Monday, November 24, 2008
Objectives and Background information
The objectives of this report are to establish how successfully the adopted marketing mix worked for Singtel Formula 1, to identify the impacts of the event to Singapore, and the value that it brought to Singapore’s tourism economy. The sources from which I obtained the information needed were books, the internet, newspapers, televised media and my personal experiences. I read marketing books, which helped me to identify the various forms of marketing techniques. The internet, newspapers and the televised media provided me with information such as the impacts that the race brought about and how the event was marketed to the people. Lastly, as I had a first hand experience with the event and also seen their advertisement. I am able to offer a personal viewpoint of whether the marketing tools used were effective on me. The race also affected me in other ways too, which I will elaborate in the later parts of the report.
The event that I am writing about is the Singtel Formula 1 grand prix. Formula 1 grand prix are world renowned events which has long been associated with glamour, fame excitement and adrenaline. Singapore has a 5.067km long street circuit, consisting of 14 left hand turns and 10 right hand turns offering a number of potential overtaking opportunities, challenging corners and grueling sections that tested the true capabilities of the F1 drivers. It was the first street race in Asia and one of the three races that runs in an anticlockwise manner. In addition to offering a challenging track, it also offers a scenic view of various landmarks of Singapore. The government of Singapore and fans of Formula 1 were very excited about the race. It has been hailed as the new jewel in F1’s crown and the strongest rival to Monaco’s track by Sir Frank Williams. (http://www.planetf1.com/story/0,18954,14033_4209837,00.html )
MARKETING MIX
Product
Product can be split into three categories core, augmented and tangible product. Each of which has a different meaning. The core product is what the customers are really buying and in this case is the experience of being up close, hearing, smelling and seeing expensive Formula one cars racing on the track. There is also the prestige of being at the third most popular event after the FIFA World Cup and the Olympics. The augmented products are the facilitating services that made the whole experience better for the customers. Courier service was provided for customers who purchased the tickets regardless of locally or overseas. Organizers rent out a device called the kangaroo tv to enhance the customers enjoyment of the race. It allowed visitors to monitor their favorite team and even hear what the drivers were saying. Shutter services are also provided to the venue. Tangible products are those that visitors are able to touch and even take if they wanted to. Beautifully designed lanyard and tickets were part of the product. Rather than just having an ordinary paper ticket, the race organizers produced a plastic card ticket that was attached with a lanyard. This nice gesture enables visitors to keep their tickets and use the lanyard as an accessory. The lanyard was so popular that people are willing to purchase them from the customers at auction sites like eBay. Detailed information regarding race timings, suggested things to do and event race map were printed on colorful brochures. The different racing teams also set up their own booth to sell merchandise; this was also very popular with the visitors. They purchase such items as a form of souvenir. The organizers have effectively combined all the types of product together to meet the needs and wants of the visitors and at prices that customers deemed reasonable.
Place
Place can refer to the physical place of the event itself. The Singtel Formula 1 race had a carefully designed track that featured the various landmarks of Singapore. These included the Esplanade, Singapore Flyer and the many modern and historic buildings located nearby. These also provided a wide range of activities for the visitors to do, when they have some free time while waiting for the next race. They could go shopping, sightseeing or board the Singapore flyer. These area are easily accessible from the MRT station located nearby. Visitors were able to walk to their allocated area. Shuttle bus services were also provided in order to aid accessibility and to help transport people from the MRT station straight to the race venue. This was a great idea as overseas visitors may not know how to go to the race venue. Lastly, visitors could take a taxi straight to the race venue. The event organizers have chosen a very unique area for the event, being right in the heart of Singapore. This would generate curiosity as people would want to see how is such a feat is achievable. Being in the heart of Singapore means that it would be very accessible, this is important as visitors do not like the hassle of wasting time traveling. Lastly being close to all the landmarks not only helps to promote the event because of the beautiful views but also give people another reason from overseas to come to the event. This includes sightseeing in Singapore besides purely coming for the race itself. In this aspect of marketing, the organiser has chosen a splendid location.
