MKM916-Interactive Marketing Plan

Selkirk Express

Executive Summary

The Selkirk Express (TSE) has welcomed 750,000 guests since 1996 and the company

successfully increased its capacity from 60% in 1996 to 85% till now. The sales and profits have

remained a steady rate of 8-12% increase per year. The company is offering three tour packages

to the customers. Recently, the Canadian National and Canadian Pacific railroads have

postponed any increase of additional trains and rail cars for TSE. And, they proposed to lengthen

the tour season. The management of TSE has decided to increase their utilization of existing

capacity from current growth level 2% to acceptable growth level 4-5% for sustainable business

operation. To achieve the target, TSE should lengthen the tour season and engage more

customers. The database shown that out of 750,000 customers, 600,000 customers did not taken

more than one trip. So, the company targeted these huge number of customers from which TSE

expects additional required customers will be fulfilled through interactive marketing strategies.

To reach the target, the company makes an integrated marketing plan to capture approximately

23% customers out of 600,000 by 2018 for sustainable business operations.

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Table of Contents

1.0. A brief history of The Selkirk Express (TSE)..........................................................................5

2.0. Situation Analysis.....................................................................................................................6

2.1. The current marketing situation............................................................................................6

2.2. SWOT analysis.....................................................................................................................6

2.3. Customer analysis.................................................................................................................8

2.4. Market analysis...................................................................................................................10

2.5. Environmental analysis.......................................................................................................13

3.0. Market Strategy......................................................................................................................15

3.1. Marketing objective............................................................................................................15

3.2. Financial objective..............................................................................................................15

3.3. Possible strategy.................................................................................................................15

3.4. Customer forecast...............................................................................................................16

3.5. Selected strategy.................................................................................................................17

3.6. Target group........................................................................................................................18

3.7. Media selection...................................................................................................................20

4.0. Test Plan.................................................................................................................................22

4.1. Marketing campaign...........................................................................................................22

5.0. Budget plan.............................................................................................................................24

Bibliography..................................................................................................................................25

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1.0. A brief description of The Selkirk Express (TSE)

The Selkirk Express is a ‘tourist railroad’ operator doing the business since 1996. The company

is operating the business during peak tourist seasons. TSE offers various tour packages (2 days to

one week) for its prospective customers. TSE welcomed its 750,000 guest just within 18 years

since took off the business. And, it is a good sign for a company that launched with hand-me-

down equipments along with leased locomotives. The Selkirk Express was started to fill up a gap

which was created during VIA Rail diminished on service through Rockies. After the cutbacks,

TSE would travel at night through magnificent mountain scenery. And, this brings an

opportunity for TSE and the owners of the company negotiated to get exclusive rights to daylight

travel through Rockies. TSE was very successful from the starting and currently it offers 3

separate itineraries. The company is increased its capacity from 60% to 85% (since 1996 to

current). And, this is very good rate for TSE and the company is trying to increase this rate more

than now.

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2.0. Situation Analysis

2.1. The current marketing situation

The company has experienced continuous growth in sales and profits approximately 8-12%

growth per year. The company successfully increased it operating capacity from 60% to 85%

since starting the operation and open new routes and offers. The corporate objective of TSE is to

growth 4-5% annually but last two years the growth was stagnant at 2%. Moreover, the railways

that the company operates have recently told that TSE will not eligible for any expansion in the

number of trains and the company will consider for lengthening the operating season (currently

April through September). Besides this, TSE cannot allow to add new rail cars as they are

currently used maximum number of railcars.

2.2. SWOT analysis

For marketing strategy plan, TSE needs to be done a SWOT analysis which will provide the

possible facts of the company. The facts are founded through SWOT analysis of Selkirk Express.

Strength :

TSE has exclusive rights to day light travel through Rockies which adds more values with

current offers.

TSE is considered for lengthen the tour season.

Weakness:

VIA Rails has stopped to consider TSE for adding more routes.

The company also lost the eligibility to add more rail cars.

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Opportunities:

Railway tourism is very attractive to customers and this rate is increasing every year

(Westcar, 2013).

TSE has welcomed 750,000 customers since 1996 and database shown nearly 600,000

have not enjoy other tour packages of TSE. And, there has a big opportunity for the

company attaches these customers with new tour packages.

Threat:

Various substitutes tour program such as vacation destination, cruises, and abroad

tour packages will attract customers.

Barriers in opening new routes.

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2.3. Customer analysis

TSE categorized prospective customers into two groups; primary target group and secondary

target group.

Primary target group: TSE considers the following issues in determining primary target

customers (50% of total buyers of TSE vacation package).

Geographic location Canada

Demographic condition

Age: 50+ years old

Marital status: Married

Gender: Male and female

Life span: Empty nesters, adult

Education level: College/University grad

Occupation: In any profession

Household income level: $125,000+

Vacation budget: Exceeds $7,500

Perception Customer should like adventure tour minimum

once in every year.

