Company & Market Analysis

Boatbuilding Industry Findings:

Several key facts may be identified within the boatbuilding sector, including the overall
expenditures attained in the year 2016, the sales share of luxury boat segments, and the precise
details pertaining to the product offerings.
● The total spending on the boat and accessory market in the United States in 2016 was
$35.9 billion, which corresponds to the sale of roughly 238,000 new powerboats and
958,000 used boats.
● Only 5% of new powerboats delivered in 2016 were luxury boats (yachts longer than 26
feet), but they were responsible for approximately 38% of the $17.4 billion in new boat
sales. Although sales of this boat decreased by 12%, it can be said that they were cyclical
and in line with the state of the economy as a whole.
● In the luxury boat segment, the majority of the boats were custom-built. Sailboats make
up half of those boats, while the remaining half are powered by diesel and gasoline.
When it comes to the hull style, the interior, and the navigation system of the boat, buyers
have a variety of alternatives to select from. The cost of a luxury yacht starts at $300,000
and goes up from there (an estimate of $20,000 per foot of a boat with common
facilities).

Competition Analysis:

It is apparent that two national boatbuilders and one-man shops are hosting the competition
to Magellan Boatworks. The boat business is fragmented, and the main rivals are spread out
over the country.

● Since 95% of luxury boats are made domestically, the boating sector is fragmented, with
over $3,000 boatbuilders countrywide.
● Magellan Boatworks competes with two national boatbuilders, Beneteau (located in
South Carolina) and Hinckley (headquartered in Maine), as well as one-man enterprises
who offer lower prices and produce 2-3 boats annually. These businesses produced 500
boats annually in a variety of price points and values that appeal to more traditional
purchasers.
● A lot of builders provide extra services including maintenance, docking, and storage.
Customers frequently place value on brand names and pay close attention to the boat's
interior features.

Current Product Strategy Critique:

 ● The hull's flawed design. The current design sacrificed interior room in order to offer a
narrower beam and a "faster look" for the boat. This flaw makes Magellan boats less
competitive with companies that promise "spacious luxury" as a distinguishing quality.
By sacrificing the appearance for internal space when it could be balanced to appeal to a
wider range of customers, Magellan is losing out on potential customers
● Magellan Boatworks offers interior options and equipment that are comparable to those
of its rivals in the market. Magellan should strive to offer distinctive products and
services that are not offered in the competitive market in order to compete with other
businesses on the market.

Current Pricing Strategy Critique:

● One of the pricing strategy's flaws is a poor standard pricing structure that forces
salespeople to lower their commissions if consumers want to haggle over the price. This
can deter salespeople from haggling since they want to maintain their commission, even
if it means losing a potential client.
● There is no formal financing system. If Magellan Boatwork offered readily available
financing options, they might be able to convert more potential customers. If they don't
provide financing choices on-site, potential purchasers may decide against buying
Magellan because it's a high-risk investment. Customers might typically choose another
establishment if it offers this choice. Additionally, if a buyer must go elsewhere for
financing sources, they can be discouraged from buying at Magellan, or the buying
process might be slowed down.

Current Promotion Strategy Critique:

● Use of "product-centered" advertising is the first criticism. Magellan Boatworks uses

feature traits to attract customers, but given the fierce rivalry in the industry, some of its
rivals may be able to offer amenities that Magellan does not, such as a roomier interior.
Magellan must offer a product that is superior than that of the competitors if it is to be
successful in this advertising approach. Therefore, it might be more effective to design
commercials that employ strategies to persuade people that Magellan boats are able to
satisfy all of their needs. The experience that Magellan's boats offer to customers should
become their primary concern.
● Magellan Boatworks faces difficulties with media placement and determining the
financial viability of various media venues. The company was unable to adequately track
where the majority of prospects come from and how money should be distributed across
various media vehicles, as was evident from the case circumstances. Lack of information
regarding which media generates the most sales results in an unfair distribution of
marketing budget to the incorrect media. As a result, the business experiences financial
losses and fails to communicate its brand's message to customers.
Current Distribution Strategy Critique:

Critique 1: Boat displaying procedures were inconsistent (at the initial meeting stage). As can
be seen from the example, there was no standard procedure or set of guidelines for presenting the
boat at the first meeting. The most effective salesmen met potential customers on a model boat,
which helped them turn prospects into purchasers; other salespeople did not adhere to the same
method. In the distribution process, the way the product, in this example, the boat, is displayed is
crucial since it has the power to either appeal to or repel potential customers. Magellan
Boatworks should set up its displaying process so that each salesperson adheres to a certain
protocol that best illustrates the product.

