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RoadRUNNER Organized Tours 2013-2014 Riding Seasons

Sponsored by

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Table of Contents

EXECUTIVE SUMMARY …………………………………………………………………..3 INTRODUCTION A. Mission Statement ………………………………………………………………………... 3 B. Background ………………………………………………………………………………...4 SITUATIONAL ANALYSIS A. Internal Analysis …………………………………………………………………………..4 B. External Analysis ………………………………………………………………………….5 C. Competitive Analysis ……………………………………………………………………...6 D. Customer Analysis ………………………………………………………………………...7 MARKETING GOALS A. Organization Goals ………………………………………………………………………. 7 B. Marketing and Project Goals …………………………………………………………….. 7 C. Product Portfolio and Positioning ……………………………………………………….. 7 D. Unique Value Proposition ………………………………………………………………...8 MARKETING STRATEGY …………………………………………………………………8 MARKETING TACTICS ……………………………………………………………………8 IMPLEMENTATION AND CONTROL ……………………………………………………9 A. Action Plan ……………………………………………………………………………….11 B. Budget ……………………………………………………………………………………12 C. Evaluation ………………………………………………………………………………...13

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EXECUTIVE SUMMARY

This marketing plan focuses on RoadRUNNER Organized Tours, a sister company of RoadRUNNER Magazine, a national travel publication for motorcyclists. The tours are guided, all inclusive vacation packages for small groups of 6-15 motorcyclists. They originally began when RoadRUNNER founder Christian Neuhauser brought readers with him to experience riding in the Alps, the place where his passion for motorcycling and for travel was first inspired. Currently there are four international tours and one U.S. tour offered by the RoadRUNNER Team.

In past years, the tours have been filled but not always to maximum capacity, which means that money continues to be left on the table. Additionally, the tours do not generate large net revenue because operating costs are high. The marketing strategies for this plan include: 1) Filling tours to maximum capacity. 2) Enhancing the position of RoadRUNNER Organized Tours amongst tour operators, 3) Increasing the number of non-RoadRUNNER reader participants by 10%, 4) Increasing net revenue by increasing the net profit gained from each participant by an average of 10%.

To date, there has never been a formal marketing plan in place for this company. The initial marketing budget will be large for the first year (20% of net revenue or around $9,600), but will stay around 5-8% of revenue in future years when not as much upfront product enhancements are necessary. The marketing tactics will involve increasing search engine optimization, advertising online, and using partnerships and social media for promotion. Because one of the marketing strategies is to reach motorcycle touring enthusiasts, outside of RoadRUNNER’s readership, it is especially important to have a strong online presence and to search for new websites/blogs to reach their audiences.

INTRODUCTION

A. Mission Statement

To share with other motorcyclists, our passion for travel, through unique trip experiences that will change their lives.

B. Background

Christian Neuhauser, RoadRUNNER Magazine’s founder, led the first organized tour in Central Europe, a trip which is now known as the Five-Country Tour. (http://www.roadrunner.travel/events/five-country-tour/) Christian’s goal was for readers to experience riding the Alps, his place of inspiration for motorcycling and ultimately for starting RoadRUNNER . His philosophies on life and travel directly influence the mission statement and marketing goals of RR Organized Tours. After he passed away in 2005, the magazine continued

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production under the guidance of his wife Christa, and the guided tours to Europe continued as a service to RoadRUNNER subscribers and to honor the legacy of Christian. The Five-Country Tour continues to be a main-stay and the most popular trip for participants. However, new tours are added each year to accommodate consumer interest. Because planning the trips is labor and cost intensive, the staff has decided to alternate tours every other year while the Five-Country tour remains on the roster. For 2013, RoadRUNNER Organized Tours is offering 4 international tours and one U.S. tour: Peru Tour, The Grand Alps, Five-Country Tour, Croatia Coasts & Curves, and Appalachian Autumn Tour. Currently there is no formal marketing plan in place. This is most likely because RoadRUNNER has not had any problems filling spots on their tours in the past using their built in promotional tools: the print magazine and website. However, this year, RR Organized Tours is struggling to obtain the maximum number of participants for each trip and thus is not reaching its full profit potential. This marketing plan should be put in to place immediately, but some of the proposed tactics may not be applicable until next year.

