Destination Station FINAL(2)

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Executive Summary
Destination Station
Contact: Kathleen Sharp (561) 843-4643
Business Type:
Destination Station will enter the child and youth services industry. This industry
is in the mature phase of its life cycle with youth centers comprising 36% of all its
establishments. Destination Station is a nonprofit youth recreational center that offers
afterschool care services.
Company Summary:
Destination Station will provide afterschool care services for suburban families
during the week, supplying children with a safe and fun environment through a unique
world travel theme. A bus ride designed to feel like an airplane flight brings the children
to a center, which transforms into a new destination for them each month. Each day
Destination Station provides activities related to the theme, giving children a fun,
cultured experience. Destination Station is also unique because it serves the nearby inner
city area, giving its suburban customers the chance to not only provide child care for their
children but also to give back to the community. By using the money from both our
suburban customers and donors, we will provide free childcare for inner city families
every Saturday, which will help the inner city parents and simulate travel experiences for
children who may otherwise not have the opportunity to go on vacations.
Destination Station will provide customers with a service that benefits them both
psychologically and emotionally. Studies have shown that a child’s participation in
organized activities out of school is associated with improved confidence and social

2
skills, and gives parents more energy and time in the evenings. Destination Station also
gives parents emotional gratification because of its philanthropic mission. The suburban
families will have the satisfaction of knowing that their money is benefiting a nearby
community in need.
Our initial startup costs total to $259,720. The majority of this amount is
comprised of the costs for our fixtures and equipment because it will be expensive to buy
the buses, playground equipment, and technology that we require. Our repeating monthly
expenses total to $116,086, making our first three month’s investment total $375,806. We
hope to raise a significant amount in donations and get a loan from a bank or investor.
Management:
• Kathleen Sharp is a journalism and mass communication major and business
minor from Boca Raton, Florida. Her work at a radio station and her full-time
nanny experience have given her valuable organization and communication skills
that will be beneficial in her role as Executive Manager.
• Autumn Adams is an entrepreneurship major from Garland, Texas. Her experience
marketing Samford University’s Fine Arts Department and her work with small
business clients at the Texas Tech Small Business Development Center in
Abilene, TX, will enable her to be an effective Marketing Manager.
• Clark Mattison is a finance major and math minor from Zionsville, Indiana. His
concentration in budgeting and financial affairs will help him in his role as
Financial Manager.
• Brett Hammond is an entrepreneurship major from Oak Park, Illinois. His
specialization in personal relations will be beneficial in his position as Human

3
Resources Manager. Also, his cultural experiences in Honduras over the past five
years have sharpened his Spanish speaking skills, enabling him to interact well
with Destination Station’s Hispanic customers.
• Wade Cline is an entrepreneurship major from Birmingham, Alabama. His
experience working for a moving company will be beneficial in his role as
Property Manager.
Target Market:
Located in Memphis, Tennessee, Destination Station will target middle-class
suburban families of the Midtown region. Currently, there are roughly 40 licensed
childcare providers that offer afterschool care in the surrounding Memphis area. Our top
competitors will be Lindenwood Life Center, Evergreen Afterschool, and Idlewild
Children’s Center. We will also face indirect competitors, such as Memphis Athletic
Ministries, nanny services, and schools that provide their own afterschool care.
Midtown Memphis has a large market for childcare services, with 12,432 total
households having a median income of $63,867. There are several schools in the
Midtown suburb that our competitors do not serve, revealing a niche we can market to.
By strategically promoting our convenient location, unique program theme, and
philanthropic mission, Destination Station hopes to attract families in the area. No other
afterschool care center in Memphis has a charitable intention or offers the same
scholarships and discounts as Destination Station.

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Industry Analysis
The Industry and the Market
The child and youth services industry in the United States was projected to
contain 10,302 total establishments in 2010, employing roughly 177,341 people. These
total establishments were also estimated to collectively make $12.4 billion in 2010.1
Since there are several segments within the industry, each offering a unique service, no
large corporations dominate the industry as a whole.
Additionally, the number of establishments was projected to grow at a rate of
0.38%, the number of sales was estimated to grow at a rate of 7.5%, and the number of
employees was predicted to grow at a rate of 0.38%.2
This data thus reveals that the child
and youth services industry is a mature industry with stable growth rates. See Figures 1,
2, and 3.

1
Barnes Reports: U.S. Child & Youth Services Industry. (2009). United States Child &
Youth Services Industry Report, 1-239.

2

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Industry Segments
This industry has seven segments: child related social services, adoption services,
youth centers, children’s aid societies, child guidance agencies, youth self-help agencies,
and aids to families with dependent children. Destination Station is categorized as a youth
center.

