Executive Summary
Tina Diamant and Eileen Walfish, owners and only staff of Artventure Children’s Creative
Art and Party Centre, want to develop a long-term strategic plan that will keep the business profitable and maintain continuous growth. Their objective is to be profitably sustainable with a high quality of service regardless of the increased expenditures and competition lying ahead.
Customer Analysis: Currently, the company targets to four market segments:
1) Jewish families in Cote-Saint-Luc
2) Jewish families in Hampstead
3) Jewish families in Mount Royal
4) Jewish families in Westmount
Alternatives: Three alternatives should be considered based on the business situation:
1) High quality arts programs serving only Jewish children
2) Technological program development
3) A new pricing policy with aggressive promotion schemes and selling tactics
Recommendation: Alternative #3- Attract new customers through different promotion scheme. Since the firm has limited resources, it will use the combined target approach to satisfy the four target markets. This recommendation is a modification of the current marketing plan, with changes to the pricing and promotional techniques. It has the effect of attracting more potential customers and reducing the company’s major competitor to only Childzplay Party Centre through services differentiation. Descriptions of the marketing mix and a proposed timeline, and followed by a break-even analysis and a projected income statement, are included along with the marketing plan.



Introduction
Artventure is a creative and educational centre with a mission to “enhance the creativity and
self-esteem of young children and pre-teens through various activities centring around the arts, as well as entertaining and coordinating children’s birthday parties catering to every parent and child’s needs”. Seeing the arrival of new competitors, Diamant and Walfish believe that they should act to ensure the long-term survival of their company. While operating Artventure for the past year, the owners have been confronted with many decisions concerning the upcoming business year. Problems they face include maximizing profit with limited resources, capturing largest possible market share in the fierce competitive industry, increasing the number of customers from various ethnic groups and introduction of summer camp and other new programs. In the second year of their business, the two owners no longer receive an entrepreneurship subsidy from the provincial government; therefore, they are absolutely on their own. It is vital that they keep their current customers and attract potential new ones, as well as develop a marketing mix that will give them a competitive advantage.
Internal Factors (SWOT)
i) Strengths:
-Company has a positive intention: to provide high quality programs aimed at systematically encourage children to ethically and socially develop.

-Owners are knowledgeable about the market and customers, which enables them to plan ahead to avoid problems and difficulties.

-Company offers a constant variation of non-repetitive programs and various types of party packages to satisfy different customers’ needs.


-Both owners have substantial training in early childhood education and extensive experience working with children.

-Company has developed strong relationships with clients and has earned an excellent reputation within the Jewish community, which will lead to effective and costless word-of-mouth promotion.

-Advantageous and busy traffic location with plenty of parking spaces, making it convenient for parents to drop off and pick up children.

-Sufficient space in the centre to hold large birthday parties.

ii) Weaknesses:
-No previous business management experience, which may lead to poor decisions.

-Decarie Square is not an upscale mall: it has many empty shops and a low flow of customers.

-Establishment of liquidation outlets may attract a lower socio-economic class of people to the mall, making the environment less safe for children.
-Costly and inefficient advertising has been used to attempt to generate awareness.
iii) Opportunities:
-Day camp program has the potential to boost low sales in the June to August season, an innovation allowing the firm to attract more customers.
-The established liquidation outlets may attract new types of customers.
iv) Threats:
- Increase in the number of customers necessitates of hiring employees. If poor employees are hired, service quality will be affected and the company’s reputation will suffer.

-If the Jewish community continues to move out, Artventure’s sales may decline drastically.

-Possible separation of Quebec jeopardizes the business as many English-speaking families will relocate outside of Quebec.
-The opening of Childzplay Party Centre may result in loss of customers.


External Factors (PESTN)
i) Political Environment:
- Government may enforce more rigorous safety requirements, and higher insurance premiums.

- Language regulation for printing bilingual signs and mail will increase administrative costs.

ii) Economic Environment:
- The weak economy lowers the purchasing power of customers, and so wealthy people may not be as willing to spend.

- Interest rates are relatively low, as the federal government wants to boost the economy by increasing consumer spending; having low interest rates encourages spending rather than saving.

iii) Social Environment:
- Increase in the number of working parents raises the demand for children’s centres.

- 95% of customers are Jewish; the presence of one dominant ethnic group may discourage the participation of other groups.

iv) Technological Environment:
- The technological trend encourages the use of Internet websites for advertising.

- Use of mass selling, such as through newspapers and magazine advertisements for promotion.

