Sample Undergraduate 2:2 Business Report

HOW HAS THE RECENT ACCIDENT AT ALTON TOWERS AFFECTED THEIR BRAND REPUTATION AND ORGANISATIONAL PERFORMANCE?

Introduction

The main aim of this essay is to examine how the recent publicised accident at Alton Towers has affected both their brand reputation and organisational performance. This essay will also outline a new recovery strategy to enable Alton Towers to re-instil faith and trust in their brand with consumers moving forward.

Background to the accident

In 2015, a rollercoaster cart malfunction caused an accident on the Smiler ride at Alton Towers (Buswell et al, 2016). The malfunction was caused by a computer system error which caused one cart to be released from the platform despite one being stalled on the track (BBC News, 2016, p.1). Alton Towers’ ride operator Merlin were fined £5 million for the accident by the victims of the malfunction who were seriously injured (BBC News, 2016, p.1).

Brand Reputation

What is the Branding Strategy of Alton Towers?

Alton Towers use an own brand label branding strategy (Blomstrom, 2018). Blomstrom (2018) explains that an own brand label branding strategy is where an organisation creates and develops their own brand image and emblazons all their products and services with it. Alton Towers’ own brand strategy involves emblazoning their tickets, rollercoaster carts, restaurants and hotels with their brand image (Eyre, 2018). Brand slogans are another key aspect of Alton Towers’ branding strategy as they attach messages beneath their brand logo to capture the interest of their consumers (Eyre, 2018).

The Effects of the Accident on Alton Towers’ Brand Reputation

One of the biggest and most significant impacts which the accident has had on Alton Towers’ brand reputation is that it significantly undermined consumer faith and trust in the brand (Buswell et al, 2016). This is chiefly because, Alton Towers’ own computer systems were found to be the root cause of the accident therefore this raised questions from consumers concerning the reliability and dependability of the brand (Spracklen & Lamond, 2016). A further key adverse after effect of the accident on Alton Towers’ brand reputation was that it damaged the familial appeal of the brand (Battersby, 2016, p.270). Buswell et al (2016) explain that in recent years Alton Towers’ have made a concerted effort with their branding strategies to target young families. Post-accident however the graphic nature of the injuries displayed in mainstream newspapers as well as on news apps have put young parents off of the idea of engaging with the brand (BBC News, 2015).

A consumer research study compiled by BBC News (2015) found that the targeted segment of young parents was the segment most adversely impacted by the bad PR surrounding the Alton Towers brand name. A further key effect which the accident had on Alton Towers’ brand reputation is that it damaged young school kids’ perception of the brand (Battersby, 2016, p.270). This consumer group lost a considerable amount of faith in the Alton Towers brand because immediately after the accident occurred, Alton Towers delayed a press release (BBC News, 2016, p.1). In the time it took to issue out the press release to journalists, social media rumours were rife and provided false accounts of the accident (The Daily Telegraph, 2015).

By the time the press release was finally issued, young school kids had already digested the false account of the story from social media rumours therefore significantly distorting their view of the brand (Battersby, 2016, p.270). To minimise the damage to their brand reputation, the chief executive of Alton Towers’ parent group Merlin accepted full personal responsibility for the injuries of the passengers and reimbursed them all accordingly (Spracklen & Lamond, 2016). Spracklen & Lamond (2016) explain that this recovery strategy proved effective from an ethical perspective because the brand accepted liability and therefore consumer perception of the brand improved slightly.

Organisational Performance

Aside, from the damage to their brand reputation, Alton Towers have also suffered a dip in organisational performance post-accident (The Financial Times, 2015). Battersby (2016, p.270) explains that “the group has since reported substantial reductions in visitor numbers across its sites and has issued a warning that profits may be down by £47 million for the financial year with further impact on results in subsequent years”. Market research conducted by The Daily Telegraph (2015) has found that 2015 was Merlin’s most difficult trading year in its business history. In 2016, one year after the accident occurred on the Smiler rollercoaster ride, Alton Towers were still experiencing a dip in revenues, with parent company Merlin suffering losses of over £22 million (Express and Star, 2016, p.1). Similarly, the BBC (2016, p.1) found that one year after the accident, visitor numbers to Alton Towers dropped markedly by over 25% resulting in severe financial ramifications for the organisation.

The main reason why Alton Towers has experienced considerable financial problems since the accident is due to a rapid decline in visitor numbers (The Daily Telegraph, 2015). This links back to the earlier discussion regarding the consumer perception of the Alton Towers brand as unreliable and untrustworthy (Battersby, 2016, p.270). The targeted customer segment of young families is the segment which has experienced the largest drop in visitor numbers since the accident occurred in 2015 (BBC News, 2015). The figures suggest that Alton Towers experienced their lowest visitor count of the year in the weeks after the accident occurred on the Smiler rollercoaster (Eyre, 2018). By comparison, research carried out by The Financial Times (2015) has found that post-accident, Alton Towers recorded the largest decrease in visitor numbers and consumer footfall for a decade. With vastly decreased numbers of visitors, Alton Towers have a much smaller consumer base to target with new product and service promotions (The Financial Times, 2015).