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Based upon estimated sales for 2008, youth centers made up 14.4% of the overall
industry’s sales, as shown in Figure 4.
Child related social services
Revenue: $4,853.8 million
Percent of total industry: 45.4%
Adoption services
Revenue: $2,399 million
Youth centers
Revenue: $1544.6 million
Children’s aid societies
Child guidance agencies
Revenue: $607 million
Youth self-help agencies
Aids to families with dependent children
Percent of total industry: 1.5%3

3

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The number of established youth centers make up 36% of all establishments
within the child and youth services industry, as shown in Figure 5.
Child related social services
3,997 establishments
Percent of total industry: 39%
Youth centers
Adoption services
Child guidance agencies
413 establishments
Children’s aid societies
368 establishments
Youth self-help agencies
242 establishments
Aids to families with dependent children
83 establishments
Percent of total industry: 1%4

4

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In 1997 there were 7,543 total establishments within the child and youth services
industry. By 2008 total establishments numbered 10,186. Within those 11 years, child
and youth services establishments experienced a growth rate of 3.2%, which promises
that Destination Station is entering into an industry that is physically expanding.5
Services for the elderly and disabled (NAICS 62412), a similar industry also
under the umbrella of individual and family services (SIC 8322), experienced a growth
rate of 14.8% as the number of establishments grew from 9,960 to 26,213 from 1994 to
2011.6
Child and youth services, along with other industries that share the same SIC
code, have experienced a historical growth of establishments.
Trends
• Demographic – Age Population: The population of children from 5 to 9 years
old in the United States was approximately 20,416,000 in 2012, encompassing
6.6% of the total population.7
This percentage decreased from the 6.7% it
encompassed in 2009, since youth are declining as a percent of the U.S.
population because the elderly are increasing. However, the percentage of these
children living below poverty has increased. The number of children from 5 to 9
years old living below poverty was 4,754,000 in 2012, comprising 23.4% of the
total number of 5 to 9 year olds, and 4,483,000 in 2009, comprising 21.7% of the

5
U.S. Census Bureau. “Economic Census: Bridge Between SIC and NAICS SIC: Service
Industries.” Census. https://www.census.gov/epcd/ec97brdg/E97B2_83.HTM#I8322.
Accessed February 19, 2014.

6
Barnes Reports: U.S. Services for the Elderly & the Disabled Industry (NAICS 62412).
(2012). United States Services for the Elderly & Disabled Industry Report, 1-276.

7
U.S. Census Bureau. “Age and Sex Composition in the United States.” Table. Census. .
Accessed February 17, 2014.

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total 5 to 9 year old population.8
This 1.7% increase from the percentage of
children ages 5 to 9 living below poverty from 2009 to 2012 is favorable to the
child and youth service industry because it demonstrates an increase in the
amount of children needing service.
• Demographic – Constituent Base: Volunteers make up a substantial portion of
the work force in the child and youth services industry. The U.S. Bureau of Labor
Statistics found that the volunteer rate declined by 0.3% in 2012. However,
volunteers were most likely to volunteer for religious or youth service
organizations. Among volunteers with higher education, 30.5% mainly helped
religious organizations and 26.8% mainly helped youth service organizations. Of
volunteers with less than a high school diploma, 48.6% mainly helped religious
organizations and 23.2% mainly helped youth service organizations.9
This shows
there is a supply of volunteers for the child and youth service industry regardless
of the overall volunteer rate in the United States.
• Economic – Tax Deductions: According to the National Center for Charitable
Statistics, there are 1,409,430 tax-exempt organizations in the United States.10
Tax deduction serves as an incentive for tax-paying citizens to donate to non-
profit organizations that serve the community. Companies within the child and
youth services industry that are tax deductible fall under the youth development

8
U.S. Census Bureau. “Poverty Status of the Population by Sex and Age.” Table.
Census. http://www.census.gov/population/age/data/cps.html. Accessed February 17,
2014.

9
U.S. Bureau of Labor Statistics. “Volunteering in the United States, 2012.” February 22,
2013. Economic News Release. U.S. Department of Labor.
http://www.bls.gov/news.release/volun.nr0.htm. Accessed February 17, 2014.

10
National Center for Charitable Statistics. “Quick Facts About Nonprofits.”
http://nccs.urban.org/statistics/quickfacts.cfm. Accessed February 19, 2014.

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category in the National Taxonomy of Exempt Entities Classification System.11
Therefore, trends regarding tax deductions and corresponding donations directly
affect the child and youth services industry. In 2011, Americans donated $298.3
billion to charity, reflecting a 3.9% increase from 2010.13
Thus, as Americans
become increasingly more willing to contribute in donations, the child and youth
services industry benefits. See Figure 6.
Figure 612

11
GuideStar. “National Taxonomy of Exempt Entities (NTEE) Classification System.”
http://www.guidestar.org/rxg/help/ntee-codes.aspx. Accessed February 19, 2014.

12
National Philanthropic Trust. “Charitable Giving Statistics.”
http://www.nptrust.org/philanthropic-resources/charitable-giving-statistics. Accessed
February 19, 2014.

Figure 6

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• Demographic – Education Levels: According to data collected in 2009 from the
United States Census
Bureau on educational
attainment, roughly 43.3%
of people ages 25 and older
had obtained a high school
diploma or less.13
Moreover, a 2006 survey
found that children of those
whose education levels
were high school or less
were less likely to participate in extracurricular activities. See Figure 7.14
While
the percent of the population 25 years and older without a college education
dropped to 42.7% in 2012, there is still a significantly large population who has
not received higher education.15
This, in turn, means a large portion of children
will not be as involved in extracurricular activity. Therefore, there should be a
demand for the child and youth services industry to target these children.

