Bird in the Hand Enterprises

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Henigman had invested $4600 in developing the Vancouver guidebook – and most of that cost was in securing images and illustrations ($3,000) and research ($1,000), with $600 allocated to direct selling expenses (mainly gasoline) for calling on store managers. He did not account for any of his own time in these costs, but estimated he had put about 250 hours into the project. Variable costs (production costs) were $3.00 a book based on a production volume of 5,000 units. Henigman had to pay for all of these books upfront (the cost per book was much higher on lower production runs) but he considered the production costs to be variable costs for the purpose of calculating break-even.

The Victoria-Nanaimo Product

During the initial development of the Victoria-Nanaimo guidebook Henigman sought feedback from a convenience sample of about 100 prospective customers who were intercepted, and interviewed by Henigman at various malls and within nature groups / associations around Victoria and Nanaimo. He showed the respondents a prototype of the guidebook, sought feedback on the title, cover image, binding, and content of the book, and updated the prototype three times based on this feedback. The current version of the guidebook prototype (Figure 2) is based on the lessons of the Vancouver guidebook and the survey information and incorporates: a spiral binding that is less prone to breaking, is easier to work with, and accommodates updates; makes greater use of colour images; and has a greater range and more details on plants, animals, and sights users will find on the walks or hikes featured in the book. The Victoria-Nanaimo guidebook is currently 85 pages in length.

Henigman has invested $5,000 to get the Victoria-Nanaimo guidebook to its current stage of development. To complete the guidebook Henigman still needed to develop the final draft, including all of the needed photographs and information; develop and implement a detailed marketing plan (and estimate a three year budget and sales forecast), and arrange for the printing and distribution of the guide books. He estimates another $4,000 is needed to get the book ready for printing. He has this $4,000 plus another $5,000 that he could commit to the project, but after that other funding sources would be needed.

Based on the survey feedback, Henigman thought that the Victoria-Nanaimo guidebook could retail for as much as $17.00 although the majority (53%) of respondents indicated that they thought the product should retail for $13.00 to $14.99 (see Figure 1). Other feedback focused on the title of the book, which some respondents thought was a bit too “technical.” Cost of production (printing) varies enormously with the quantity printed. Henigman plans to initially print 1000 guidebooks at about $7.00 per book and will market them to test market demand. With good market response he will print another 3000 guidebooks at a unit cost of about $3.75.

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Competition

Tour guides to natural sites and landscapes in North America are uncommon and Henigman thought that the available publications and education programs do not offer the educational and recreational information provided by BHE guidebooks. There is one privately published guide of the Vancouver Island area but it does not provide people with ecosystem information and directions to sites that can easily be visited. There are 3 or 4 other guides for exploring natural areas, but they do not offer specific sites to visit, or do not offer sites that could easily be visited locally. Those few books (3 or 4) that do describe ecosystems do not provide information around specific cities and are written in textbook format. There are 5 or 6 guides for walks or hikes but they do not offer any organized ecosystem information with the walks, or they involve hikes that are in excess of what most tourists or casual walkers could undertake. Some guides help to identify plants and animals but they do not offer much information on ecosystems or sites to visit.

Conclusion

Sitting on his back deck in Victoria, Henigman wondered what recommendations the UVic students would come up with. He was open to changing anything in his current plans to best assure a profitable venture.

TASK:

- Identify the strategic issues facing Henigman (create a SWOT summary)

- Determine what market(s) you want to compete in and segment that market.

- Select a primary target market for Bird in the Hand

- Determine an appropriate positioning for Bird in the Hand for that target market

- HAND IN your recommendations for product objectives/policy, product concept and branding decisions. Provide rationale where possible. Keep a copy to discuss in class.

Figure 1: The Vancouver Guide Book

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Figure 2: The proposed Victoria-Nanaimo Guide Book

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