Solution of Perth Zoo Case Study with Experts’ Feedback

Synopsis of Perth Zoo Case Study

This case is a good example of a not-for-profit service organization, and the opportunities and problems such an organization face.  It deals with issue surrounding selection of target markets, relationship marketing, getting repeat patronage, generic competition and issues that are like many private sector firms – goods or services.

The difference is in the characteristics of the services, and how these impact on the tactical and strategic solutions.

Discussion Questions

1. What is distinctive about non-profit marketing in contrast to for-profit services marketing, as portrayed in this case?

Essentially the number of market segments in not-for-profit marketing is greater and more diverse than for-profit firms. Not–for–profit organizations need to “market” their organization to other groups or publics beyond customers.

In the case of the Zoo, examples of critical markets beyond visitors (customers) are sponsors (e.g. of specific exhibits) and docents (volunteers). In addition, the Zoo’s mission and objectives are beyond the typical “addressing the customers’ needs” “offering high quality customer service” or “offering the best value for money”.

The longer-term objectives of the community, particularly with respect to education, research and conservation, necessarily need to be balanced with the immediate needs of the customer.

2. What are the key problems and opportunities faced by Perth Zoo?

The new direction that the Zoo management has taken (i.e. refocusing from a operations perspective to a more visitor-oriented approach) gives a strong base for a future that will balance the various objectives discussed (including education, conservation and research as well as visitor numbers).

Opportunities that arise from this foundation include the integration of the traditional function of the Zoo (seeing the animals/education) with a more entertainment perspective. Even small initiations, such as feeding the animals while visitors are present.

Or viewing nocturnal animals when it is dusk and when they are active, both formerly discouraged by zookeepers, are strong attractions for visitors. Concepts such as Zoo twilights which include concerts, “Wild Sex” tours, film festivals, carols by candlelight and major summer exhibitions (e.g. Zoorassic Park) are clearly in line with a more entertainment focus.

Opportunities in Perth Zoo Case Study

Opportunities exist for increasing visitor numbers through other forms of entertainment, which may also be offered beyond the traditional opening hours.

Further opportunities lie in maintaining the originality of the product through offering variety in the animals exhibited. Opportunities lie in exchanging animals with other zoos and accepting that some animals, which may have no conservation value, but which attract visitors (such as Chester, the White Tiger) are used for revenue purposes.

That is, such animals to an extent may underwrite the conservation costs of others. Outsourcing of the cafeteria and ground admissions has enabled a greater degree of efficiency and service quality. Further links with other key strategic partners need to be considered.

Other opportunities:

  • Making the visitor experience interactive
  • Further development of the corporate market
  • Gaining more sponsors
  • Further improving the image of the Zoo, especially among teachers and school students, who represent the future both in terms of their attitudes to animal conservation as well as in terms of their repeat visits when at a different lifecycle stage (see Q6).
Problems in Perth Zoo Case Study:
  • Constraints in terms of expansion
  • Zoo still viewed largely as a ‘family day out’
  • Poor animal visibility in some cases
  • Greater competition – e.g. from sporting activities both live and on television
  • Financial fluctuations in Asian economy
  • Competition for sponsorship dollars – e.g. Olympics
3. What products are offered at the Zoo? What is the core product, what are the supplementary products that broaden the appeal?
And what are the resource attracting products that support the expenses of the core product?

The core is the main reason for being a business. In the case of the Zoo, it is essentially a fun day (or evening) out with some educational value added.

Supplementary services can be divided into 2 groups:

  • Facilitating services (and goods), which make it possible for the customers to use the core service. An example in the case of the Zoo are the cashier service (ground admissions); maintenance and security services, toilets and basic food and drink
  • Supporting services, which are used to create or add value to a service. There are many in the case of the Zoo, including the café, maps and information given to visitors, and the retail shop.

In addition, students can argue that there are facilitating and supporting services for specific target groups, for example the function Centre and restaurant are facilitating services in the case of the corporate market (who use the Zoo for functions, conferences and special events).

Resource attracting products are designed to bring in resources that support the expenses of the core product. These include the volunteer program, which minimizes the cost of the service they provide, sponsorships of the Zoo itself, exhibits, animals and events and any supporting service (listed above) that is run to make money.

4. How can the Zoo’s performance be measured? Why did you choose these measures?

The Zoo already measures its performance in terms of admissions (i.e. visitor numbers) in particular. The Zoo management are very aware of changes in visitor numbers over the years, as well as associated revenue. In addition, sponsorships, donations and retail sales are monitored.

However, it is not visitor numbers which generate word-of-mouth and repeat visits but visitor attitudes, essentially what they take away. It is therefore also important to understand visitors’ perceptions in terms of important outcome (conclusive) variables such as perceptions of value-for-money, quality of service and educational experience, which are all evaluated through the regular market research study.

Other less direct measures of success include the ability to attract exciting new exhibits (e.g. exchange with another zoo. Both the White Tiger and chimpanzees have been exchanged with other zoos). Currently the Zoo is negotiating to loan Pandas from China. Another indirect measure of the Zoo’s success is the number and quality of docents.

5. What target markets does the Zoo serve? What conflicts might arise in serving these quite different target groups? How does the Zoo manage this?

Target markets include school groups, families, teens and young adults, sponsors, volunteers and research, scientific and conservation groups (such as the Marsupial Co-ope Research Centre).