Critique 2: Clients who are unable to secure a loan on their own are lost due to a lack of
established ties with financial institutions (partners). A final 15% down payment and
documentation of financing are needed. Since Magellan Boatworks does not collaborate with any
financial institutions to offer financing alternatives, customers may find it challenging to secure
financing on their own and decide not to proceed with the purchase if their efforts are
unsuccessful.

Internal Factors Strengths (S) Weakness (W)

● High-quality product with ● Poor staff

environmentally friendly options training/organisation
● Competent and committed sales ● Small product line
personal ● The shortfall of
● Strong online presence financing options

External Factors Opportunities (O) Threats (T)

● Growth of customer segment ● Change in taxation by

● Geographical expansion U.S. Federal Reserve
● The development of new ● Political instability
technologies ● Competition in the
market

SWOT Conclusions:

Strengths Conclusion: Magellan's boats provide a high-quality product that distinguishes out
because of its modern fibreglass hull designs and opulent interior. The yacht also has pull-down
mattresses, air conditioning, navigational equipment, teak flooring, and hot showers. Its hull
shape offers stability in choppy conditions and at faster speeds. Additionally, Magellan unveiled
the DreamScape 49, a new model with an improved, environmentally friendly diesel engine.
Magellan has a significant internet presence through their website, which includes details on its
main models, available bespoke designs, and contact information for scheduling appointments
with salespeople. Prospective consumers might find links to websites through advertisements,
marketing materials, and Google Internet searches. Finally, Magellan employs salespeople who
are capable and dedicated. They all have college degrees, flourishing sales professions, and a
love of sailing and the outdoors.

Weakness Conclusion: It is apparent that Magellan Boatworks' sales staff have not obtained the
necessary training. Despite coming from various sales-related backgrounds, it appears that all
salesmen have a similar love for the boating sector. As a result, some salespeople are more
successful at converting leads than others. In order to guarantee that all employees are upholding
organisational standards, Magellan should conduct training for the staff and set protocols that
each employee should adhere to. Furthermore, Magellan Boatworks primarily concentrates on
the luxury yacht market share. Additionally, the luxury market has seen sales decrease by around
12%, which might have been detrimental to the firm. Magellan might increase sales by
diversifying its product line. The lack of a well-established system of financing choices on-site is
a major problem affecting sales and occasionally discouraging clients from making purchases.
No financing solutions might be offered to finalise the deal instantly; Magellan only offers
recommendations. It slows down the transaction's completion and deters certain purchasers.

Opportunities Conclusion: Magellan Boatworks only sells boats to a specific demographic;

thus, this area has room for growth. Magellan might broaden its target market and choose an
additional underrepresented niche market, such as environmentally minded shoppers. On the
southern coast of the United States, Magellan is only present in five areas; however, it may
eventually move its activities there. Last but not least, Magellan could create more efficient and
ecologically friendly boats thanks to the development of new sustainable technology. Magellan
already built more environmentally friendly diesel engines, so they could continue along the path
of providing sustainable products to appeal to a larger audience.

Threats Conclusion: The U.S. Reserve may decide to adopt a prospective change in taxes,
which would raise interest rates. In addition, there is political unrest as a result of the contentious
presidential election, which might result in a variety of lawmaker changes and economic
uncertainty. Last but not least, two other national manufacturers compete with Magellan
Boatworks by providing some amenities that Magellan does not. One-man shops that provide
customised boats at reduced prices also present competition.