13
U.S. Census Bureau. “Educational Attainment for the Population 25 Years and Over by
Age, Sex, Race and Hispanic Origin, and Nativity Status: 2009” Table.
http://www.census.gov/prod/2012pubs/p20-566.pdf. Accessed February 19, 2014.
14
U.S. Census Bureau. “A Child’s Day: 2006 (Selected Indicators of Child Well Being)”
Figure 4. http://www.census.gov/prod/2009pubs/p70-118.pdf. Accessed February 19,
2014.
15
U.S. Census Bureau. “Educational Attainment in the United States: 2012.”
http://www.census.gov/hhes/socdemo/education/data/cps/2012/tables.html. Accessed
February 19, 2014.

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• Demographic – Family Population: A family household is defined as a group of
people living in a housing unit where “at least two members [are] related by birth,
marriage, or adoption.”16
The number of family households in the United States
grew 0.49% from 2012 to 2013.17
This reflects an increase in the demographic
that most child and youth service segments serve. The percentages of types of
family households are also changing. As shown in Figure 8, fewer households are
consisting of both a husband and wife. The percent of households classified as
“husband-wife family” fell 3.5% from 1990 to 2000 and another 3.3% from 2000
to 2010.18
It is important that businesses within the child and youth services
industry acknowledge this trend because it may affect their marketing strategies.

16
U.S. Census Bureau. “America’s Family and Living Arrangements: 2012.” Web.
http://www.census.gov/prod/2013pubs/p20-570.pdf. Accessed April 14, 2014.
17
U.S. Census Bureau. “Families and Living Arrangements.” Web.
http://www.census.gov/hhes/families/. Accessed April 14, 2014.
18
U.S. Census Bureau. “Households and Families: 2010.” Web.
http://www.census.gov/prod/cen2010/briefs/c2010br-14.pdf. Accessed April 14, 2014.
Figure 8

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• Economic – Family Budgets: Parents are now finding it necessary to budget
their expenses even more so than in the past. In 2013, it was estimated to cost a
middle-income couple $241,080 to raise a child for the next 18 years. That
estimate had increased nearly 3% since 2011. However, the median annual
household income in the United States has fallen $4,000 since 2000.19
Thus,
businesses in the child and youth services industry may have to adjust their prices
to accommodate for the increasing amount of frugal parents who could possibly
consider affordability the most important factor.
Competitor Analysis
Competitor 1 – The YMCA
The YMCA of the USA (the Y) is considered to be the most valuable brand in the
nonprofit field, according to The New York Times.20
The Y has garnered a significant
clientele base, being that “more than 33% of all Americans have participated in a YMCA
program in their lifetimes.” The Y finds its strength in attracting members of all ages,
allowing parents as well as children to benefit from the club’s services.21
With 2,600
YMCAs in 10,000 communities across the country, the Y has successfully become a
model of success for any non-profit and one that “sets the standard” for the types of
activities and level of care that should be offered by a center. Another strength involves
the Y’s ability to provide financial assistance to 20% of the children in its program

19
Hicken, Melanie. “Average cost to raise a kid: $241,080.” CNN Money. 2013. Web.
http://money.cnn.com/2013/08/14/pf/cost-children/. Accessed April 14, 2014.
20
Strom, Stephanie. “An Analysis Ranks Brands of Nonprofits.” The New York Times.
2009. Web. http://www.nytimes.com/2009/06/24/us/24charity.html?_r=0. Accessed April
14, 2014.
21
Shelley, Lynnette. “Y2K YMCA.” Club Industry. Web.
http://clubindustry.com/nonprofits/fitness_yk_ymca. Accessed April 14, 2014.

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because of its large network base that includes schools, churches, foundations, and
more.22
Though the Y is known for its high ethical standards and Christian values, the Y
has not been immune to controversial lawsuits and scandals.23
Over the years, the Y has
been accused of not taking proactive action against unwanted sexual advances and child
sex abuse, resulting in bad press for their image and mission.24
Another weakness that
must be accounted for when considering the Y’s effectiveness is the cost of membership
associated with using their childcare services. Even though the Y offers membership rates
that correlate to a member’s household income through its Open Door Program, any cost
for membership will be a deterrent for low-income families, leaving many children
without healthy activity outside of school. The Y also sacrifices individual attention for
activities that will please the masses. Lastly, because the Y has such a large member base,
transportation is not a service that is usually offered and thereby its outreach may be
minimized.25
Competitor 2 – The Boys and Girls Club
The Boys and Girls Club is a well-known organization that empowers children
and young adults to develop lifelong skills in order to become better students, friends,
citizens, and more. The Boys and Girls Club benefits from federal funding and the

22
Shelley, Lynnette. “Y2K YMCA.” Club Industry. Web.
http://clubindustry.com/nonprofits/fitness_yk_ymca. Accessed April 14, 2014.
23
Filip, Iulia. “Class Describes YMCAs as Homosexual 'Brothels'.” Courthouse News
Service. 2012. Web. http://www.courthousenews.com/2012/03/20/44837.htm. Accessed
April 14, 2014.

24
Howell, George and Edwards, Meredith. “Memphis YMCA head 'gut-punched' by
child sex abuse claims against ex-coach.” CNN. 2011. Web.
http://www.cnn.com/2011/12/12/justice/tennessee-aau-allegations/. Accessed April 14,
2014.
25
The YMCA. http://www.ymca.net. Accessed February 19, 2014.