Conflicts that may arise are most likely between groups with different values. Typically, in a “front-stage” sense this could be between parents with families and young teens.

However, potential problems are unlikely to occur in such a benign and wide-open setting as the Zoo and in addition, these groups are attracted by different products at different times of day (e.g. daytime family visit, teens at twilights or film festivals).

Another potential conflict is between sections of the Zoo’s management in terms of the longer-term objectives of the Zoo, that is, ensuring that the Zoo attracts visitors (a marketing issue) versus educational or conservational objectives.

6. What does customer (visitor) retention mean in the case of the Zoo? How does the Zoo retain visitors?

The Zoo has developed a “Lifecycle of Appeal” to ensure that it attracts visitors not just through a traditional family day out, which may include visiting the Zoo as a child, as a parent and as a grandparent, but also at those ‘in-between’ stages of teens, young adults and empty nesters (children left home).

This represents a unique retention strategy, in that the Perth-based visitor is essentially experiencing a new product at each visit. Products that appeal to different segments are as follows:

Solution of Perth Zoo Case Study with Experts' Feedback
Solution of Perth Zoo Case Study with Experts' Feedback
7. Given that the Zoo is unlikely to be 100% self-funding, due to the high cost of research and conservation programs, should the Zoo increase its revenue? If so, how?

In the modern day and age, increasing revenue is vital even for non-profit organizations. The Zoo has developed a variety of revenue sources by offering a range of products beyond the traditional product (e.g. Zoo Twilights and Film Festivals), and by seeking additional markets such as sponsorship and corporate users.

However, the Zoo has got to attend to a variety of objectives without losing sight of any of these (visitor numbers, education, conservation, research). Such an approach makes the issue of increased revenue difficult, since not all objectives relate to revenues. Nonetheless, it should be noted that (as in Q2) some of the exotic animals might subsidies the research and conservation of others.

The Zoo’s administration recognizes that the Zoo can never be fully self-funding with the variety of objectives it has (see article “Going ape over the cost of zoos”, Australian, Dec 14, 2000, p 5). Note, however that as visitor revenue increases that the proportion of state government funding compared to Zoo income is reducing (Table 1).

8. Given the space constraints of the Zoo, what future directions should the Zoo take to enable regular development of new exhibits?

This question is open for debate. Many new ideas have been initiated (e.g. the African Savannah, the Alinta Reptile enclosure and particularly the Australian Walkabout). Temporary exhibits have also been conducted such as Zoorassic Park.

Given the space constraints of the Zoo and the desire for something new to stimulate visits, (i.e. maintaining product originality), temporary, major summer exhibits, such as Zoorassic Park offer clear advantages. Indeed, in January 2000 a summer exhibit “Wings of the Wild” was offered showing wild birds, and which included aerial displays.

It is important for Zoo management to keep abreast of changes in community entertainment needs, as well as the longer-term needs in terms of education and research. Currently the Zoo is considering a country zoo for the mega-fauna, such as zebras, elephants and giraffes as a means of overcoming the space problems facing the Zoo.

Experts’ Feedback on Perth Zoo Case Study

  1. ZOOS still attract the crowds but are increasingly expensive to run and face tough competition for the leisure dollar, NSW Zoological Parks Board director Guy Cooper has warned.
  2. “Visitors are becoming more sophisticated — they’re expecting that much more, and we must make sure we remain relevant,” Mr Cooper said yesterday.
  3. “The more you show animals in the right natural surroundings for a more involving immersion experience, the more you add to the cost. Zoos are very expensive to run.”
  4. He was speaking after this week’s disclosure that Sydney’s Taronga Zoo and Dubbo’s Western Plains zoos, for which the board is responsible, have debts of $6.7 million.
  5. “The reason we got into the situation we’re in is firstly the conservation program, research and education work we’re doing, and secondly employment costs in the past five years have increased 25per cent.”
  6. Big projects, such as the Sky Safari cable car at Taronga added to costs but were necessary to attract the visitors who generated much of the zoos’ income.
  7. As with other zoos around Australia, Taronga and Western Plains raise about 80per cent of their own funds, with much of the rest coming from state governments.
  8. Attendance figures at Australian zoos are generally stable or in slow decline, but the two NSW zoos achieved an increase of 50,000.
  9. Melbourne Zoo spokeswoman Judith Henke said government funding and corporate sponsorship was vital to keep zoos accessible to the public.
  10. “If we made it user pays, it would cut a lot of people out,” she said. “It’s very expensive to run an operation like this.”
  11. High staff levels, including keepers and veterinarians, animal feed and the cost of transporting endangered animals for breeding programs all added to the bills.
  12. Ed McAlister, CEO of the Royal Zoological Society of South Australia and head of the Australasian Regional Association of Zoological Parks and Aquaria, says most zoos are just managing to hold their own.
  13. Mr Cooper says Taronga and Western Plains are on the way to overcoming their problems. “We’ve been working with the state treasury for a long-term funding program,” he said, and they hoped to finalise this by the end of the financial year.
  14. “In the process of moving from the old funding model to the new, we’ve got a little bit caught in limbo between the two,” he said.
  15. “I wouldn’t call it a storm in a teacup — but I’m not running down Military Road with a begging bowl either.”

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