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The Recreational Gaming Zone

5169 words (21 pages) Essay in Marketing

5/12/16 Marketing Reference this

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Statement of Financing needed:

In order establish a new business, we need approximately Rs.50 Millions. In which half of the financing will be accessed through our Partners and the remaining will be accessed through Banks, investment companies and other financing companies.

Statement of Confidentiality Report:

This report is confidential and is the property of the co-owners as listed above. It is intended for use only by the persons to whom it is transmitted, and any reproduction of any of its contents without the prior written consent of the company is prohibited.

Executive Summary

The keys to success for The “Recreational Gaming Zone” is our ability to market effectively, creating an unmatched, cool, marvelous, and felicitous atmosphere where people will like to be, and hiring qualified/certified and skilled and knowledgeable staff to aid in the running of our programs and leagues.

The sports and fitness club industry is a booming business that offers considerable turnover for individuals investing in it.

The company provides a wide range of indoor sports services. Customers can join the sports club for a justified monthly fee.

The large number of sports customers represents an attractive pool of prospective customers. The customers are private customers. The expected revenue is between …. in the first year. The goal of this start-up is the operation of an indoor sports center

Industry Analysis:

Over the next five years, the sports industry is forecasted to show moderate growth, largely driven by demography and new entertainment opportunities.

The company expects that the sports industry is undergoing significant change from professional sports to entertainment.

Future outlook and trends:

A brief analysis of the industry has provided us with the following facts and trends that might follow in the future.

With the rapid change coming in the technological environment the establishment is expecting to face immense competition in the coming era. The company intends to pursue a strategy aimed at delivering sustainable growth in earnings and company value. The company expects that the highly fragmented market and its anticipated growth provide an opportunity for expanding the company’s business and increasing its overall market share. The key strategies of the company are to: produce high quality sports experience increase the number of customers by making strategic investments, improving service quality.

Demographic facts:

Regarding economic trends and outlooks the income is at booming level and is expected to grow with the same pace in the area of Gujrat. Per capita income in Gujrat District was Rs. 1625/- compared to overall Punjab (Rs. 1389/- per month). In district Gujrat 34 percent people are living below the income level of Rs. 750 per month compared to Punjab where 39 percent people live under poverty line of Rs. 750/- per month (Government of Punjab, 2004).About 75-80% of the heads supporting families of the city reside in foreign countries particularly European countries, UK, U.S, and Gulf Region to earn their income. This has also fostered a belief in us to initiate a project like this in our chosen operational area.

Beside the population of the city has also increasing vigorously. This increment in population coupled with an increase in the income level of the inhabitants has provided a strong opportunity for our business to thrive in the coming time.

Analysis of competitors:

Currently there is only one potential competitor in our locality, a project initiated by Zamindar Degree College. Other potential competitors might be organizations that can offer high technology like Virtual Reality to their customers, a product more advanced than the mere computer games offered by our entity to its prospects.

From the industry data it is evident that sports business is a thriving business with strong market growth rate, and rate of return for investors.

Our establishment is offering unique services and options contrary to our potential competitor in our locality. There are a number of benefits and advantages our business has got over competitors, like better gaming options, timing hours, a rich and diversified target market, and other geographic advantages.

Market Segmentation:

Based on the analysis of market we have decided to differentiate the market on the basis of gender, income, age and stage in the life cycle, usage status, and usage rate.

On the basis of stage in the life cycle the categories include singles, married couples with children, married but without children, and retired individuals.

The individuals meeting the criterion of income include those having income level of Rs. 40000 and above. In addition individuals having savings of Rs. 30000+ are also included among our prospects. The criterion of income applies to all other segments as well i.e. individuals coming under the heading of singles, married individuals and others should also have the above mentioned income level.

Single females are prohibited to get membership in our venture. This classification has specifically been made by looking at culture of the locality of operation of our business. However there is no restriction for the membership of males. Separate timing hours have been organized for both singles and family memberships keeping in view the convenience of both categories.

There are no age limits on getting membership in our gaming zone. But again the restriction and conditions described above equally apply to individuals of all ages and gender.

Under the heading of user status come tourists, and other members like businessmen, teachers, engineers working at prominent positions, and similar knowledgeable intellectuals. Separate timing hours matching their schedules would be arranged, along with special promotion offers pertained to attract and retain them would be considered.

Tourists another small market segment for The Entertainer will be the tourists who are attracted to the facility because of its size and appearance.