Proposed marketing communication strategy

Communication Objective: The main objective of our communication strategy is to generate
demand for our product by advertising our boats as a path and means to fuel consumers' passion
for adventures and experiencing new journeys in the ocean. In addition to this we want to
strengthen and expand the recognition of our brand. Our objective is to appeal to a wider range
of consumers than Magellan, which historically only targeted a select group of customers.

Decision-Making Outline: In addition to the communication strategy, advertising that will

emphasize that our boats are built to take you on an adventure would help. Moreover using
modes such as television and social media ads help to provoke an effective feel response in our
consumers. Further setting up a meeting with our salesperson through personal selling tactics to
learn about the features and advantages of our boats would increase clarity. Social media
advertisements compare us to competing businesses, emphasize our superiority, and foster two-
way interaction with consumers. The final two steps—purchase decision, post purchase
evaluation—will be accomplished through sales promotions that encourage clients to do so. Our
sales representatives will send a personalized thank-you card via mail along with an email
satisfaction survey when the sale is complete.

Here, we give the various stages involved in the decision making process, proposed media
vehicle and a short description along with the type of response.

Decision-Making Stage Proposed Media Vehicle & Type of response

ShortDescription

Problem Recognition Print media helps to Affective (Print media)

establish brand trust and gives Behavioral (Search
customers sensory input, advertising)
increasing the likelihood of
remembering the business and
the brand.
It also increases the
awareness of consumers in
Magellan’s luxury boats,
highlights their features.
Utilizing search advertising
will prompt consumers to
actively seek out our boats.
By following a direct link to
our website, they can
seamlessly access product
details and arrange meetings
with our sales team.
Information search Social media Behavioral
Engaging content and visuals
can showcase brand
uniqueness, craftsmanship,
and experiences. Direct
interactions enable real-time
queries, fostering deeper
insights into products,
enhancing brand reputation,
and attracting a discerning
customer base.

Evaluation of alternatives Personal selling is essential Cognitive

for luxury yacht producers. A
professional sales team can
answer particular questions,
give individualized
information, and draw
attention to the tiny details
that characterize the brand's
brilliance. This one-on-one
interaction produces a tailored
experience, inspires trust, and
heightens the attraction of
owning a luxury yacht.

Purchase decision Sales promotion Behavioral

Limited-time offers, exclusive
deals, or bundled packages
can entice potential
customers, creating a sense of
value and urgency. This
approach encourages them to
take action and experience the
premium features and
craftsmanship that define the
brand's luxury boats. Offering
incentives such as extended
warranty, reduced docking
fees, a discount on the
purchase would greatly help.

Post-purchase assessment Direct Marketing Affective

Prospective customers can
receive individualized
information about the boats
 through personalized emails,
catalogs, or brochures. This
one-on-one relationship
created by direct
communication effectively
highlights the brand's
distinctive attributes and
piques curiosity in the opulent
boating experience.

Market:

Consumer’s profile : Customers at Magellan Boatwork can be categorized as recent retirees or

nearly retired business owners (63% of customers), who are between the ages of 55 and 70, are
primarily found in coastal regions (the Southeast, the Mid-Atlantic, the Northeast, and some
customers are also found in the Midwest), and who have a college degree (25% of whom have
postgraduate degrees.Consumers in this category are not price sensitive since they earn over
$150,000 and have a net worth of over $1 million. Successful, very active people who frequently
own a second home or holiday property near the shore fit the physiographic description. These
consumers have the tendency to enjoy luxury travel, adore the ocean, and look for adventures.
The majority of consumers place a high value on warranties, interior options, outside design, and
product quality. Personal selling with a personal touch is the preferred technique of shopping. I
think Magellan Boatwork should instead focus on expanding its target market rather than
narrowing it. According to the market data, sales of luxury boats were falling by around 12%;
but, since 2012, they appear to have begun climbing again as more retirees began to feel more at
ease making significant, high-engagement purchases. I think Magellan might broaden its target
market to include businesspeople who aren't afraid to take chances and boost the company's
earnings. Targeting risk-taking entrepreneurs may be a smart idea because they may be less
susceptible to fluctuations in the economy.