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success of their fundraising efforts, which allow them to keep their yearly fees down near
$10.26
A major factor leading to the success of the club involves having 4,000 chartered
club facilities, 1,400 of which are organized in schools and 300 of which come out of
public housing. In that way, the Boys and Girls Club conveniently meets the needs of
children by meeting them where they are.27
Additionally, the Club is able to draw upon
help from national volunteers as well as from corporations and foundations, which
secures more support and raises awareness for their mission. The Boys and Girls Club
efforts have been recognized nationwide as Forbes, Fortune, Money, Newsweek, and U.S.
News and World Report have all ranked the Club among the top charitable organizations
in America, based on cost-effective use of donor dollars.28
The Boys and Girls Club has recently made attempts to teach children digital
literacy through computer, software, and technology instruction in order to shed its
“swim and gym” image.29
While this new marketing technique could attract more
attendance, its competitor, the Y, is doing the exact opposite by limiting kids’ use of
electronics in partnership with Michelle Obama’s campaign to reduce childhood

26
Olson, Elizabeth. “The Boys & Girls Club and High Tech? They Mix.” The New York
Times. 2011. Web. http://www.nytimes.com/2011/05/24/business/media/24adco.html.
Accessed April 14, 2014.
27
The Boys and Girls Club. http://www.bgca.org/Pages/index.aspx. Accessed February
19, 2014.
28
StateUniversity.com. “Youth Organizations - Boys And Girls Clubs Of America.”
2014. Web. http://education.stateuniversity.com/pages/2560/Youth-Organizations-
BOYS-GIRLS-CLUBS-AMERICA.html. Accessed April 14, 2014.
29
Olson, Elizabeth. “The Boys & Girls Club and High Tech? They Mix.” The New York
Times. 2011. Web. http://www.nytimes.com/2011/05/24/business/media/24adco.html.

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obesity.30
The Club’s new long-term commitment to give kids access to computers and an
internet connection might ultimately hurt them if the club does not promote activities that
stimulate children emotionally, physically, and interpersonally. Boys and Girls Club
largely operates at distinct locations. By offering most of its services off site from
schools, with limited transportation, many children are hindered from attending club
events. Another weakness involves the yearly member fee, and since 64% of Club
members qualify for free or reduced-price school lunches, many families with eager
children simply cannot fund Boys and Girls Club activities.31
Competitor 3 – Big Brothers and Big Sisters
Big Brothers and Big Sisters (BBBS) is a non-profit organization that matches at-
risk youth with adult role models. This organization prides itself in its 1:1 ratio, which
has proven to be a great model of success since BBBS youths are 46% less likely to use
drugs illegally, 27% less likely to start drinking, and more successful in school.32
BBBS
is able to rely on a large support force because in terms of hard dollar returns, few
investments equal a donation to Big Brothers Big Sisters. In monetary terms, each dollar
given to fund BBBS mentoring generates $18 in social return on investment.33
With more

30
Stolberg, Sheryl. “Y.M.C.A. Adopting Health Policies for Youth.” The New York
Times. 2011. Web. http://www.nytimes.com/2011/11/30/us/ymca-healthy-living-
standards-for-children.html?_r=0. Accessed April 14, 2014.
31
The Boys and Girls Club. http://www.bgca.org/Pages/index.aspx. Accessed February
19, 2014.

32
Promising Practices Network. “Programs that Work: Big Brothers Big Sisters of
America.” Web. http://www.promisingpractices.net/program.asp?programid=125.
33
Booth, Leslie. “Investing in Kids' Futures Pays Off in Hard Dollars.” The Wall Street
Journal. 2013. Web. http://online.wsj.com/article/PR-CO-20130716-908571.html.

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than a century worth of experience, a great model of success, proven impact, and
encouraged donors, Big Brothers Big Sisters continues to be a thriving organization.
75% of funding for Big Brothers Big Sisters comes from donations, while their
1:1 ratio is only made possible when enough volunteers are available.34
BBBS’ impact is
directly tied to volunteer willingness and performance, and if that disappears, so does
their organization’s effectiveness. Since BBBS serves a niche within the child and youth
services industry by targeting at-risk children, their services are only offered to children
from certain walks of life. Even though the benefits are concentrated and well received,
many children do not get to experience what Big Brothers and Big Sisters has to offer. In
June 2013, Fox News reported that 19.5 million dollars in federal grants, awarded to Big
Brothers and Big Sisters between 2009 and 2011, were not able to be tracked because of
“sloppy financial records,” causing 3.7 million dollars in funds to be frozen. Even though
the mistake was procedural and not due to misuse of taxpayer funds, BBBS has
appropriately responded, “with a quarter of its staff trimmed and a new CEO and director
of finance hired.”35
Overall, Big Brothers and Big Sisters face many issues that many
other non-profits face, but on a much larger scale because of their size and influence.
Product Standardization
The child and youth services industry is not extremely standardized. Since it is an
industry based upon social interaction with children, services vary greatly depending on
the circumstances. Not all children require the same type of guidance and care; their

34
James Madison University Education. “Big Brothers Big Sisters.” Web.
http://educ.jmu.edu/~brook3cm/bbbshr_campaign.pdf. Accessed April 15, 2014.
35
Miller, Joshua Rhett. “Justice Department freezes funds to Big Brothers Big Sisters
following audit.” Fox News. 2013. Web.
http://www.foxnews.com/politics/2013/06/25/justice-department-freeze-funding-to-big-
brother-big-sisters/. Accessed April 15, 2014.