Description of the Venture:


“It is our mission to provide the best programs, staff, and equipment, to fully meet the various sports and fitness needs of our members, while generating a profit for the owners and investors. Besides providing an excellent value to our customers “


The Recreational gaming zone is a new multisport complex that will provide both members and casual users an opportunity to participate in a variety of sports and leisure programs and activities. The establishment’s main purpose is to provide an environment of pleasure and choice to its members seeking fun, recreation, and excitement by providing a myriad of strategic, adventurous, and other pleasure oriented gaming options.

We have started this venture to provide residents of the locality with a completely new option to fulfill their need of refreshment and having fun. Currently the sports opportunities available to masses of the city are rapidly depleting due to increased population, and advancement in industry which has turned rural areas into urban ones. There is currently no other option in the city that matches our establishment. Currently there is only one major Playing Ground namely Zahoor Elahi Stadium operating in the city. Besides this there are some gymnasiums and karate clubs as well; however none of these provide opportunities comparable to our venture. So in order to avail the opportunity to satisfy our customers needs of refreshment we have decided to include versatile games in our venture like Bowling, chess, snooker, table tennis, and with relatively new technology based computer games to entertain children by grabbing their attention and sensation.

The uniqueness of our idea has offered us with high chances of success, for there is currently no close competitor operational in our target market area. Only one such club is under construction near Marghazar Colony under the custody of Zamindar Degree College, which is directed to provide sports facility to respective college students and faculty members. No membership option is available to people of local community in this sports complex.

We have chosen a site located near Chenab River, occupying a total area of 1 acre. A total of Rs. 10 Million has been spent out to purchase the land. The site has provided us with a strategic position to better target population of two major districts namely Gujrat, and Gujranwala, and their suburbs. In this way we are better able to gain first mover advantage by initiating this unique project oriented to capture the market of particularly Gujrat and secondly Gujranwala. Hence by choosing this locality to situate our business we are in a position of market leader and therefore can get high rate of return on our investment.

High cost volumes have been incurred to acquire land and other capital necessary for full functioning of the venture. Every thing is purchased and nothing is acquired on lease. The budget to initiate such a costly project is expected to be round about Rs.40 to 50 million. Up to 50% of the financing is decided to be made through Banks and investment firms.

The venture would comprise of single story building, including two major partitions. One portion is entirely dedicated to Bowling court which would consist of 25 columns. While the rest of the area is reserved for other games mentioned above in the discourse. Special endeavor has been paid to match the facility with latest standards. Besides these efforts to provide food arrangement have also been made to relinquish our customers.

As this facility is completely new to our potential customers so we have also explored the option of trainers, to guide them and help them to get familiar with rules, and policies involved in playing games available at the establishment, during their membership with the institution. For this purpose we have hired the expertise of well reputed trainers working in established organizations similar to ours in other cities like Lahore, Faisalabad and others. This option to provide expert trainers for our customers was also necessary because none of the entrepreneurs initiating the venture has been expert in the field dealt by the establishment.

Keys to Success

The Keys to Success for The Recreational Gaming Zone are as follows:

Marketing: We must make The Recreational Gaming Zone a common name in the Gujrat and creatively market our services to each of our market segments.

Atmosphere of facility: By creating an unmatched “cool” atmosphere in the gaming zone through the use of first class equipment, floors, and colors, people will want to frequent visit our facility and our ability to retain members will be enhanced.

Knowledgeable/qualified staff and management: By providing the users of the facility with knowledgeable and qualified staff who show genuine concern for the patrons, people will feel comfortable and confident that The RGZ can meet all of their sport and fitness needs.

Production Plan:

Recreational gaming zone is a service oriented entity in contrast to manufacturing business. Hence there is no section of production plan included in the business plan of this venture. This section is mainly discussed in the business plans of manufacturing businesses.

What we need to discuss here is to list the sources of supplies of games involved. Some of the supplies include pins used in bowling, the bowls that will be used for rolling, snooker balls, sticks for playing snooker, badminton shuttles and rackets, technical assistance in the successful implementation of computer games plus fixation of any defects, pieces used in the playing of chess and the boards on which the game is played, and finally the necessary equipment required in the playing of table tennis.