Competitive Analysis
Currently, Artventure has three direct competitors and one potential competitor:
1) Le Castelet is an artistic-oriented centre that prepares children for entry into primary school. Its programs follow the regular elementary school calendar, which runs from September to June. This centre offers French Language conducted arts programs targeting the francophone market. Also, birthday parties are held for each child member at Le Castelet without charge.
2) Kidnasium Gym & Party Centre is a centre with non-competitive programs for children between the ages of 1 month and 6 years. The facility is divided into an indoor playground and a gym. The centre offers limited numbers of physical programs which require supervision of parents since the gym is high risk for injuries. Two kinds of birthday party are available: playground and gym.
3) Crayons Art & Party Centre is an arts and craft centre. It offers programs to children who are 3 years and up, as well as to adults and seniors. It is a drop-off centre with few scheduled activities. It does not attract birthday party clients since programs have little variation and the centre is small.
4) Childzplay Party Centre would possibly be the greatest threat to Artventure if it opens in October. First, the centre will be located in the same mall as Artventure. Second, it targets children at age 10 and under which is similar to Artventure’s. Childzplay offers numerous attractions such as in-line skating, jewellery making, and live animals. Customers from Artventure may be drawn to the new and various attractions available and shift allegiances.
Consumer Analysis
Currently, Artventure segments the market regionally and ethnically. Potential patrons that
Artventure identifies are families with children between 8 months to 12 years old. Of these families, most parents are highly educated, affluent and have strong interests in recreational activities for their children. The solid reputation that Diamant and Walfish have in the Jewish community makes up the segmentation to be the Jewish community in each of the four areas a natural choice (see Appendix B).
1) Cote-Saint-Luc has the largest child population and is dominated by people whose native language is English. Of the total population, 65% are Jewish. Although this may seem to be a profitable market, the weakness of this area is that median family income is quite low. Factoring in the estimated numbers of children in each family, it can be determined that on average, people in Cote-Saint-Luc have weak spending power.
2) Hampstead has the second largest Jewish community, with 71% of the children in the area being Jewish. Most people in the area are very wealthy, which is indicated by the high median family income. The strong purchasing power and great numbers of Jewish children cause the city to be a profitable market for Artventure.
3) Westmount is a large segmented market with a high population; however, it contains only 4,345 Jewish people, 21% of the total population. Nevertheless, in Westmount most family income are over $100,000. Families in this area have strong purchasing power.
4) Mount Royal has a high median family income and child population, but only 14% of its residents are Jewish. The great numbers of francophones in the area limit the number of customers for Artventure, as programs are conducted in English.
Alternatives
1) Status quo: High quality arts programs serving only Jewish children
Positioning Strategy: A high quality Jewish-oriented children’s centre that enhances children’s growth through wide variety of arts-related programs.
Although this strategy may sound passive, it is better for the owners to do what they are best at and know best. As Diamant and Wilfish have already captured a group of loyal customers and have built a strong reputation in the Jewish community, sales will gradually increase, as will break-even and profits in the upcoming years (see Appendix D). It is more profitable to target only the Jewish community because promotion can be concentrated to these groups of buyers which will be more effective, and the company can satisfy customers’ needs better as their backgrounds and habits are somewhat similar. And as parents are impressed with the unique programs, they will promote the company to friends by word-of-mouth, the most effective promotional tactic. The disadvantages of this alternative are that it needs a long time to be profitable. Since the targeted group is Jewish, sales are heavily dependent on it. If the Jewish community continues to shrink, sales will drastically decline. Also, it is hard to boost the sales during the summer months with arts programs. The limited knowledge owners have of other activities such as day-camp, and soccer hinder the company from expanding.
2) Technological program development with a penetration pricing policy
Positioning Strategy: Be the trend leader for children’s centres and benefit from being first mover, the company will strive to attract patrons with high-tech programs.
Artventure can drive off all potential competitors by offering new and innovative technological programs that none of the other centres have developed and thus results in market dominance. In the short run, the plan is feasible to implement since no competitors offer computer programs; Artventure can benefit in as a first mover and earn high profits. Nevertheless, as technologically-oriented programs become common, a fierce price war will take place and drive down prices. Also, if computer programs are introduced, the centre will almost inevitably become a game arcade, which is opposed to the owners’ primary intention. In the worst scenario, loyal customers will be lost. Extra costs will be incurred for new program equipment and change of the company’s name (as Artventure will no longer be appropriate). Finally, this alternative is risky and costly, and does not provide sustainable profitability: it will suffer a severe loss in the long run, as shown in Appendix E.
3) A New pricing policy with aggressive promotion schemes and selling tactics