SITUATIONAL ANALYSIS

The data used for the situational analysis was taken from the Motorcycle Industry Council Report (2008), surveys/testimonials from past participants of RoadRUNNER Organized Tours, from online motorcycle forums, and from the Edelweiss website.

A. Internal analysis

Strengths:

• Established High-end Brand and RoadRUNNER Readership • The product is priced on the low end of the market. • Experienced staff (that relates to target market) • Established tours and relationships that make pre-trip planning easier and less expensive

Weaknesses:

• No online registration • No reward program or referral system for participants • No add-ons, which can be purchased by participants, to create more revenue from tours • Small variety of tours (Most are in Europe) • Consumers confuse the Organized Tours with the magazine, which is bad for

RoadRUNNER’s branding. Also some of RoadRUNNER’s advertisers view the Organized Tours as competition for them.

• Low profit

B. External environmental analysis

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Opportunities:

Capturing motorcycle touring enthusiasts outside of the RoadRUNNER readership. The touring segment is large and growing in the U.S. Currently we have not done any promotions or advertisements outside of RoadRUNNER’s existing audience, which means there is a lot of potential for growth.

Capturing the near-retiree and wannabe retiree market. (Age 45-60) New research shows that many people are delaying retirement because of the economy. In a way, this is good for travel promoters, because it means that this segment may be searching for more “escapes” from their regular lives with retirement not an option right now.

Creating add-ons for participants to purchase for their tours. An add-on could be anything that makes the trip experience more convenient or enjoyable for the participant. Some ideas include luggage, flight booking, recommendations/accommodations for before and after the tour, training courses, etc.

Opportunity to raise cost. Because the price point of RoadRUNNER’s Organized Tours is relatively low, compared to competitors, there is still a chance to raise the product costs in order to generate more revenue.

Threats:

Not Well Known or Easily “Searchable”. While RoadRUNNER Magazine is established in the motorcycle industry, it is not well known that they also offer organized tours. I did an online search for “international motorcycle tour”, “organized motorcycle tour”, and “Europe motorcycle tour” and RoadRUNNER was not on the first page of any of my Google results. 95% of people who do research online will not go to page 2 of their search results. Competing tour operators are getting more business because they are better known and “searchable”.

Limited Variety. Compared to the competition, RoadRUNNER offers a small inventory of tour options.

Highly competitive market. In addition to large tour operators as competition, there are several small, independently owned tour operators. The smaller guys are deteriorating the perception of an “organized tour experience” by not offering the same benefits, but a similar price tag as the larger players.

Technology and the internet make international travel easier for the consumer. Although there are plenty of benefits to taking an organized motorcycle tour, it should also be noted that the internet makes the world a lot smaller and gives consumers better tools to plan their own trips. In the future, marketing efforts will need to do an even better job of communicating the benefits of participating in an organized tour, rather than doing the planning yourself.

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C. Competitive Analysis

I focused this section on Edelweiss Bike Travel, which is the premiere motorcycle tour operator in the world right now and takes up the majority of the market. Additional competitors are listed below for further analysis.

Edelweiss Bike Travel

Edelweiss is the largest and most well known tour operator in the motorcycling industry. They started as a small husband-wife operation in the 1980’s and now offer 61 tours in Europe, North & South America, Africa, and Asia as well as working relationships with BMW, Ducati, and Triumph Motorcycles. They use localized agencies to take care of individual’s travel arrangements. Information about their tours is well organized and easy to find on their website. Here are a few things that make them unique.

• They have a rider reward program, Edelweiss WorldTOURER, which offers repeat customers bike upgrades, extra hotel nights, and discounts on future trips.

• As an additional service to the participant, they offer a Guided City Tour for those who want to arrive a day or two early for their trip and explore places like Munich or Tuscany with the help of a local guide. This service is available on 18 of the Edelweiss Tours.

• They offer motorcycle training courses for the Alps (Germany or Austria) and Off-Road Training (California).

• They have easy-to-use online registration, available 24/7.

Edelweiss Pros: Easy to connect with company, well known brand, easy registration process, large variety of tours, rider reward program, and quality offering of rental bikes. Cons: High price point, no qualification process for tours, not a very personal experience, no financing available.