Suppliers and their Location:

Principal suppliers of our utilities are operating in Sialkot, Lahore and Gujrat as well based on the specialization of different regions. The accessories required in the playing of table tennis, badminton, and snooker can be found at least cost from the companies situated in Sialkot. The rest of the equipment particularly things made of wood would be procured from the suppliers at Gujrat, which is well known for its wood works. All the remaining items not available from the specified regions would be purchased from suppliers in Lahore.

Operational Plan:

The operational plan of the business is simple and straight forward. The company intends to sell its memberships to its prospects. Initial membership fee is fixed at Rs. 5000 for all members regardless of their category. As all the operations are carried out entirely at the establishment facility so the operational plan of our venture is somewhat different from most other service oriented businesses.

The requirement of additional major capital is seldom, because it includes relatively long term assets and thus need not be purchased on a continual basis rather occasionally for e.g. in case of breakage of snooker tables or table tennis ones. On the other extreme there is often a need of utilities like shuttles, pins, rackets, to name a few. So it has been decided to keep an adequate stock of these items to meet the regular demands of customers adequately and instantaneously, plus reducing the costs associated with the storage of surplus inventory.

There is an arrangement of separate department at RGZ to monitor the working of various operations performed. The hierarchy at the organization is depicted in the following diagram.

The company intends to starts operations in the region of Jehlum city as well after two years of operations. This location is selected by looking at the charming market providing great potential for our business to thrive.

Marketing Manager


Establish valued relations with customers and employees

Create awareness in the market place

Providing the good environment.

Make the policy attractive more and more people

Flow of orders for goods and services

Technology utilizations


Finance is considered a backbone of any entity particularly the one going to establish newly. At RGZ the finance department has the following working described below

Finance Manager:


Financial reporting.

Checking cash inflow and outflows

Profit and loss statements of monthly opening and closing.

Prepare and review budget, revenue, expense, payroll entries, invoices, and other accounting documents.

Check of proper working of the cashier.


Serial No.


Registration Fee

Membership Fee

Monthly fee







Table Tennis















Computer games








The salaries of various employees working at RGZ are given in the table drawn below


Recruitment / Selection of Personnel:

Recruitment/selection criteria

Employee orientation and training

Compensation and Benefit Packages:

Employee Bonus

Base Pay (Salary)

Medical Benefits

Basic Needs

Advance Salary

Marketing Plan

Effective marketing together with consistent promotion are the keys to success. The company focuses on a comprehensive web marketing and classical marketing strategy designed to attract new customers, convert leads into sales, and maximize revenue. In the start-up phase it is a central task of the marketing concept to establish name recognition and its own trade mark. Several marketing and sales promotion strategies are available in the industry to choose from. Later on the strategy will primarily be targeted to gain new customers and create customer loyalty of repeat customers.

Market Research:

Prior to starting our venture we have estimated the size and intentions of our prospects. The research data was very conducive for the opening of the venture of the type in discussion. The following chart depicts the response our prospects have provided to us.

Research Methodology:

The research methodology adopted consisted of the following contents. Both the primary and secondary sources of data collection options were explored as,





SWOT analysis of RGZ:

The principal strengths of our venture are the unique games provided compared to our current competitors. The chosen site has also provided us with first mover advantage, for there is no present comparable venture operational in the region under consideration.

Among the weaknesses come options that we have not included yet, such as swimming pool, Basket Ball, karate club, and other products that have been available from our close competitors like pace, AFC and others.

There is a strong potential for the venture to gain advantage from the opportunity of first move plus innovation by reaping the rewards from prospective customers, for there is no alternative to our venture, to which they might refer as substitute. By using this opportunity we are in a better position to obtain high rate of returns on our investment, a part demonstrated in the financial section of the plan.

The major threat as described earlier is the innovation and improved technology that might be introduced by our potential competitors in the future. Specifically if any competitor that enters the market with relatively advanced technology in the coming next two years can pose a serious threat to the profits generating capability of the sports complex. Another recent threat comes from the political scenario prevailing in the country, particularly war against terrorism, and the resulting bomb blasts and explosions made by extremists in various parts of the Country. To avoid this threat special endeavor would be made to void any security lapse.

Competitor analysis:

The information on this topic has been covered earlier in the plan however here a concise detail regarding the topic is made.

The company is in a sense market leader, with no comparative competitors operational in the locality. A portion of competition comes from establishments like AFC, Pace, and Zamindar Degree College Sports Complex (under construction), due to somewhat similar products offered by these institutions, and in some cases offering products that have not been included in our planning operations.