Place can also include how people were able to purchase the tickets. It can also be known as distribution. Tickets were available through the official websites of the race. However on the day that the tickets were first released, the website crashed due to the immense volume of traffic generated. However service was quickly restored, without any further crashes. Using the internet as the distribution channel is a very effective way of distributing. As people from overseas can simplely click a few buttons and get their tickets. One is able to purchase the ticket using the phone or directly too. Tickets could also be obtained by buying stuff from the partners of the race. For example; purchasing a package with Le Saint Julien or travel agents came with race tickets. Overall, the organiser has used adequate number of distribution channels to sell their.
People
People are an important part of the event; it is the interaction between the visitors and staff, and among the visitors themselves. They help to shape the experience of the visitors and this can also be used as a tool to attract people to come. This was why the organizers of the race invited the A-list international, regional and local celebrities to the event. Some of the celebrities who came included Michelle Yeoh, Ferrari boss Jean Todt, Taiwanese TV host Dee Hsu, Korean star Ryo Si Won, nominated MP Eunice Olsen and MediaCorp actor Qi Yuwu. Fans of these celebrities who were not interested in the race may come down for the event. These celebrities provide another pull factor for other potential visitors.
Staffs are the representatives of the event; therefore they must be able to handle the situations and questions that may arise. Staffs that were unable to do so would reflect badly on the event and spoil the visitors’ experience. The staffs were trained to handle some of the problems and asked to remember answers to frequently asked questions. I was an usher at the event and we were given a small book that contains information of the race and all the others essential information that we needed to know.
The profile of the visitors at the event was very diverse; from the average joe to the wealthy. They have different needs; some wants to enjoy all the action in the comfort of an air-condition room with fine cuisine, while others wants to be as close as possible to the action and did not mind being exposed to the elements. The organizers addressed this issue by creating grandstands and suites to cater to people with different needs.
The organiser has tried to balance as much as possible the need of different visitors and took the effort to train their staffs. Therefore I feel that they have effectively used this marketing mix.
Partnership
Partnerships are critical in attracting resources to plan, manage and evaluate the event's marketing strategies. The race organizers had many partners; the government agencies and the private companies. With its partnership with the Singapore Tourism Board(STB), the event organizers could reduce some of its cost. STB promotes Singapore in various countries and with them as the partners a portion of marketing cost can be saved. This is because STB would highlight the race while doing their promotion. Furthermore STB funded 60% of the total cost of the race.
(http://motoring.asiaone.com/Motoring/News/Story/A1Story20070609-13632.html ) Without partnership with the government, it would not be possible for the event organizer to cordon off roads in the area used the area for the race.
Besides the government agencies, private companies like hotels, places of attraction, shops and restaurants were also their partners. They gave discounts to ticket holders of the race when they patronize them or tickets to the event were given to them. The partnership not only boosts the sales of the partners but also makes the visitors feel that they are getting value for the money spent which helps to sweeten the deal for them.
Onsite food and beverage operator are also the partners of the event. Famous local dish makers are invited to set up stall on the event ground. This operators offer the best of the local food fare, tourist would be interested to try them out as they want to experience the way of our life. Furthermore since these are all famous stalls and one of the favorite activities of Singaporeans is eating these stalls, it no wonder that it became a hit with the visitors.
Effective partnership was achieved, with the race area finished being constructed early than the deadline and positive sales.
Programme
The Formula 1(F1) event was not only about the F1 cars, there were also supporting races. These consisted of Aston Martin Asia Cup, Formula BMW Pacific and the Porsche Carrera Cup Asia. Fans of these races would visit the F1 race to see them. Car lovers also could also see get to see vintage cars at the display area. It was not all about cars, there are parties, performances and food available. The performances included dances, musical performances and even local theatre performances by the Dim Sum Dollies. This provided a good mix of entertainment with the infusion of local flavours. The programmes were also spaced out and lined up effectively. If there was no proper spacing, visitors may get bored or maybe too engrossed and not visit other attractions in the race area. This would result in the lost of sales. Time was given for people to grab their meals or party to celebrate after a race. The end of the last race did not mean that there was nothing else to do. With various party happening and food and beverage outlets, visitors can chill out before heading off.
