a defensive ditch, and a lake. There are also ancient and modern routes on the site. These features boost the competitiveness of the castle since they enhance the customers’ trip experiences (Peter & Donnelly 2010, p. 78).
The awareness of Herefordshire as a visitor destination is low. Consequently, the number of visitors who are likely to tour the castle will be low due to its location in Herefordshire. The second weakness is that there are no accommodation facilities at the site. Thus, visitors can only stay at the site for a short time.
The HTB can improve the popularity of the castle in order to increase the number of visitors. This can be achieved through promotional activities such as advertising the castle. Third, the board can develop new attractions on the site in order to increase customers’ choices and to improve the visitors’ trip experience.
The government’s objective of supporting the tourism industry through marketing campaigns is also a growth opportunity (Parliament UK 2012). Concisely, the number of visitors to the castles is likely to increase due to the government’s marketing efforts.
The threats in the industry include the following. To begin with, the competition is very high. Several firms and tourist attractions are competing for the same customers.
Legal restrictions on the development of historic buildings might limit the board’s ability to improve the features of the castle in order to make it more attractive to the visitors (Historic House Association 2002). The economic crisis in the UK and Europe is also a threat to the industry’s growth.
The crisis has significantly reduced the disposable incomes of potential customers. Consequently, expenditure on leisure activities such as visiting the castle is likely to reduce significantly. Finally, changing climatic conditions will limit the board’s ability to preserve the ruins of the castle.
Additionally, rapid population growth in Herefordshire County is likely to contribute to the destruction of tourist attractions in the region.
The HTB is in the business of providing tourism services. Thus, the objective of buying the castle is to extend the board’s portfolio of tourist attractions in order to increase sales and profits. In this regard, the target is to receive at least 50 visitors per day at the castle in the first year.
The number of visitors will be increased by 5% in the next two years. The financial target is to earn 500,000 thousand pounds through sales in the first year. The sales turnover will be increased by 10% in the next three years.
Segmentation will be based on age and benefits. Thus, the market can be divided into the following segments. The first segment will include customers who are interested in the historic value of the castle. This segment can include individuals who are over 65 years.
The second segment will include customers who are interested in learning a new skill, art, and craft. Customers who are between 16 and 29 years old will fall in this segment. The third segment caters for the needs of the customers who are interested in activities such as walking or horseback riding.
This segment includes customers who are between 30 and 44 years old. The fourth segment will consist of customers who prefer to relax and view the scenic features of the castle. This segment includes customers in the age bracket of between 45 and 64 years.
According to the GE matrix, the segments that consist of customers who are between 45 and 64 years, as well as, 16 and 29 years old are the most attractive. Thus, the board should focus on serving these segments in order to improve its profits.
The castle has a high capability of meeting the demands of customers who are between 30 and 44 years; 16 and 29 years; and over 65 years. However, it does not have the ability to meet the demands of the customers whose ages are less than 16 years.
Thus, investments should be made in the most attractive segments in the first few years as the board prepares to meet the demands of other segments. For example, the board can invest in sports facilities such as a racecourse on the site in order to meet the demands of customers who are interested in activities.
The board’s strategic objective is to generate an income from the castle. The segments that consist of customers who are between 45 and 64 years; 16 and 29 years; and under 16 years old contribute to this strategy due to the following reasons.
First, customers whose ages are less than 16 years tend to be adventurers. Thus, they are likely to visit the castle frequently. Second, individuals who are between 45 and 64 years old are among the working class. Thus, they are likely to have enough money to spend on leisure activities such as visiting the castle.
Marketing mix is a conceptual framework that enables managers to make decisions that help them to configure their offerings in order to satisfy customers’ needs (Winer 2006, p. 117). Generally, the marketing mix represents a set of choices that businesses must make in order to develop and sell various products or services.