Psychographic condition Customer should like passing time in nature

and little concern about expense for comfort.

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Secondary target group: TSE considers the following issues in determining primary target

customers (30% of total buyer of TSE vacation package).

Geographic location Canada and USA

Demographic condition

Age: 62+

Marital status: Married

Occupation: Retired

Household income level: $75,000-$125,000

Travel budget: $7,500

Perception Love to vacation travel at least one trip within

two years.

Psychographic condition Love nature and like travel in their vacation

and ready to pay for comfort except too much

physical movement.

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2.4. Market analysis

According to Chernev (2015), market analysis is necessary because it helps organization to

identify current position of the company, competitors and collaborators in which the focal brand

operates. These indicators analysis provides clear ideas to TSE about its strengths, opportunities

and area of challenges.

2.4.1. Market trends

Railway excursion is becoming very popular in recent year in Canada. According to Railway

Association of Canada (2011) tourism expenditures on passenger rail was $250 million and

approximately 90% rail passenger was tourism related in 2009. This data indicates fierce

competition in railway tourism in Canada.

2.4.2. Product analysis

The Selkirk Express is “tourist railroad” that starts its operation since 1996 and last year the

company was welcomed its 750,000th guests. TSE operates its packages from April to

September. Now TSE offers three different tour packages named ‘Selkirk Experience’, Selkirk

Explorer’ and ‘Selkirk Expedition’ from the original 2 day trip to 7 day tours of beautiful British

Columbia.

TSE offers ‘premium’ and standard service tour packages to the customers. Premium service

customers get meal in the dining car as well as liquor and wine, seating in dome cars along with

upgraded room accommodation. TSE offers the following tour packages for their customers.

The Selkirk Experience :

Duration: 2 days, 1 night

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Destination: Vancouver to Calgary

Travel route: Through the Rockies

Weekly trip: 3 departures per week from each terminus

The Selkirk Explorer :

Duration: 5 days, 4 night’s trip

Destination: Vancouver to Jasper and return

Travel route: Through the Rockies

Weekly trip: 1 departure per week

Additional offer: Visiting Jasper National Park

The Selkirk Expedition :

Duration: 7 days, 6 night’s trip

Destination: Vancouver to Whistler

Weekly trip: 1 departure per week

Additional offer: One day boat tour to gulf Islands.

2.4.3. Alliances

TSE uses the railways tracks of both Canadian Pacific railroads and Canadian National

railroads.

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The Selkirk Express connect with a major cruise company‘s trip to Alaska through the

Inside Passage for a 2 day excursion to week long tours.

TSE also go for agreement with different hotel for overnight stay. From Vancouver to

Calgary trip, the company keeps customers in Revelstoke hotel for overnight stays.

2.4.4. Competitors

The major competitors of The Selkirk Express are:

Albert Prairie Railway Excursions

Royal Canadian Pacific

Great Canadian Rail tour Company Ltd

Train Touristique de Charlevix Inc.

Canada Rail Vacations is one of the biggest competitors having more passenger capacity

and offering six circles tours along with rocky mountain trip.

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2.5. Environmental analysis

For environmental analysis, PEST analysis is best fitted for TSE. Makos (2014) claimed that

PEST analysis is an important framework which helps to summarizes macro environmental

factors and trends in relation with target markets, customers and technology. The PEST analysis

for TSE is as follows.

Political : This factor refers the level of government intervention over the business

environment. Legal and regulatory factors by the government affect in the operations of

an organization. TSE is using the both Canadian Pacific railroad and Canadian National

railroads those have proclaimed that TSE will not allow for further expansion in the trains

and railcars. They fix up 15 railcars for TSE and proposed the company increase the

enhancing the duration of tour seasons.

Economic : The main economical factors include interest rate, inflation rate, exchange

rate, unemployment/employment rate, tax rate and others. These factors play significant

impact over the operations of an organization. The rate of inflation in Canada is

comparatively slower and it has estimated 1.5% to 1.7% in the year of 2015-16 (Schnurr,

2015). In addition, the unemployment rate in Canada is currently 6.8 per cent and it is

expected the rate will reduced up to 4.9 per cent in next several quarters; however, the

employment rate is increasing every quarter in every state of Canada (Tencer, 2015).

These economic indicators showed that TSE has scope to grab more tourists in their tour

packages.

Social : The trend of Canada is that people like travel in their vacations and they are

saving money for expending in their tour. The second biggest market of TSE (30%) are

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retires and has much time for travel. TSE has big opportunity to grab them into their

primary target customer.