Price
There was various type of tickets; walkabout and grandstands for single or multiple days. The walkabout tickets ranged from $38 to $168 for a three days pass. There are also discounts for youths aged 7 to 15 and seniors aged 60 and above. Although it is good that the organizers were willing to reduce the price for these two age groups, I feel that it is ineffective as the discounts are quite little to be of significance as these two groups are people with limited spending power. Ticket prices of grandstands and suites ranges from $139 to almost $4000 depending on various factors such as the day, area and package taken. I feel that they have effectively set their pricing for these two types of ticket. Since the final day of the event is the most exciting part, many people would want to come. Therefore knowing that they have the demand it was safe for them to raise the prices. Also since this is race, certain areas would surely have better view therefore it is also appropriate to charge higher prices. Since this is a worldwide event, the visitors themselves expects to pay higher prices too so it is smart of the organiser to keep increasing the price for each day.
Packaging
The basic package of the ticket includes a survival kit which consists of an ear plug and poncho. In order to have higher attendance rate, organisers came up with special three day pass tickets. The tickets are sold at a special price, which is cheaper than if the tickets were brought independently on each day. This is so as to entice people to purchase the three day pass. There are also student and senior package for walkabout tickets where this two group of people receive special discount. For tickets in the more expensive suites for example in the northern loop area; paddock club. Besides the ticket and entry to the suite, they enjoy a free flow of champagne and food, they can also use the facilities there for example the spas.
I feel that the organiser can package its event a little better as most of the packages are targeted to those who have higher spending power. Those who have limited purchasing power may not be able to afford it. Maybe it can have a package where, ticket holders can walk on the tracks before the start of the first race or after the last race.
Promotions
The organiser employed various type of media format to advertise in. Traditional marketing medium such as the newspaper, magazine, radio and television were used. They try to highlight how fast the cars would be going be using ideas such as the time taken to start a normal car engine the F1 cars would have already travelled certain distance or don’t blink or you might miss it. It got people thinking about how fast the cars can go and would want to see it for themselves. Fast cars and hot girls go hand in hand together; therefore organisers created a competition to find “Singapore’s grid queen” on television. The show incorporated elements of the race in an effort to get people interested in the race.
They also made use of the popular culture to do their marketing. Promotions were also done on the website Facebook. The internet is a new and powerful tool for marketers, furthermore using Facebook to advertise cost almost next to nothing. Besides Facebook, they also had their own website where updates about the F1 world were available. One of the interesting promotions held was the red bull F1 car performing at the Chingay parade. That was the first time that F1 cars debuted on Singapore’s road. It was sort of a sneak preview for the visitors of the Chingay, of they experienced is very much like what will happen on the actual day. There were also exhibitions at various part of town, where replica F1 cars were displayed. People could take pictures and even touch the cars. Being partners with Singtel and STB, means that when the partners would include the race while they are doing their own promotions. With their creative advertisement the promotion mix was effectively used.
Economic Impacts
The event is expected to generate around S$120million each year in revenue, however the cost of running the event could run up to S$150 million. From the figures, it seems strange that government would even want to organise the event. Personally I believe that there are many reasons to why the government was so keen on having the race. Firstly the S$30 million deficit could be treated as a marketing cost, reaping those intangible marketing benefits. For example, media experts estimate the public relations value of the F1 race to Singapore, including the two to three hours of live TV air-time, could be worth as much as US$300 million (S$430 million).
(http://propertyhighlights.blogspot.com/2008/09/citys-image-will-be-big-f1-winner.html )
This alone is a good enough reason for government to support the event.