One of the key areas of organisational performance which has improved since the accident is Alton Towers’ handling of computer glitches and software malfunctions (Eyre, 2018). Brown (2018) states that the company is now much more adept at planning contingency strategies in the event of rollercoaster cart issues such as stalling, mechanism failure or wheel locking. Furthermore, the accident in 2015 caused Alton Towers to streamline their business by annexing over 190 staff positions (Express and Star, 2016, p.1). This boosted organisational performance in the area of efficiency and agility as decisions now go through less layers of management (Eyre, 2018). In relation to the accident in 2015, a smaller staff base would have assisted because the press release would not have taken as long to be prepared and distributed to news agencies (Thomas, 2018). Another area of organisational performance which has been directly affected by the Smiler rollercoaster accident in 2015 is R&D (Research and Development) (BBC News, 2016, p.1). Thomas (2018) argues that post-accident, Alton Towers now invest much more heavily in rigorously and stringently quality checking their rollercoaster carts and systems mainframe to ensure that a similar event does not occur in future. 

Conclusions/Recovery Strategy

In conclusion, this essay has succinctly outlined the main ramifications which the accident at Alton Towers has had on their brand reputation and organisational performance. A key finding of the research carried out in preparation for this essay is that Alton Towers’ handling of the accident could have been better, and this would have considerably reduced the PR damaged experienced by their brand. The research and discussion carried out within this essay has also found that Alton Towers’ brand reputation was damaged significantly by the accident. One of the main areas of damage was consumer perception of the brand. The family and school kids consumer segments were the most adversely affected by the PR fallout from the accident. Finally, this essay has also found that Alton Towers’ public acknowledgement of liability has proved an effective recovery strategy in reigniting consumer faith in the brands level of trustworthiness. In relation to a recovery strategy, Alton Towers should leverage their equity rich brand to re-instil faith and trust in their consumer base.

A further action which senior management officials at the theme park should consider taking is to advertise the results of computer safety checks. This would increase consumer trust in the reliability and dependability of the brand which are elements which have been undermined recently. Based on the findings and conclusions drawn from this essay, Alton Towers should also issue press releases much more efficiently and quickly in the future. With the accident in 2015, a significant amount of brand reputation damage was caused by misinformation and falsehoods being spread via social media channels. If a press release had been issued more promptly by the company, this could have prevented the damaging rumours from circulating and resulting in consumer distrust of the brand. A further element of the recovery strategy proposed for senior management officials at Alton Towers to consider is to provide special dispensations for the victims of the accident. Presently, Alton Towers have began work in this area of recovery however it has proven ineffective as the victims view it as something of a token gesture (Battersby, 2016, p.270). In the future, Alton Towers should increase their efforts in this area by engaging more with the victims of the accident and canvassing their opinion of what type of recompense they would like to receive.

References

Battersby, S. (2016) Clay’s Handbook of Environmental Health. London: Routledge.

BBC News. (2015) How Will Smiler Crash Affect Alton Towers; Reputation? [Online] URL: https://www.bbc.co.uk/news/uk-england-stoke-staffordshire-32993933 [Date Accessed: 25/06/18]

BBC News. (2016, p.1) Smiler Crash: Alton Towers Operator Merlin Fined £5m. [Online] URL: https://www.bbc.co.uk/news/uk-england-stoke-staffordshire-37481825 [Date Accessed: 25/06/18]

Blomstrom, D. (2018) What is Emotional Banking? London: Palgrave Macmillan.

Brown, S. (2016) The Theme Park: Hey Mickey Whistle on This! Consumption Markets and Culture. 21(2), pp.178-186.

Buswell, J, Williams, C, Donne, K & Sutton, C. (2016) Service Quality in Leisure, Events Tourism and Sport, 2^nd Ed. London: CABI.

Express and Star. (2016, p.1) Alton Towers Visitor Numbers Down as Merlin ‘Learns Lessons’ of Smiler Accident. [Online] URL: https://www.expressandstar.com/news/2016/07/29/alton-towers-visitor-numbers-down-as-operator-suffers-22m-losses-in-wake-of-smiler-accident/ [Date Accessed: 25/06/18]

Eyre, A, (2018) The Making of a Hero: An Exploration of Heroism in Disasters and Implications for the Emergency Services. Fire and Rescue Services. 1(1), pp.113-129.

Spracklen, K & Lamond, I.R. (2016) Critical Event Studies. London: Routledge.

The Daily Telegraph. (2015) Alton Towers Crash Hits Profits and Sends Shares Tumbling. [Online] URL: https://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/leisure/11764662/Alton-Towers-crash-hits-Merlin-profits-and-sends-shares-tumbling.html [Date Accessed: 26/06/18]

The Financial Times. (2015) Alton Towers Revenue Drop Hits Merlin. [Online] URL: https://www.ft.com/content/08b9ff0a-5d0e-11e5-a28b-50226830d644 [Date Accessed: 25/06/18]

Thomas, D.H. (2018) Managing Online Communications and Feedback Relating to the Welsh Visitor Attraction Experience: Apathy and Inflexibility in Tourism Marketing Practice? University of Wales Repository. 1(2018), pp.1-10.