Technology : TSE has smart database system where all data of various target customers

are reserved. The company can install mobile apps to provide their tour packages and

offers and online booking system. Besides this, TSE can install mobile messaging system

and online advertisement for attracting more customers towards their tour offers.

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3.0. Market Strategy

Developing effective marketing strategy is very challenging for TSE at this current fierce

competitive market environment. Adopting suitable marketing strategy is very significant for

TSE because this will favor us to attract more prospective customers and reduce promotional

expenses.

3.1. Marketing objective

Our marketing objective is to maintain positive and continuous growth in every season and build

a strong brand positioning in customer’s mind in railway tourism sector.

3.2. Financial objective

It has seen that TSE’s growth level remain stagnant at 2% and the accepted rate is 4-5%. So, we

are decided to reach at acceptable growth level of 4-5%.

3.3. Possible strategy

The possible marketing strategies for TSE are as follows:

Increasing the rate of utilization of current capacity. It will be achieved through fulfilling

the maximum numbers of capacity.

Increasing the rate of repeat purchase for other tour packages and database showed that

currently 20% buyers take another tour package and less than 1% has taken more than 2

trips. TSE target is to attach more customers for more than 2 trips.

Creating new markets especially newly married couples, families and young adults.

3.4. Customer forecast

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At present, The Selkirk Express is utilizing their capacity at 85% and our aim is to increase this

rate at 93% within 2018. As per the proposal of Canadian railway authority, TSE is decided to

lengthen the tour season. The shoulder season will start from March 3 rd week and end in April

and peak season will start from May and end in October 2nd week. The company requires to

engage nearly 12,636 customers by 2018 to achieve marketing objective (table 1 shows the

description of required number of additional customers to reach from 85% to 93% capacity

utilization).

Table 1: Calculation of required additional customers

Particulars Shoulder season(March- April)

Peak Season(May to October)

Number of trains in a week 5 5

Number of rail cars 10 K 15

Maximum available occupancy per trip 10*72 = 720 15*72 = 1080

Number of weeks for tour season 6 22

Weekly occupancy for passengers 720*5 = 3,600 1080*5 = 5,400

Maximum possible passengers 3,600*6 = 21,600 5,400*22 = 118,800

Required number of passenger for 93% occupancy rate

23,544 129,492

Required number of additional passenger 1,944 10,692

K During Shoulder Season the number of rail cars will be added if necessary.

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So, TSE must ensure (1944+10,692) = 12,636 additional passengers to reach its target utilization

by 2017 and hopefully our market strategy will be able to grab this additional customer within

the timeline.

3.5. Selected strategy

We selected interactive marketing strategy for attracting our target customers and hopefully TSE

will be successful to achieve the target. Interactive marketing is a quickly spreading trend in

marketing where marketing has done from a transaction based endeavor to a conversation

(Lilyquist, 2015). This is not as like online marketing rather through using internet technology

organization can interact with customer and convince prospective customers to buy their

packages. We select interactive marketing strategy because today internet service reached at

every corner of the world and most of the people are attach with internet service through their

Smartphone, broadband connection or Wi-Fi network.

Through interactive marketing strategy, TSE will able to create a database of service users and

eager users for taking the packages of the company. Current customers while on board the train

will receive information in other tours during the end of their trip. This database helps TSE to

evaluate the perceptions, choices and feedback of service users which in turn helps to categorize

primary target group and secondary target group.

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3.6. Target group

Analysing the in-house database system, TSE categorized its target customer into two groups;

premium customers and standard customers.

Premium customers: They are the main concern for us. Current database indicates that only 20%

out of 750,000 customers were received another trip in TSE. So, TSE wants targeting those who

take one trip within two years to increase the rate of premium customer at 45% by 2017. Other

issues which considers for premium customers are as follows:

High income at least $125,000 per year

Taken premium service at least one within two years.

Health conscious

Medium and large business people, newly married couple, prefer comfort in tour.

Standard customers: We target standard customer basically for shoulder season. The Canadian

railway authority has given permission to increase the rail cars during Shoulder season. So, TSE

targeted to attract more standard customers so that additional rail cars (currently 10 in shoulder

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Premium CustomersTaken more than one trip

Standard CustomersTaken one trip

1%

Target Group

(TSE)

season) will possible to place. The other issues that considers for standard customers are as

follows:

People who have at least $75,000 income per year

Taken at least one trip within two years

Adventure lovers

Young adult (college/university level), retired couple.

Database figure out 600,000 customers those were not taken more than one trip in TSE. This

huge number of existing customers is our primary target from which we filter more premium and

standard customers for next several seasons.

3.7. Media selection

Media selection is very important part for providing the information to prospective customers.