Ayres Adventures www.ayresadventures.com/

Ad-Mo Tours www.admo-­‐tours.com/

Eagle Rider www.eaglerider.com/motorcycle-­‐tours.aspx

MotoAdventours www.motoadventours.com/

D. Customer Analysis

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1. Potential customers for the RoadRUNNER Organized Tours must be motorcyclists. According to the Motorcycle Industry Council, there are currently around 25 million motorcyclists in the U.S, 20.5 million that ride on-road street motorcycles. Here is the basic demographical information for this market.

• Median Age is 43 • 88% Male, 12% Female • 39%-Single, 59%-Married, 2%-Unspecified • 87% of Motorcycle Riders are white, 4% Black, 3% Hispanic, 4% Asian • Median HHI: $59,290 • Most common occupations: Professional (20%), Student/Unemployed (12%), Laborer (10%),

Retired (10%)

2. Motorcyle Touring Enthusiasts as a select market segments: Most motorcyclists can identify themselves as one of the following: Tourers, Commuters, Cruisers, and Adventure Riders. The most dedicated tourers are considered to be touring enthusiasts. Motorcycle Touring enthusiasts are the target market of RoadRUNNER Magazine. What makes them a viable market for the RR Organized Tours as well is that they take frequent motorcycle trips, they like to travel in groups, and they often travel because of a desire to escape and explore.

3. The Target Market for RoadRUNNER Organized Tours. Here is a breakdown of the target participant.

• Motorcycle touring enthusiast. Must be passionate about motorcycling and identify themselves as a motorcycle tourer. Doesn’t just view motorcycling as a hobby.

• Experienced rider. Must have experience riding for multi-day trips on technically challenging roads. This is especially important to ensure the safety of the participant and the rest of the group.

• Male, U.S. born, between the ages of 40-55. Demographically speaking, this group has the time and financial resources to travel on long distance motorcycle trips. U.S. citizens, in general are more intimidated by international travel, and thus are more likely to be interested in the option of an organized tour.

• HHI income of $100,000 or higher. Although this is higher than the national average for motorcyclists. It is very typical of motorcycle touring enthusiasts. People in this income range are more likely to be able to afford the product line of RoadRUNNER Organized Tours. Also, they are more willing to pay for the convenience of having someone else plan their trip for them.

• Must like group travel. Group travel is not enjoyable for everyone, but it is an important aspect of the organized tour experience. Luckily, camaraderie is a common interest of many motorcyclists, which is why motorcycle rallies, races, and endurance contests are so popular. Bikers like to travel in packs!

MARKETING GOALS

Organization Goal: The main objective of RoadRUNNER’s Organized Tours is to provide customers with one-of-a-kind trip experiences, which will enhance their lives.

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Marketing Goal: The short term marketing goal is to get more participants 1) increase awareness of RoadRUNNER Organized Tours through branding/positioning, 2) increase net revenue, and 3) once profit is more stable, create new tours to add to product inventory.

Product Portfolio and Positioning: RR Organized Tours offers an inventory of guided international tours in some of the world’s most popular motorcycle destinations. RoadRUNNER Magazine is positioned as a resource on everything related to motorcycle travel and thus offering the service of organized tours is a natural extension of their established brand. For the customer, taking a RoadRUNNER Organized Tour has several benefits: 1) the convenience of someone else making travel arrangements ahead of time, 2) less stress or anxiety for first time international travelers, 3) accompaniment by other like-minded people that share the same passion for motorcycles, 4) tour guides that are knowledgeable of the local culture and language and are experienced long distance riders, 5) the chance to ride with one of their favorite personalities from RoadRUNNER Magazine, and 6) having the testimonials from past participants that reassures them the trip will be fun and inspirational! One unique thing that the RoadRUNNER team does is that it qualifies the participants ahead of time. A staff member speaks to the potential participant individually and tells him or her honestly about the technicalities of the roads and riding conditions in the area. This ensures the safety of everyone involved and makes sure there are no surprises for the participants when they arrive.

Unique Value Proposition Statement:

Our team at RoadRUNNER Magazine, an established resource on motorcycle travel, creates personal trip experiences to share with passionate riders.