Despite all these our company has significant strategic advantage over our current and potential competitors. The product offering at the RGZ is completely unique in all aspects. Games like chess, bowling have a strong market potential and are currently offered by less similar establishments working in the surrounding areas of our venture.

Marketing Objectives at RGZ:

Marketing plays an important role in the survival of any business .The success of the co. in market depends considerably upon the role of marketing department.

RGZ consists of marketing department with high aptitudes and innovative ideas in sports centers.

Here a marketing manager, and sale manager, dealing officer, assistant manager and several other employees are working within marketing department.

Specific Marketing Department Goals:

By looking at the outcomes from the conducted SWOT analysis of RGZ and by completing competitor analysis the following main objectives for RGZ marketing plan have been set.

Sell 750 memberships in year one, 1200 by the end of year two, and 2000 by the end of year three.

Organize and develop various sports leagues and market them effectively.

Provide young generation of Gujrat and surroundings a good entertaining plate form

Show at least a 10% return to investors in the first year of operation.

Marketing Strategies:

Due to the size and convenient location of our facility, many people will be attracted to The Recreational Gaming Zone (RGZ) to see what we have to offer. However, we will not be content to just wait for customers to come to us. Instead, we will focus our marketing strategies on those market segments who match our offerings. The great thing about marketing The Recreational Gaming Zone (RGZ) is that each market segment relates, in certain ways, to all the others.

Our main objective with our early marketing strategy will be to get people into our facility. Once people see what we have to offer, and feel the atmosphere that will be created, they will want to return and participate in the many activities and programs that will be available to them.

Some of the ways The Recreational Gaming Zone (RGZ) will get people into the facility include:

Offering tours to junior and senior high schools during the building and early completion stages of the facility.

Having a large promotional event to open the facility that will be free to everyone.

Hosting and/or supporting various community events that will bring in many people who otherwise would not come.

Mailing out free day passes to all of the surrounding area.

Following the opening of The Recreational Gaming Zone (RGZ), print and radio media will be used to promote both the facility and the programs that are being offered to attract new people from all over the Gujrat and surrounding target market areas.

Target Market Segment Strategy:


Media Used

Sales Strategies

Sales promotion

Public relations


Print advertising

Direct marketing

The company uses direct-response advertising, including television, internet and other media, to attract buyers to the center.


Advertising is any paid form of non-personal communication of ideas or products in the “prime media” i.e. television, newspapers, magazines, billboards, posters, radio, cinema etc. Advertising is intended to persuade and to inform.

Advertisement Objectives:

To create maximum awareness of this new sports complex among the people and tell them how important health for anyone.

To build a strong brand equity by having a distinct position in the minds of the customers.

Media Usage for Advertisements (Budget Requirements):

FM Radio

Print advertising

Direct marketing

Cable TV Ads

Online marketing

Online marketing

The Company has the budget and strategy that allows it to use dozens of traffic providers to link to its core web site .

Newspaper advertising is an integral and desired part of the marketing strategy. Print media advertising is a mass communication tool. Printed advertisements will be used in national and international magazines to increase the number of customers.

Marketing cooperation the best way to find out who would make a good partner is to research the potential businesses in the industry.

Direct marketing

The company uses direct-response advertising, including television, internet and other media, to attract buyers to the center.

Media Used



Total Costs (Rs.)

Cable TV

6:00 pm to 11:00 pm

30 seconds

100000 monthly


6:00 am to 10:00pm

45 seconds

60000 monthly



50000 annually

Print Adverts.

100000 annually

Public Relations

Providing them proper coaching to run machines.

Oversee game management operation

Provide instant help to any member when he/she need.

Organizing some programs on events like Eid, and other important events.

Oversee and provide guidance for the scheduling of all athletic and recreational facilities including the developing of a price structure and the procedures to bill and collect all fees charged.

Strategy and Implementation

The Recreational Gaming Zone (RGZ) has a very large potential market. Because of the small number of recreation and fitness facilities in the Gujrat City, we feel we will become the number one sports and fitness complex quickly. This will be accomplished by actively and continuously promoting The Recreational Gaming Zone (RGZ) through radio and media advertisements.

Sales Strategy

Sales in the sport and fitness club business are based on the services and amenities provided by the facility. The “something for everyone” slogan fits perfectly with The Recreational Gaming Zone (RGZ). All of the users of our facility must feel like they are getting the best possible value out of their money. If there is a better value, for equal services, The Recreational Gaming Zone (RGZ) will match or beat that value for our customers.