TSE has a well structured database of all previous buyers of various tour packages by date of

purchase and type of purchase. The company also runs a well structure web-site which promotes

the tours prospects to buy tours and provide additional up to date information. TSE has taken the

following media to promote its marketing strategies:

Website

Email

Mobile marketing (mobile apps, display ads, mobile message)

Telemarketing (booking and information request)

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Brochure and

Social media

Table 2: Media campaign strategy

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Social mediaSocial media

Brochure Brochure

Mobile

marketing

Mobile

marketing

Telemarketing Telemarketing

Email Email

WebsiteWebsite

MediaMedia

Strategy / Campaigns

No. of target customers

Expected response rate

Total no. of additional guests

Website 750,000 0.7% 5250

Email 600,000 0.8% 4800

Mobile marketing

200,000 0.5% 1000

Telemarketing 150,000 0.6% 900

Social Media 30,000 0.5% 150

Brochure 140,400 0.4% 562

Total response 12,662

4.0. Test Plan

TSE primarily selected existing customer who was made a trip in TSE within last two years.

Offer for the customers

Customer criteria Premium customer Shoulder customer

Existing customers 15% discount will provide for

booking in current season in

any package.

10% discount will provide for

booking in current season in

any package.

4.1. Marketing campaign

Media Process Number of activity Due date

Email Send invitation card

featuring all tour

packages and offers.

Email will send 2

times.

August 25, 2015.

Mobile marketing Send mobile message

and insisting them

visit TSE website for

knowing latest offer.

Mobile message will

send 3 times.

August 25, 2015.

Social media Provide information

of current offers.

Every day August 25, 2015.

Direct mail Invitation card and

brochure

One time August 25, 2015

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Our expected target is to collect 1,200 customers out of 100,000 past trip receivers for current

season. If we will lag behind the target, TSE will go for further modification in its campaign

strategy after evaluating the whole marketing process.

4.2. Evaluating process of test plan result

TSE use some processes in evaluating the test plan result. The company uses a database where

all required information of trip receivers has included. The company uses this database to

indentify either the test plan brings up the expected result or not. TSE determine the milestones

of every week expected customers and at the end of the week, they will know how many

customers take the service and compare will compare with the milestones. This test plan will

continue for 8 weeks and at the end of the period the company will understand compare actual

result with the standard result. It is to be noted that, if the actual result will not achieve the

standard, TSE should change its marketing strategy for next tour seasons.

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5.0. Budget plan

Particulars Target customer Cost per thousand ($) Total cost ($)

Email 100,000 500 50,000

Mobile marketing 30,000 ( 2 times) 1000 60,000

Direct mail 8,000 5,000 40,000

Brochure 140,400 2,000 280,800

Social media 20,000 1,500 30,000

Total cost 460,800

Footnotes:

Email Creative development cost (per thousand)

Data processing and emailing (per thousand)

Total

450

50

500

Direct mail Brochure cost (per thousand) (Per copy $2)

Invitation card cost (per thousand) (per copy $1.5)

Letter shop cost, envelope, postage cost (cost per thousand) (per

copy $1.5)

Total

2,000

1,500

1500

5,000

Social media Creative development and daily upload cost (per thousand) 1,500

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Bibliography

Chernev, A. (2015) The Marketing Plan Handbook. 4th Edition. Chicago: Cerebellum Press.

http://www.parl.gc.ca/Content/LOP/ResearchPublications/2014-74-e.html

Lilyquist, M. (2015) Interactive Marketing. [Online]. Available at:

http://homebusiness.about.com/od/homebusinessglossar1/g/Interactive-Marketing.htm

[Accessed: 29 July 2015]

Makos, J. (2014) What IS PEST Analysis and Why it’s Useful. [Online]. Available at:

http://pestleanalysis.com/what-is-pest-analysis/ [Accessed: 28 July 2015].

Railway Association of Canada (2011) Tourist Rail Members. [Online]. Available at:

http://www.railcan.ca/rac/member_railways?type=Tourist [Accessed: 27 July 2015].

Schnurr, L. (2015) Canada’s inflation rate edges higher on rising food, shelter costs. The Global

and Mail. [Online]. Available at:

http://www.theglobeandmail.com/report-on-business/economy/canadas-inflation-rate-rises-on-

higher-food-shelter-costs/article25544560/ [Accessed: 28 July 2015].

Tencer, D. (2015). Canada's Unemployment Rate Steady At 6.8% Amid Huge Increase In Jobs.

Huffington Post. [Online] Available at: http://www.huffingtonpost.ca/2015/06/05/canada-

unemployment-may-2015_n_7518224.html [Accessed 28 Jul. 2015].

Westcar, K. (2013) Canada is wasting a passenger rail opportunity. [Online]. Available at:

http://www.railjournal.com/index.php/blogs/ken-westcar/canada-is-wasting-a-passenger-rail-

opportunity.html [Accessed: 27 July 2015].

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