The marketing mix consists of the 4Ps of marketing. The 4Ps include “price, product, place, and promotion” (Loudon, Stevens & Wrenn 2004, p. 167). Business organizations can use the 4Ps to develop both long-term and short-term strategies.
The HTB is likely to improve its competitive advantage if it makes the right choices regarding the 4Ps of marketing. In this context, the 4Ps can improve the competitiveness of the Mortimer’s Castle as follows.
Product refers to the good or service that a customer purchases in order to satisfy specific needs. Developing the right product for the market requires a clear understanding of the features or qualities that customers are looking for (Freeman 2010, p. 324).
Concisely, marketing managers should understand the needs that must be satisfied through the production of their services or products. Visitors and holidaymakers are interested in destinations in which they can learn a new skill, craft, sport, or subject.
They are also interested in outdoor activities such as walking and horseback riding. In addition, the holidaymakers prefer destination in which they can access local foods and drinks. These preferences represent the features that customers are looking for in an ideal tourist destination.
Consequently, the HTB must include these features as part of its services at the Mortimer’s Castle. Moreover, the board can establish a restaurant that focuses on selling local foods and drinks. Alternatively, the board can outsource the restaurant and sports services in order to reduce the cost of operating the castle.
Place refers to the actual location where customers prefer to purchase the product or service (Rogers 2001, p. 213). In this context, the site or the location of the castle is the place in which the customers can buy the tour services.
Since the location cannot be changed, it will be in the interest of the HTB to improve the accessibility of the castle. Currently, the castle is accessible through a railway line.
However, it is necessary to develop alternative means of transportation in order to cater for the needs of the customers who are not interested in travelling by train. In this regard, the board can collaborate with transporters such as car rental companies to provide alternative transportation services to the castle.
Price refers to the monetary value of a product or service that is on sale. Concisely, it refers to the “amount of money that a customer must pay in order to acquire a product” (Collier 2001, pp. 42-45). It is essentially, the cost of visiting the castle.
The factors that the HTB must take into account in order to set the right price for its services include the following. First, the board must understand the customers’ perception of the value of the service.
The rationale of this requirement is that customers are not likely to pay for the service if its cost exceeds the amount of money that customers are willing to pay (Ivy 2008, pp. 288-299). Consequently, the board’s pricing strategy must take into account the customers’ ability to pay.
Second, the board should be aware of the effect of competitors’ prices on the demand for its services. Price is one the factors that inform customers’ substitution decisions. Thus, the board should set prices that are comparable to the average industry price in order to avoid losing customers to its competitors.
Finally, the board should understand the level of price sensitivity in the market. In this regard, the board should not make major price changes if such changes are likely to cause significant reduction in demand.
Concisely, a significant price change can make the customers to opt for less expensive tourist destinations, thereby reducing the number of visitors to the castle.
Promotion refers to any effort made by a business to increase its sales or usage of a product (Chikweche & Fletcher 2012, pp. 507-520). Promotional activities involve conveying information that is likely to convince potential customers to purchase a product or a service.
In this case, promotion refers to the activities that the HTB must perform in order to increase the number of visitors to the castle. The board has allocated 15,000 pounds to finance its promotional activities.
The objective of this expenditure should be to enrich the visitors’ experience, increase the understanding of Mortimer’s rich history, as well as, to improve the economic and social prospects of the Hereford town through an increase of visitors, their length of stay and spending.
These objectives can be achieved through the following promotional activities. First, the board can advertise the castle as a tourist attraction in order to increase awareness. The resulting increase in visits will improve the board’s income and the socio-economic prospects of the town.
Second, the board can enrich the visitors’ experiences by providing information on how to access the castle and related services such as accommodation. Finally, the board can arrange for a grand opening ceremony in order to create publicity and attract visitors to the castle.