Each person desiring a membership at The Recreational Gaming Zone (RGZ) will be able to sit down with a representative and be notified of all of their membership policies, terms and conditions. During this brief discussion, the person will be also be informed of all of the services, programs, and amenities The Recreational Gaming Zone (RGZ) has to offer. It will be important to establish a relationship of trust with our members as retaining membership is equally important as developing new customers.

Sales promotion

Sales promotion strategies have temporary effects only. Sales promotion will be used for a limited time to increase the number of customers. The strategy will include special offers with opening discounts for new customers. The initial membership prices will be reduced by 50% for the first three months.

Organizational Plan

Company Ownership

The Entertainer will be a Limited Partnership corporation that will be privately owned. Eight partners will own the company

Identification of Partners:

The principal partners of the venture are

Mr. Usman Shaukat

Mr. Faisal Amjad

Mr. Fawad Saleem

Mr. Hassan Mushtaq

Mr. Qasim Javed

Mr. Mohammad Babar

Mr. Mohammad Adeel

Mr. Fawad Zaman

All these partners have contributed with the same percentage in the total equity of venture. Up to Rs. 0.8 Million has been paid by each party. While the remaining part has been financed from Banks and financing firms.

Authority of Principals:

The authority is distributed uniformly among all the entrepreneurs. There is no difference in potential for different principals.

Management Summary and Background:

The entrepreneurs will stay within their expertise in running the day-to-day operations of the facility, along with running and developing various leagues and programs for the community. Back-up for the general partners will include staff members who will compensate for the founders lack of experience in each area. For example, qualified personnel will be hired for the food and beverage and fitness areas. General help staff will be hired on a need basis as the users of the facility increase. There will also be a janitor hired for basic cleanliness and maintenance of the complex.

The Entertainer will have a total staff of 13 people in the first year of operation. It is projected that an additional three people will be added each year for the next two years. The majority of the salaries are projected to raise 5% per year for the first three years. This estimate may be conservative.

Assessment of Risks:

Among the weaknesses come options that we have not included yet, such as swimming pool, Basket Ball, karate club, and other products that have been available from our close competitors like pace, AFC and others.

New technologies:

We are providing the latest technology in RGZ. And we expecting that for the next 2-5 years, the possibility of change in technology will be low.

Financial Plan:

Important Assumptions

The financial plan depends on important assumptions, from the beginning, we recognize that collection days are critical, but not a factor we can influence easily. At least we are planning on the problem, and dealing with it. Interest rates, tax rates, and personnel burden are based on conservative assumptions.

Some of the more important underlying assumptions are:

We assume a normal economy(not very strong as in Pakistan), with recession.

We assume the rate of growth for the number of sports club memberships will continue.

The company assumes that a number of trends are likely to further increase the demand for indoor sports.

Break-even analysis:

The risk analysis considers critical factors that may lead to a failure of the business concept. Such factors can involve failures during the implementation phase as well as during operations. Such potential factors are ordered according to the probability at which they can arise. Shown are the key factors that can lead to the failure. Data is drawn from surveys from five businesses with different services as well as revenue and cost structures.

Growth is the core strategy of the company. Development activities require a high level of funding over a long period of time and, over the course of its existence, the company intends to develop or acquire other companies. There is no assurance that additional funding will be available to the company in the future or be secured on acceptable terms. If adequate additional funds are not available, the growth of the company might be significantly lower.

The company may be unable to adjust spending quickly enough to offset any unexpected revenue shortfall. If the company has a shortfall in revenue in relation to the expenses, the operating results will suffer. The operating results for any particular quarter may not be indicative of future operating results.

The company will experience a period of rapid growth that will result in new and increased responsibilities for existing management personnel. Further, the company will employ a number of additional senior management personnel. The company’s growth is expected to continue to place, a significant strain on the company’s management and operating and financial systems.

. Insufficient demand and wrong capacity frequently leads to business failure. This includes permanently low demand as well as a temporary collapse in demand. Often demand estimates were too optimistic at the outset. Such failures might also come from external shocks instead of operating deficiencies.

Disruptions or management failures may cause interruptions in service or reduced revenues. If service is not restored in a timely manner, this would reduce revenues or increase costs. Service disruptions could also damage

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