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Case Study: Duffers Cove
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Introduction This case revolves around the definition of a market segment
and operational management that provides customerexperiences required to satisfy the needs of this segment
Students should use a logic model or strategy map to betterunderstand the linkages between outcomes (i.e., meetingcustomer expectations and thus increasing revenue growth)and key operational activities in the organization
Other techniques such as Quality Function Deployment couldalso be used to better articulate the specific linkages betweencustomer experiences and operational management
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OverviewDuffers Cove Golf CourseSituated in a mid-size city
Owned by the municipality as a means of ensuring that residents had access toreasonably priced golf
City council has been considering privatizing the course
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Duffers Cove Golf Course (contd)
Previous GM (10 Years)
approach was to build strong relationships within the city administration to secure
resources when needed (such as additional funding, speedy decisions and so forth)
very successful
contacts at City Hall led directly to tournaments being held at Duffers Cove (agreat way of introducing new golfers to the course)
Current General Manager, Jim Kane
joined Duffers Cove in January of 2006
concerned about privatization
focused on cutting costs in an attempt to increase the year-end surplusfinancial surplus yearly = difficult case for privatization
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Golf Industry industry in the country is steadily growing
Recent studies indicate: there are almost 6 million golfers (participation rate of 21% of the population)
- the highest of any country in the world
participation has grown at a rate of 16% over the past five years
On a region-by-region basis: the region in which Duffers Cove is situated has the highest total number of
golfers
another region has the highest participation rate by population at 29%
The key barrier to golfers taking up the sport was price....
The key driver for participation growth is the expansion of the segment ofthe golfing market known as core golfers.
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Golfer SegmentationCore golfers
play > 8 rounds per year
usually understand how to play the game
enjoy courses offering variety and challenge
Occasional golfers
play 7 or fewer rounds per year
enjoy the game
not necessarily looking for an overly challenging course.
social aspect is often more important
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key barrier to taking up the sport is price
Duffers Cove - low-cost alternative for occasional golfers
Long course with all par 4 holes measuring over 400 yards from the white tees
wide fairways, many sand traps on the course
2004 and 2005 golf course operation reports suggest savings could be realizedthrough reductions in the amount of time spent on maintenance
wide fairways along the course were being made even wider through regulartrimming of the rough lining the fairway
allowing the rough to grow naturally could save hundreds of hours of labour eachseason
from a marketing perspective, he could sub-segment the market to cater to golferswho played approximately 8 to 15 rounds per year
money saved on maintenance => promotional initiatives (an effectivesupplementary tool)
word-of-mouth a key influencer of where golfers played
Golfer Segmentation
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Results - 2006
2005 season was very good
in 2006, the number of golfers was notkeeping pace with 2005
Was a mistake made?
The information provided by the golf pro, Jane
French, seemed to confirm that the addedchallenge provided by the newly grown roughmight be causing issues.
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Duffers Cove Dimensions And Measures In The Data Set
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Duffers Cove Dimensions And Measures In The Data Set
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Discussion Points
Discussion 1
Define the critical outcome for Duffers Cove (DF).
Is revenue more important than profitability?
What trends are evident in revenue and profitability?
What source of revenue appears to be the most
challenged?
How is DF maintaining profitability? Does this approach augur well for their long term
viability?
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Discussion 2
Discuss the targeted market segment.
How would you evaluate the target segmentdefined by the new General Manager?
What do trends in number of golfers suggest?
Are the current operational tactics alignedwith the needs of the segment targeted?
Discussion Points
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Discussion 3
Next steps
Given the conclusions drawn about expectedoutcomes and market segment, what should
the GM do?
Discussion Points
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ConclusionThis case highlights:
linkages between the needs of a market segment and thetypes of experiences provided by a service organization
It also suggests that targeting one segment at the expense of
others might put such an organization in jeopardy Core concepts applied would include:
defining organizational outcomes (i.e., is revenue orprofitability more important?),
the role of external stakeholders (i.e., expectations ofpoliticians), and
buyer behaviour (i.e., the experience expected by corecustomers).