Audience: Opting for tailored marketing with sponsored, targeted adverts that will focus on our
audience based on their web browsing habits and personal preferences. We want to modify and
personalize our ads because we are using them to reach a very odd group of wealthy consumers
who are retired or almost retired and risk-taking entrepreneurs. Additionally, we want to
underline the benefits of boat ownership in terms of improved lifestyle and access to new
experiences. As a result, we want to communicate directly to customers to make sure that the
right individual receives our message.
Message: The current message from Magellan Boatworks has to be changed because it simply
highlights the boat's characteristics, design, and aesthetic appeal rather than appealing to
customers' feelings and emotions.

Recommendation : Put strong emphasis on appealing to consumers' emotions and discuss how
our boats would improve customers' lifestyles and provide them more adventures in life.Our
boats will significantly alter the lives and lifestyles of our target customers, who are either risk-
takers or retired company owners. Additionally, getting a brand-new luxury boat will give them
flexibility and opportunity to travel by boat to enjoy the ocean and other aspects of life. Also
emphasize to senior customers that buying a yacht is only the beginning of their finest life.
"Freedom is only an anchor away" will be our tagline, and it sums up our belief in the advantages
our boats will offer customers wonderfully. The story we want to convey will emphasize the
freedom and adventure that our boats could bring rather than emphasizing the boat's attributes.
We want to illustrate the struggle between good and evil in the story we want to write for a TV
commercial and YouTube commercials. The audience's mental image of a pirate ship is that of
an ancient wooden ship, thus we would like to add pirates aboard it, perhaps seven of them. Once
the ship docks, the pirates spend some time in a nearby pub where they spy a beautiful woman
and attempt to capture her in order to bring her aboard the ship. In order to chase the pirates, our
main character—who will be playing the part of one of our customers—will hastily board our
sleek, quick boat (at this point, brand name should be shown on the side of the boat). With the
help of our "speedy" boat, he will quickly reach them, leap to the pirate ship, and save the lady
from harm. The phrase "Freedom is only an anchor away" and the name Magellan Boatworks
will be displayed at the end of the advertisement. With this advertisement, we hope to make the
point that our boats are built for exploration and adventures, which will help you escape the
monotony of daily life. The protagonist of this tale is a man between the ages of 5 and 60 who
will be mimicking our customers. The main conflict will be the chase, which will highlight our
boat's strengths and its rapid speed.

Appeal : The use of humor will be appropriate. As we are not emphasizing selling the boat's
qualities but rather emphasizing selling the lifestyle and adventures that it would bring into
clients' lives, the communication has to be light and not heavy on the information. A joke along
the lines of "A bad day sailing on "Boat Name" is better than a good day at work" will work well
given we are aiming at either retired business owners or entrepreneurs. It would not only make
customers happy but also underscore the main reason they buy our boats: to begin a new life that
is very different from their current one and embark on a new adventure (for retired customers).
Entrepreneurs frequently work remotely and with flexible hours, so why not spend some time on
a boat exploring the ocean? This may also encourage them to think about buying a boat.

Media:
Proposed Media Mix :
The findings from the quantitative analysis suggest the need for significant adjustments to our
current media mix. It's evident that regional magazine advertising has proven to be both costly
and ineffective in terms of generating prospects and sales. Over the years, this medium has
consistently produced the fewest prospects, with high associated costs. The conversion rates have
also been disappointing, with only a limited number of sales achieved, all at a notable expense.

Given these insights, it would be wise to reconsider the allocation of funds to local magazine
advertising and similar formats, such as local print ads. These traditional print media channels
appear to be losing traction with potential customers and have failed to attract new clients as
desired. Reducing expenditure on these aging mediums is recommended, freeing up resources for
more promising avenues.

Furthermore, the budget dedicated to new boat displays is relatively substantial; however, the
conversion rates have remained only average and the costs per transaction quite high. The
declining trend in conversion rates over time, coupled with the comparably lower cost and
similar conversion rates of direct mail, suggests the need to scale back the budget for new boat
displays.

It's also advisable to reevaluate certain events that have generated minimal leads and sales,
considering their potential removal from the schedule. On the contrary, participating in boat
shows should be maintained to enhance brand recognition.