Positioning Strategy: To be recognized as a popular children’s centre that provides diverse programs at the best possible prices with highest quality.
Various price adjustment strategies will be used: cash discounts, promotional pricing, and seasonal sales to a capture larger market share and boost sales, especially in the low demand season. Since new programs will constantly be introduced, these pricing strategies can also act as promotions. New markets must be captured as the current targeted segments are too narrow. An aggressive promotional selling approach will surely capture new segment markets such as people who do not travel during summer. Examples of aggressive promotion are advertising on family TV channels, speaking in preschools and elementary schools, and offering discount and coverage for Artventure programs in employee fringe benefits. As the company becomes well-known, promotion can be reduced. Although Artventure may incur losses in the short run, this strategy, along with the high quality of services, will guarantee profits and continuous growth in the long-term (see Appendix F). The weaknesses of this alternative are that it is costly to implement promotions at the beginning when financial resources are limited, and the business
Recommendations
Alternative #3 is preferred since it best achieves the objectives of the owners. With the help of
an effective marketing mix, this alternative will have a broader consumer base that will attract customers due to Artventure’s superior quality of services.
i) Product:
The objective is to foster children’s intellectual growth, self-esteem and skills through a
variety of activities. To do so, numerous programs are introduced according to consumers’ preferences. However, Dancing Mania and Children’s Birthday Parties should be basic as they are major income generators. In order for parents to see such services as necessities, it is important to pay attention not only to the programs, but also to the complete package. This includes having a good flow of communication between customers and owners, promoting a friendly and fun atmosphere, and operating a gift shop for parents who are waiting for their children. The gift shop will sell photo frames, birthday cards, art materials, videos of children’s performances and birthday parties, and snack food. Although it will require at least 1 extra staff member to operate the shop, it will generate a higher profit margin and help promote the Artventure brand.
ii) Place/ Distribution:
The objective is to provide a convenient, safe and spacious learning environment for children.
The location of Artventure should be where there is a high flow of children and parents. Decarie Square is an undesirable place as the opening of liquidation outlets will cause a high flow of lower income families in the mall but will also increase in the level of danger due to the increase in the number of cars and people. The opening of Childzplay Centre in the square puts Artventure to disadvantage; therefore, a new and larger location is desired to avoid head-on competition as well as provided the needed space for the company’s expansion. Also, the purchase of a van to pick up and drop off children when parents are unavailable to do so can improve the company’s revenue and increase exposure.
iii) Promotion:
The objectives are to inform parents that Artventure is the best children’s program centre and
to stimulate children’s desire and interest in the activities. Ways for the company to invest in sales include mass selling, personal selling and sales promotion. The owners may want to advertise on family TV channels and in The Suburban weekly newspaper (as it is the local paper with highest circulation). They may also speak and have booths in elementary schools and preschools to attract ethnically diverse parents. With personal selling, owners will better understand market needs and demands, leading to improved sales. As well, Artventure should try to list its services as a fringe benefit option for employees in different firms. This requires substantial negotiation and commitment, yet, it can give a competitive advantage to Artventure as employees will choose the centre as their first priority since the fee is already partly covered in their fringe benefits. Such tactics will result in a larger market share and increased profits. Likewise, the use of word-of-mouth promotion to generate awareness and the establishment of a website to inform and attract potential customers are successful and persuasive selling methods.
iv) Price:
The objective is to be competitive and flexible in pricing to accommodate the different target
markets. The firm will set prices at a 15% - 30% markup, but will offer variety of special discounts. There will be cash discounts to encourage people to pay cash to avoid service charges from banks; promotional pricing will be at 10% off for new programs during the first month to attract customers; seasonal sales will be offered during summer to boost the low demand; and 5% discount for early bird or people who bring in a friend. Although these discounts will lower the company’s profit, it should offer discounts to gain more customers and eventually earn a higher income as the number of participants increase.
Conclusion
Artventure has great potential to be profitable and popular; however, it will require some time
and effort before the company can successfully further penetrate the market. By implementing the price adjustment strategies and aggressive promotion schemes described in the above analysis, sales will surely grow and the business will be prosperous.
Timeline
Implementation follows planning the marketing mix. A contingency plan with details is
shown in Appendix G. If the business or industrial situation changes, a new marketing strategy should be considered. Nevertheless, the recommended marketing plan is relevant as the company remains optimistic about the general economy and the industry.

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