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needs are situational based upon various factors such as demographics and location.36
However, some basic practices in childcare are relatively standardized, such as
regulations, disciplinary action, and emergency procedures. Each childcare business and
organization must comply with the standards of its state.37
Ways to differentiate in these areas are to create unique forms of rewarding
children and develop creative policies to provide maximum benefit and safety to the
customers. Additionally, strategizing new ways to engage children through interactive
technology or personalized instruction would be an advantage in the marketplace. Other
ways to differentiate in the child and youth services industry include meeting other needs
by providing services to different communities, providing non-traditional hours, and
offering innovative types of programs.38
Niches not as commonly served in the child and youth services industry include
care for military children, aid for children with incarcerated parents, and services for
recently immigrated children. A new trend in child services is multilingual immersion
programs as “parents strive to prepare their children for the global marketplace.”39
An
organization that would provide for these niches could potentially have an advantage over
the rest of the competition.

36
Action For Children. “Know Your Needs.” 2014. Web.
http://www.actionforchildren.org/view.php?nav_id=11. Accessed April 14, 2014.
37
ChildCare Aware of America. “State Licensing Requirements.” Web.
http://www.naccrra.org/about-child-care/state-child-care-licensing. Accessed April 14,
2014.
38
Child Care Resource & Referral. “Options in a Competitive Environment.” 2014. Web.
http://earlychildhood.mysdhc.org/CCRRCenters. Accessed April 14, 2014.
39
Leong, Kathy Chin. “10 Hot Business Ideas Aimed at Children.” AllBusiness.com.
2014. Web. http://www.allbusiness.com/marketing-advertising/market-groups-youth-
market-childrens/15534725-1.html. Accessed April 14, 2014.

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Barriers to Entry
The human services classification, which includes youth programs, is one of the
ten major categories of the nonprofit sector.40
Beyond filing the Articles of Incorporation
like for-profit businesses, nonprofits must complete the Form 1023 to gain tax-exemption
and non-profit status. This process, according to James Moody, a CPA at Dent, Baker &
Company, is arduous and time-consuming, often requiring the help of an accountant
and/or attorney.41
Another barrier to entry for child and youth service businesses is establishing a
credible reputation in the community. Gaining customer trust is a fundamental dynamic
in this industry due to the personal nature of the services offered, and this process can
take several years. In the same way, a principal entry barrier in the non-profit market is
gaining reputable trust from donors, government agencies, and clients so that there can be
adequate funding for the future. Overall, “reputation is a major entry barrier for most
non-profit markets.”42
Key Success Factors
• Personalization – The relationship between the customers and the workers
determines the measure of success in the child and youth services industry.
Returning customers will have felt personally cared for. Services that exceed
customer expectations will be clearly distinguished from those that provide
minimal attention to the individual. Maintaining a manageable employee to

40
National Center for Charitable Statistics. “US Nonprofit Sector.” Web.
http://nccs.urban.org/statistics/. Accessed April 16, 2014.
41
Moody, James. CPA at Dent, Baker & Company LLP. Phone Interview. April 16,
2014.

42
Oster, Sharon M. Strategic Management for Nonprofit Organizations. New York:
Oxford University Press, 1995. 32.

20
customer ratio can achieve this with relative ease, since “the number of children
compared to the number of staff” is an important quality indicator for this
industry.43
• Uniqueness – The ability to provide an innovative service is critical to the
success of a business in the child and youth services industry. If a service is
already provided, there is no demand for its product. Creativity is an important
factor for businesses involved with youth development.44
Companies that can
develop creative ideas and find new ways to implement them will be more likely
to have a returning customer base. Difficulty can arise when there is a large
amount of competitors in a standardized market.
• Customer Loyalty – Satisfied customers will often either remain with the same
business or recommend it to others. Repeat and referred customers should give a
child and youth service business a steady supply of customers and, therefore, aid
in its success. Customer loyalty “is not about what gets the customer to come in
for the first time, it’s what gets the customer to keep coming back.”45
Thus,
customer loyalty can be moderately difficult to achieve because it requires more
than just marketing, since most child and youth services are not impulse
purchases.

43
Child Care Resources, Inc. “Child to Staff Ratios.” 2014. Web.
http://www.childcareresourcesinc.org/parents-families/about-quality-child-care/why-are-
staff-to-child-ratios-important/. Accessed April 14, 2014.
44
Motivation Education. “Youth Development Success Factors.” 2009. Web.
http://www.fieldtoclassroom.com/about/philosophy/youth-development. Accessed April
14, 2014.
45
Porter, Andy. “First Impressions, Personalized Service and Customer Loyalty.” 2009.
Web. http://customerservicebootcamp.wordpress.com/2009/06/15/personalized-service-
customer-loyalty-and-happiness/. Accessed April 14, 2014.

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• Employee Culture – A positive work environment allows for an enjoyable time
for customers and employees alike. Since customer service is at the heart of the
child and youth services industry, it is important that employees are approachable.
If employees feel appreciated, they are more likely to put in extra effort. Building
an employee culture can drive innovation and attract the best talent.46
Making an
employee feel appreciated can be difficult, as it depends on whether or not the
self-interest aligns with the greater good of the company.
Overall Industry
Overall, the child and youth services industry is mature and stable for incoming
businesses. It is moderately easy to make money in this industry because it is not
standardized and the competition is more regionally incorporated than many other
industries. However, many companies within the child and youth services industry
operate as a nonprofit whose goal is not to make money. There is an abundance of niches
within the child and youth services industry that allows for key success factors such as
uniqueness and personalization. The largest segment in this industry is child related
social services, followed by youth centers. These segments are most attractive because
they lead in the number of establishments and sales revenue.