The board should also take into account the effects of the promotional activities of its competitors (Goi 2009, pp. 56-60). Generally, the board should differentiate its promotional activities in order to reach and convince potential customers to visit the castle. The promotional activities will last for two years.
|Activity||Description||Expenditure per year|
|Advertising||Adverts in newspapers, radio, TV and website||3000 pounds|
|Publicity||Media releases and interviews with the media||2000 pounds|
|Direct marketing||Sending letters, pamphlets and brochures to potential customers||2500 pounds|
Building the Brand
Qualities of the brand
Mortimer’s Castle is the most attractive historic site in England. The castle has a rich heritage and iconic features that other castles and tourist attractions might not have.
Concisely, the original features of the castle still exist. The castle’s features have been in existence for the last 700 years. These features include a jousting field, a defensive ditch, and a lake among others.
Brand positioning will be based on service standards and the brand name. Mortimer’s will be the brand name that will be popularized so that customers can identify with the castle as a tourist destination.
By maintaining high service standards, the board will create memorable customer experiences. Thus, the castle will be positioned as the most attractive and culturally significant historic site in the United Kingdom.
Marketing communication activities such as advertising will focus on highlighting the qualities or the features of the castle and the benefits of visiting it. This will help the Hereford Tourist Board to improve the brand personality and to reinforce the customers’ perceptions about the castle.
Internal marketing will involve creating awareness about the brand among the employees. Concisely the employees must have a clear understanding of the castle’s brand values and positioning. In this regard, the board can introduce training programs in order to improve the employees’ knowledge about the castle.
The Balanced Scorecard
The balanced scorecard is a “strategic planning and management tool that enables managers to align business activities to the vision and strategy of their organizations; improve internal and external communications; and to monitor organization performance against strategic goals” (Olve & Siostrand 2006, p. 78).
The balanced scorecard provides a framework for measuring the performance of an organization by identifying the measurement metrics. The objective of the balanced scorecard is to incorporate non-financial measures in traditional performance measures. This helps managers to develop a more balanced view of the company (Winer 2006, p. 98). The rationale of using the balanced scorecard system is that it addresses the weaknesses of the measurement systems that focus only on the financial aspect of the firm. It focuses on the following perspectives.
The Learning and Growth Perspective
This perspective focuses on the employee training programs, as well as, the organizational culture that improves the competitiveness of the company (Jeffs 2008, p. 132). In the tourism industry, employees are the most important resources since their competence determine service quality.
Consequently, the Hereford Tourism Board should develop effective training and development programs in order to improve the skills and competence of its employees.
The Business Perspective
This perspective focuses on the internal processes of the organization (Witcher & Chau 2010, p. 221). Its objective is to evaluate the effectiveness of business processes such as marketing, human resource management, and financial management among others.
The business perspective will enable the board to assess the effectiveness of its operations. In this regard, the board should use this perspective to identify the services, or products that are likely to suit the needs of the customers.
The Customer Perspective
The aim of this perspective is to improve customer satisfaction (Kaplan 2010, pp. 2-10). The rationale of improving customer satisfaction is that dissatisfied customers are likely to switch to alternative service providers who are able to satisfy their needs.
Thus, dismal performance in this perspective is likely to lower the competitiveness of the castle. In this regard, the board must focus on improving its relationship with the customers by offering excellent services.
The Financial Perspective
This perspective advocates for prudent management of the organization’s financial resources (Martin 2010, p. 81). In this case, the objective of the HTB will be to achieve the stated sales target (500,000 pounds) within the specified period.
Thus, the sales volume is the metric that will help the board to measure its financial performance. Achieving the financial objective will help the board as follows. First, the board will be able to enhance its marketing mix by funding promotional activities such as advertising the castle.
The resulting increase in brand awareness will enable the board to increase the number of visitors by 5% in the next two years. Second, the income can be used to develop new attractions on the site and to preserve the ruins of the castle.
In addition, it can be used to develop new services in response to emerging market needs. Thus, it will be possible to serve all the market segments effectively. Finally, using the funds to train and empower the employees to offer high quality services will enable the board to improve its competence in meeting the needs of the customers.
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