In contrast, media vehicles like print advertising, search advertising, and the captain's catalog
have demonstrated their effectiveness with the highest conversion levels. While cocktail parties
hosted on Magellan boats have seen a decline in sales and elevated costs per sale and per
prospect, trimming the budget for this type of event seems reasonable.

Captain's catalog and search engine advertising stand out for their cost-effectiveness in terms of
both prospects and sales. Although print advertising boasts impressive conversion rates, the costs
per lead and sale are comparable to other print media, prompting a suggestion to reduce spending
on all print media channels. Instead, the focus should shift toward digital marketing strategies
and the captain's catalog, both of which appear to attract more customers effectively.

In summary, based on the analysis, the top priority media choices for Magellan Boatworks are
the Captain's Catalog, Search Advertising, Direct Mail, Print Advertising, and New Boat
Exhibitions.

Money:
Budget Analysis :
After reviewing the current budget for sales, advertising, and promotions for 2017, we can
conclude that the planned budget is insufficient for the marketing work . As can be seen from a
pie chart that shows the amount of money allocated to each media vehicle in 2017, regional print
advertising and regional magazines account for 9% of the media budget yet have a low prospect-
to-sale conversion rate. As a result, it is advised to keep budgets for both types at 1%.
Additionally, print advertising accounts for the largest portion of the budget (34%) but has a low
conversion rate and may be scaled back to 12%. Direct mail, Google search ads, and Captain's
Catalog, on the other hand, have the highest conversion rates and their budgets might be boosted.
We need to start creating an online presence as well, and our brands should be simple to find
online, particularly as we strive to target a new sector of consumers—entrepreneurs. As a result,
we recommend raising the budgets for Captain's Catalog, direct marketing, and Search - Google
Ads to 21%, 18%, and 26%, respectively. Spending on new boat displays should also be cut back
to 14% because the average conversion rate comes at a high price of $160 per sale. Cocktail
parties on Magellan boats generated a fall in revenue in 2016; as a result, it should be decreased
and brought to 7%.

Proposed Method :
We recommend adopting the aim and task method of bottom-up budgeting.Our marketing plan
states that the budget and the activity should match. Since we are attempting to concentrate on
the experiences that potential customers would have on board our boats, we first need to
establish marketing communications objectives. Then, the goals would be attained by a number
of initiatives and the placement of advertisements through various media vehicles. The following
budget allocation was made after considering the costs related to each media vehicle: Captain's
Catalog - 26%, Search - google ads - 21%, direct mail - 18%, new boat exhibitions - 14%, print
advertising - 12%, cocktail parties on Magellan boats - 7%, regional magazines - 1%, and local
print - 1%. The executive team's permission will be required as the following stage.

Measurement :

Marketing Metrics: In accordance with the suggested media mix, priority should be given to
those media channels, such as the Captain's catalog, search advertising, direct mail, print
advertising, and new boat displays, that would be most successful in helping us achieve our
marketing communication strategy's objectives. To examine if the intended segment was reached
by each of these media types and the effective reach rates, effective reach measure is needed for
each of them. In order to determine how frequently we should run our advertisements in both
printed forms, such as Captain's catalog and print ads, frequency measure should be done for
both vehicles. To determine the attendance at new boat displays, number of impressions can be
gauged. In order to know which emails were opened and ultimately resulted in a sale, we can
evaluate the open rates for our direct marketing. To assess how frequently customers clicked on
call-to-action links, the click-through rate for search advertising and direct marketing would be
measured. Changes in brand awareness, attitudes, likes, and preferences across all media
platforms in order to gauge the effectiveness of a message needs to be tracked.We can also
analyze the effectiveness of Google advertisements by using automated copy testing.
Additionally, after running ads in print advertising and via Captain's Catalog, employ sales copy
testing to gauge the performance of the advertisement based on the quantity of revenue generated
by the target market. The quantity of fresh leads and clients who were referred after the
exhibition's conclusion should also be considered when assessing the effectiveness of new boat
exhibitions. Last but not least, A/B testing can be conducted for utilizing various direct mail
postcard types, various presentations of the same offer variables, and control group tests using
already-running and previous campaigns.