46
UP! Your Service. “Why Build a Superior Service Culture?” 2014. Web.
http://www.upyourservice.com/service-culture/why-service-culture. Accessed April 14,
2014.

22
Target Market Analysis
Target Market Size
Characteristics
• Midtown area/Memphis, Tennessee: We will be marketing to Midtown, a suburb
of Memphis, which has a population of 23,409.47
Destination Station will attract
suburban families by being located in Midtown, zip code 38104, while being
close enough to the lower income area of Binghampton, zip code 38112, where
we will concentrate our charitable efforts. See Figure 9.

47
U.S. Census Bureau. “Community Facts.” American Fact Finder. Census.
http://factfinder2.census.gov/faces/nav/jsf/pages/community_facts.xhtml. Accessed
March 2, 2014.
Figure 9

23
Midtown’s western limits are bounded by an interstate, allowing for a
considerable amount of traffic through the neighborhood. Midtown boasts the
friendly atmosphere of a long established neighborhood.48
• Family households: Our center will market specifically to families with children.
There are roughly 12,432 total households in Midtown Memphis. Of these
households, 33.1% are classified as family households and 14.2% are family
households with children under 18 years. The 1,764 family households with
children under 18 years comprise 42.9% of all family households.49
• Middle class: Destination Station will target the middle class of Midtown. Lower-
class families may not be able to afford our services if they are trying to save
money on their children’s activities. Upper-class families may also send their
children to Destination Station but will most likely choose a more expensive
option in afterschool childcare programs. People with a middle-class income,
defined by US News as approximately between $51,000 to $123,000, will be the
most likely to send their children to our center.50
In Midtown, the median income
of families is $63,867. Additionally, 21.7% of these families make between

48
Crye-Leike Real Estate Services. “About Memphis Neighborhoods- Midtown
Memphis.” Web. http://www.crye-
leike.com/buyerseller/locals_memphis_neighborhoods_midtown.php.
Accessed March 3,
2014.
49
U.S. Census Bureau. “Profile of General Population and Housing Characteristics:
2010.” American Fact Finder.
http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=DEC_
10_DP_DPDP1. Accessed March 2, 2014.
50
Newman, Rick. “How to Gauge Your Middle-Class Status.” US News: Money. U.S.
News and World Report, 2010. Web. http://money.usnews.com/money/business-
economy/slideshows/how-to-gauge-your-middle-class-status/2. Accessed March 2, 2014.

24
$50,000 and $74,999, the highest percentage of all income categories.51
See
Figure 10. This middle class group of families has enough disposable income to
afford reasonably priced afterschool childcare.
• Philanthropic: Since we are a nonprofit, we will market to families who
habitually donate to charity. In 2012, middle-class individuals in Midtown,
Memphis with an income between $50,000 and $99,999 gave an average of
$2,285 to philanthropy. This was 7.5% of their income, a larger percentage than
of individuals in the same area with higher income levels.52
See Figure 11.
Moreover, Memphis as a whole ranks second among the 50 most-populous

51
U.S. Census Bureau. “2008-2012 American Community Survey.” American Fact
Finder. Table. Census.
http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_
12_5YR_S1901. Accessed March 2, 2014.
52
The Chronicle of Philanthropy. “How America Gives.” 2012. Web.
http://philanthropy.com/article/Interactive-How-America-Gives/. Accessed March 2,
2014.

25
American metropolitan areas in median percentage given to charity.53
We will
target these middle-class Americans who already donate a substantial portion of
their income because they should be more likely to support our organization’s
mission.
Target Market Growth
Destination Station will be located specifically in Midtown, a suburb of Memphis,
Tennessee. This area is a part of Shelby County, which grew 3.4% from 2000 to 2010
due largely to its increase in African Americans and Hispanics.54
In 2010

53
The Chronicle of Philanthropy. “How America Gives - Generosity in America's 50
Biggest Cities: a Ranking.” 2012. Web. Table.
http://philanthropy.com/article/Generosity-in-Americas-50/133675/. Accessed March 2,
2014.

54
Charlier, Tom. “Breaking News: Memphis Lost More Than 3,000 Residents Since
2000 Census.” Memphis Commercial Appeal. 2011. Web.
https://www.commercialappeal.com/news/2011/mar/16/memphis-population-dipped-
3000-census-shows/. Accessed March 3, 2014.

26
Memphis, specifically, had a population of 646,889.55
This number fell 0.5% from the
recorded population of the 2000 census. City Councilman Jim Strickland attributed
Memphis’ decline to people’s “concerns about crime and poor schools.” 56
However, in recent years the population of Memphis has been back on the rise,
growing 1.3% from April of 2010 to July of 2012.57
The population is also predicted to
grow 0.56% by 2015.58
See Figure 12. Some attribute Memphis’ growth to economic
drivers such as the prevalence of the transportation utilities industry.59
However, most
credit this specific population rebound to the current changes Memphis’ school system is
undergoing. In March of 2011, Memphis residents voted to merge their school district
with the Shelby County school district in hopes of improving the education system. This
merger is the “largest school district consolidation in American history.”60
Assistant chief
administrative officer for the city of Memphis, Maura Black Sullivan, said that there is

55
U.S. Census Bureau. “State & County QuickFacts.” U.S. Department of Commerce.
Web.
http://quickfacts.census.gov/qfd/states/47/4748000.html. Accessed March 2, 2014.