MARKETING STRATEGY

1) Fill tours to maximum capacity.

2) Enhance the position of RoadRUNNER Organized Tours amongst tour operators.

3) Increase the number of non-RoadRUNNER reader participants by 10%

4) Increase net revenue by increasing the net profit gained from each participant by an average of 10%

MARKETING TACTICS

Each tactic is labeled with a 1,2,3,or 4, which explains which marketing strategy it is associated with.

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PROMOTION

• Use company such as Yodle.com to increase search engine optimization to make RoadRUNNER Organized Tours easier to find online. Outside online marketing companies such as Yodle are able to do the work for businesses with a small staff and will accommodate whatever budget you have available. This seems to be a very necessary expense if RR Organized Tours hopes to reach potential participants who are not already familiar with the magazine. (1,2,3)

• Partner with Victory Motorcycle Manufacturer to co-promote a giveaway for the Autumn Appalachian Tour. The Autumn Appalachian tour is the only U.S. based product and thus makes the most sense logistically for a giveaway. It is also less technically challenging so the qualification of a participant would be less crucial. Partnering with Victory will allow RR Organized Tours to reach their audience, which will include the motorcycle touring market, but will not be limited to RoadRUNNER readers. All promotional materials should link back to the Organized Tours website, giving exposure to the full inventory of tours. People should be able to share the giveaway with their friends through social media. (1,2,3) Pros: Reach a high number of highly interested people, Cons: High opportunity costs

• Create a new logo for RoadRUNNER Organized Tours. The logo should relate to the established brand of RoadRUNNER Magazine but distinguish itself from the publication. The logo should reflect elements from the unique value proposition statement. Keywords: personal, life-changing, travel, group, international, experience, journalist, personality, magazine. (2,3)

• Have Tour Guides use social media to share the trip experience: Tour guides should be active on social media during the trips, by sharing interesting photos and videos through Twitter and Facebook in real time. Social media is a personal way to share the trip experience with large numbers of people at the same time. Example: If in Italy, the tour guide can upload a picture of the “real pizza” everyone had for dinner. Last year, one of our guides got chased by an Alpaca in Peru, and someone took a short video of it. That video clip is the perfect example of the kind of material people find interesting and will share with their family and friends.

• Offer referral incentives. Participants who refer new customers will receive a gift certificate or gift code (for the website) to be used toward a RoadRUNNER Organized Tour or event. Promote the referral incentive on the website and in all promotional material for the tour. Send out an email to participants from past years to let them know about the referral program. (1,2)

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• Offer an incentive to participants who rate their trip experience on TripAdvisor. TripAdvisor is the number one visited travel website in the world. Although word of mouth is most effective, TripAdvisor is the next best thing. For TripAdvisor reviews, participants will receive tangible RoadRUNNER magazine products/subscriptions as incentives rather than discounts to differentiate this offer from the referral program. (1,2,3)

• Create an online advertising campaign on high traffic/ non-commercial motorcycle blogs. Blogs are non competitive with RoadRUNNER magazine and the advertising available is usually low-cost in comparison to traditional run websites. Bloggers do offer unbiased credibility and if advertising is not available, contacting the site administrator about an endorsement deal is not a bad idea. Blogrank compiled a list of the top 25 motorcycle blogs listed by traffic. http://www.invesp.com/blog-rank/motorcycles. The ad should be visually engaging and inspire users to want to travel. Each ad should focus on a specific tour. For example, the online ad could read

PRODUCT

• Create “Add-ons” or “Trip Extras” for the participants. Make them an option as part of the online registration process. Some “Trip Extras” examples: booking the flight for the customer, making hotel reservations for before and after the trip, offering motorcycle training, offering city guides for additional travel days, offering side trips on the rest days. All of the add-ons will incur an extra charge, which the participant will be likely to pay if it increases his or her level of enjoyment or convenience. (1,2,4) Costs and price TBD, but Add-ons will have to increase the profit per participant by an average of 3% in order to meet marketing goals.