The investor’s confidence in Singapore surely has grown after it successfully held the three day long event. As a result of F1 Singapore has been able to portray itself as an efficient and capable country with people and various government agencies working together. Quoted from Formula One supremo Bernie Ecclestone - “He said it would have taken any other country two years to achieve what the Republic did in just over a year in gearing up to host a Formula One race from scratch” –( http://www.home-in-singapore.sg/sgp/cms.www/content.aspx?sid=622 )
Many jobs were created for the event for the three day event, hiring people with all sorts of skills and qualifications. For example; I was hired by Kelly services to work as an usher in the event. Kelly services provides the labour needed for the event, it had over two hundred job positions open to the public from ushers to ticketing staff. Besides Kelly services, many hotels also hired additional manpower for the event. This is because they hosted many parties or were the provider of food to the race suites. It also generated more revenue for the hotels near the race area where hotels charged up to three times the normal room rate. They also packaged their room for three days, increasing their occupation rate. The government also earned additional revenue by imposing a thirty percent tax for the rooms.
Place Marketing
Hosting such a prestigious event like the F1 race further adds on to the number of excellences feat they achieve. With the beautifully design track course, suites visitors would be impressed. This helps to create a positive image for Singapore.
Image Maker
Singapore is more widely known for its efficiency and strict laws but not an exciting country. Hosting the race is set to change that. This is inline with the Singapore Tourism Board’s aim of turning Singapore into a vibrant global city that is abuzz with high quality entertainment and events. Organiser hopes bring such a prestigious event would inject live into Singapore.
Tourist Attraction
The F1 race has a huge fan base, having worldwide coverage with more than 500 million viewers around fifty thousand tourist came just for the event itself. The month of September is one of the low periods for tourist arrival. The event will help to bring up the number, furthermore it is a yearly event so the figures is not just a one time off incident. During the days of the event from 25 to 27 September, the growth in visitor arrivals peaked at 30.3%.
The length of stay also increased during the race period Visitor days [1] were estimated at 3.2 million days, an increase of 6.2% in comparison with September 2007
(http://app.stb.gov.sg/Data/news/3/7dc8b441cf4e6fe9bc806679c4579e68/stb%20monthly%20factsheet%2022%20-%20sep%2008.pdf )
This is because most of tourist that came of the race would likely stay for the whole three days. Considering that it falls on start of the weekend, this may have been one of the reason for the increase.
Animator
As said above, F1 has worldwide coverage and a huge fan base. Fans or viewer may not even know about the existence of Singapore prior to the event. However, while watching the race and seeing the stunning backdrop. They maybe curious and would like to know more about Singapore and maybe even want to visit Singapore. Or fans of the race came to Singapore and found that it is quite a nice place to take a holiday. They may want to come back some other time to explore further, as most of them only just planned on watching the race with little time left for sightseeing.
Catalyst
One thing is for sure, the race certainly stimulated the business of tourism related business and the construction sector. This is because the infrastructure for the race had to be built and once the event is over it has to be torn down too. Being right smack in the centre of shopping malls, food and beverage outlet and attractions with provide a cluster of activities for tourist to do. With their free time before and after the race they can go and patronize these areas. In order to capture more sales, shopping malls in the area even extended their operating hours. As it is highly unlikely that tourist would just stay at the race venue the whole day. As a result of the race, the toy business may also grow as children would pester their parents to get them a toy car or something. Bridgestone tires could also enjoy a growth in business as it is the only distributor at the F1 race. People who watch the race will have confidence in their tire.
Conclusion
Overall the organisers have done a superb job of combining all eight aspects of the marketing mix leading to a highly successful event. This can be seen from the sales, where 95% of the tickets are sold. A major reason for the success is because of its partnerships with the government and industry players. Without their support, this may not have been possible. Furthermore they have excellent advertisements, which easily entice people to make purchases.
Appendices
http://www.asiaone.com/Motoring/Motorworld/Story/A1Story20080929-90611.html
Ferrari F2008
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