56
Charlier, Tom. “Breaking News: Memphis Lost More Than 3,000 Residents Since
2000 Census.” Memphis Commercial Appeal. 2011. Web.
https://www.commercialappeal.com/news/2011/mar/16/memphis-population-dipped-
3000-census-shows/. Accessed March 3, 2014.
57
U.S. Census Bureau. “State & County QuickFacts.” U.S. Department of Commerce.
Web.
http://quickfacts.census.gov/qfd/states/47/4748000.html. Accessed March 2, 2014.
58
Middleton, Erin and Murray, Matthew. “Population Projections for the State of
Tennessee, 2010-2030.” Tennessee Advisory Commission on Intergovernmental
Relations and The University of Tennessee Center for Business and Economic Research.
2009. Web. http://www.state.tn.us/tacir/PDF_FILES/Other_Issues/Population2010.pdf.
Accessed March 2, 2014.
59
Eubanks, James D. and Gascon, Charles S. “Transportation and Health Care Are
Pockets of Strength in Memphis' Slow Recovery.” The Regional Economist. 2013. Web.
https://www.stlouisfed.org/publications/re/articles/?id=2422. Accessed March 3, 2014.
60
Dillon, Sam. “Merger of Memphis and County School Districts Revives Race and
Class Challenges.” The New York Times. 2011. Web.
http://www.nytimes.com/2011/11/06/education/merger-of-memphis-and-county-school-
districts-revives-challenges.html?pagewanted=all&_r=0 . Accessed March 3, 2014.

27
now “a leveling off of movement from the city as [they] approach the merger of the
school systems.”61
Thus, as Memphis’ school system, one of the key reasons for the decline in 2010,
is improving, Memphis’ population is seeing relatively immediate effects. The middle
income families we are targeting who seek high quality education will be less likely to
move out of Memphis if the merge remains successful in the coming years. This should
provide a stable base of customers.
Customer Motivation
We surveyed 30 women to discover the most important factors mothers
consider when choosing an afterschool care program. See Figure 15. The survey was
conducted at the Piggly Wiggly located in Forestdale, a suburb of Birmingham, Alabama.
This suburb was selected because it has many similarities to Midtown, the suburb of
Memphis where Destination Station will be located. Both suburbs have a population

61
Branston, John. “Surprise! Memphis Gains Population Since 2010.” The Memphis
Flyer. 2013. Web.
http://www.memphisflyer.com/CityBeatBlog/archives/2013/05/23/surprise-memphis-
gains-population-since-2010. Accessed March 3, 2014.

28
between 19,000 and 24,000, a median age between 38 and 41, a median household
income between 36,000 and 42,000, and a poverty level between 17% and 20%.62
The
women surveyed were roughly 50% Caucasian and 50% African American and all
between the ages of 30 and 50. These women are representative of our target market
because they are mostly middle-class mothers living in a suburb comparable to Midtown.
Our survey found that customers care the most about safety, location, and cost.63
• Customers want a safe afterschool care program. Safety was ranked as the
most important factor in our survey. The peak time for juvenile crime and
victimization occurs between 3 PM and 6 PM.64
See Figure 13.

62
U.S. Census Bureau: American Fact Finder. “Community Facts.” Web.
http://factfinder2.census.gov/faces/nav/jsf/pages/community_facts.xhtml#none. Accessed
March 5, 2014.
63
Survey. “Childcare Survey.” March 4, 2014. Forestdale, Alabama.

64
Kang, Andrew and Julie Weber. “Opportunities for Policy Leadership on Afterschool
Care.” Sloan Work and Family Research Network. 2010. Web.
https://workfamily.sas.upenn.edu/sites/workfamily.sas.upenn.edu/files/imported/pdfs/poli
cy_makers5.pdf. Accessed March 5, 2014.

29
Figure 13
Therefore, it is critical for parents to find a safe location for their children after
school. Parents are looking for a center where they can leave their children in
good care while they are busy at work. They do not want to worry about their
child being left unsupervised or at risk for injury. For most full-time employed
parents, the time between the end of school and when they get home from work
“adds up to about 20 to 25 hours per week.” Therefore, many “look to afterschool
programs to satisfy their desire for safe, enriching experiences for their children
while they are working.”65
Because parents are concerned with safety, they are
looking for licensed childcare providers who have passed background checks and

65
Kang, Andrew and Julie Weber. “Opportunities for Policy Leadership on Afterschool
Care.” Sloan Work and Family Research Network. 2010. Web.
https://workfamily.sas.upenn.edu/sites/workfamily.sas.upenn.edu/files/imported/pdfs/poli
cy_makers5.pdf. Accessed March 5, 2014.