• Add online registration to website. Online registration will allow RR Organized Tours to be competitive amongst other tour operators. Other pros are: putting registration online will streamline the process, it will make people more likely to purchase trip add-ons, and it will be more convenient for the customer. The cons are: it will make the experience less personal, it will not give RR staff a chance to qualify the participants. Before registration can go online, the cons will have to be addressed. (2)

• Allow people to finance their tours or create payment plans. When researching motorcycle tour operators, I found that none of the competitors allowed for financing or payment plans. However, outside of the motorcycle industry, paying for your vacation through financing or a payment plan is very common. This service could add convenience to the customer, make the trips more accessible to a wider audience, and help RoadRUNNER distinguish itself from competitors. ( 1,2,3) More research will need

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to be done to determine what all would be involved with this process and we would potentially have to partner with a creditor.

PRICING

• Increase the price of each tour by 7% in 2014 and by 3% annually in subsequent years. The price needs to be increased so that RR is consistent with competitors and also so that they can cover growing overhead costs. (4)

• Create a RoadRUNNER rewards program. Allow participants to enroll in a RoadRUNNER rewards program online, which will work similarly to the way a sky miles program does with the airlines. This will allow customers to identify themselves with the RoadRUNNER brand and the discounts associated with the program will give incentive for repeat participation. Incorporate the new logo in to the reward program for increased branding.

PUBLIC RELATIONS

• Create a promotional video to share online through Youtube, Facebook, Twitter, and Reddit. (1,2,3)

• Approach non-motorcycle travel related publications and websites about reprinting past stories that are already written about areas where there are organized tours. (1,2,3)

• Share testimonials, from past participants, on the RoadRUNNER website and Facebook during early spring when most people are making their travel decisions for the riding season. (1,2)

IMPLEMENTATION AND CONTROL

A. Action Plan The tactics that can be implemented this late in the year, for 2013 tours, will be done so immediately. In the future, promotion and advertising will begin in November, but will be heaviest between January and May. The Peru tour takes place in March, but the European trips are usually scheduled for late summer when the weather is ideal for motorcycle riding.

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B. Budget For the budget for the first year, 20% of revenue from 2013 will be reinvested in to the marketing plan. In following years, anticipate a budget of somewhere around 5-8% of revenue. Some costs I could not determine without being privy to salary information. Other opportunity costs are also approximate. More information is needed to make a complete budget.

Item   Notes   Operating  Costs  Opportunity  

Costs  Promotion/Advertising  Budget              Yodle  Budget  (Search  Engine  Optimization)   $2,000.00  

 Autum  Appalachian  Tour  Promotion  

     

 

participation  for  winner  &  guest  

 $5,000    

 

travel  expenses  for  winner  &  guest   $900.00  

   

promo  ad  space  in  RoadRUNNER  magazine     $2,500    Logo  Design  

 $300.00  

 Online  Advertisements   design     $200.00    

 space  cost     $2,000.00  

 TripAdvisor  Incentives   gift  certificates    

TBD  Referral  Incentives   gift  certificates  

 TBD  

 Promotions/Advertising  Total   $5,400.00   $7,500.00  

Product  Enhancements              Creation  of  the  online  registration  pages  

 TBD   0  

Promo  Text  &  possible  design  elements  for  RoadRUNNER  Rewards  program   TBD   0  

 Product  Enhancements  Total   $0.00   $0.00  

Public  Relations              

Creation  of  promo  video  professional  production  &  voice  overs   $500.00   0.00  

 P.R.  Total   $500.00   $0.00  

                   

Marketing  Budget   $9,600.00  

   

Operating  Costs  (Actual)   $5,900.00  

   Balance   $3,700.00  

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C. Evaluation The performance of this marketing plan will be measured by a comparison of figures from 2012,

2013, and 2014. Here’s what I’ll look at: • Capacity of each tour, how close each tour got to filling max # of spots (for the

tours individually and overall tour program) • Net revenue for the company • Profit per participant (for the tours individually and overall tour program) • Number of participants that are RoadRUNNER readers v. non-readers. (for the

tours individually and overall tour program) • Number of referrals (just 2013 & 2014) • Number of TripAdvisor reviews (just 2013 & 2014)

I also think it’s a good idea to carefully analyze the survey responses from participants to gain insight in to what aspects of the organized tours are most enjoyable and convenient for the customer, and to help hone in on what makes RR Organized Tours unique.