30
regular health and safety inspections.66
Destination Station will meet these safety
standards by becoming licensed by the Tennessee Department of Human
Services. We will also require all staff to pass background checks and we will
hold frequent health and safety regulation inspections. Lastly, we will require
parental signatures for pick up.
• Customers want a convenient location and a rich learning atmosphere.
Location was the second most important factor in our survey. Parents do not want
to drive a long distance to pick up their children from afterschool care. 67% of
American parents have said that convenience of location is a significant factor in
selecting an afterschool care program.67
Moreover, it is beneficial for children to
be nearby in case of emergencies. In the event that a child must leave early, being
far away presents a major inconvenience for parents and the child. Destination
Station will meet this need because it is located in a central Memphis zip code
that is within a few minutes of seven other zip code areas. See Figure 9. Being
near a major interstate also allows for quick access to and from many regions.
Furthermore, not only is the physical location important to parents but also the
idea of the type of atmosphere they are placing their kids in. Parents want their
kids’ afterschool care program to provide an educational environment “where

66
National Association of Child Care Resources & Referral Agencies. “The Economy’s
Impact on Parents’ Choices and Perceptions About Child Care.” 2010. Web.
http://www.naccrra.org/sites/default/files/publications/naccrra_publications/2012/econom
ysimpactonparentschoices.pdf. Accessed on March 5, 2014.
67
Afterschool Alliance. “America After 3 PM.” Web.
http://www.afterschoolalliance.org/AA3_Full_Report.pdf. Accessed March 5, 2014.

31
they can learn new skills through activities and interaction with other children.”68
Destination Station’s curriculum centers around stimulated interaction and
experiential learning. Moreover, our curriculum also brings unique enrichment
because we will expose the children to cultures around the world.
• Customers want affordable afterschool care. The third most important factor as
revealed by our survey is cost. Parents need to know that the price they are paying
is matching the quality of the service. 75% of parents rate affordable child care as
the most or one of the most important factors in helping working families decide
on an afterschool care program.69
Cost is an important issue to our target market
of middle-class families because they cannot afford the more expensive
afterschool care. 58% of parents agree that the cost of afterschool care limits their
options.70
Therefore, Destination Station must have reasonable prices to maintain
its customer base. One way we can make our services more affordable, and
therefore more attractive, to our target market is by offering sibling discounts and
scholarships. Another reason we will be attractive in the cost category is our
philanthropy. Our customers will have the satisfaction of knowing that their
money is funding our charitable efforts to serve inner city children.

68
National Association of Child Care Resources & Referral Agencies. “What Do Parents
Think About Child Care?” 2011. Web.
http://www.naccrra.org/sites/default/files/default_site_pages/2011/focusgrpreport_1.pdf.
69
National Association of Child Care Resources & Referral Agencies. “What Do Parents
Think About Child Care?” 2011. Web.
http://www.naccrra.org/sites/default/files/default_site_pages/2011/focusgrpreport_1.pdf.

70

32
Competitor Analysis
Direct Competitors
Destination Station has three major direct competitors: Lindenwood Life
Center, Evergreen Afterschool, and Idlewild Presbyterian Children’s Center.
1. Lindenwood Life Center is a locally run youth center in Memphis. For afterschool
care, there is an annual $45 registration fee per child in addition to the monthly tuition fee
that they charge. The monthly tuition is $195 for the first child and $145 for each
additional child. Payments are made in 10 equal installments. There is also a $25 fee for
late payments and a $1 per minute late pick up fee.71
Lindenwood is licensed by the Tennessee Department of Human Services and
approved by the Department of Education. A major strength of Lindenwood Life Center
is that it can serve a large number of customers because it has a capacity of 396 children.
This is over 200 more than any of the other 19 child-care providers listed for the same zip
code.72
Another strength of Lindenwood is its star rating components. Tennessee’s Star-
Quality Child Care Program evaluates providers who have qualified for the program in
several categories, rating them on a scale of 1 to 3 stars.73
Lindenwood has received 3
stars in every category: director qualifications, professional development, parent/family
involvement, ratio and group size, staff compensation, program assessment, and

71
Lindenwood Life Center. “After School Care.” Web. http://327lifecenter.com/life-
center-mini-site/after-school. Accessed March 3, 2014.

72
Tennessee Department of Human Services. “Shelby County Child Care Provider List
Zip Code: 38112.” Web. http://www.tn.gov/accweb/faces/providerZipList.jsp. Accessed
March 4, 2014.

73
Tennessee Star-Quality Program. “Background Information.” University of Tennessee
College of Social Work Office of Research and Public Service. 2011. Web.
http://tnstarquality.org/html/report_cards.htm. Accessed March 4, 2014.

33
developmental learning.74
Lindenwood also has an advantage over many other childcare
facilities because it is wheelchair accessible and provides transportation from the 9
schools it serves.75
However, the recent switch of start times for certain schools in Memphis’
district has had a negative affect on Lindenwood’s transportation schedule. Lindenwood
Life Center now has to pick up children in 6 schools getting out at the same time. Phil
Vaughn, director of the Life Center, said that this means he cannot “send a second bus
anywhere.” 30 kids will fit on each bus, but if any more than that sign up, Lindenwood
will have to turn them down.76
Another weakness of Lindenwood Life Center is that it
does not participate in the Child Care Certificate Program, “Tennessee’s assistance
program for low income and at risk children.”77
Because of this, Lindenwood is not
subsidized and does not receive the financial bonuses this program offers.
2. Evergreen Afterschool is a Memphis childcare facility located in Evergreen
Presbyterian Church’s gymnasium. The church staff partners with students from the
Kinney Program at Rhodes College to provide afterschool activities for the community.
Evergreen Afterschool charges $40 per child per week and $35 per sibling per week.
Registration is for the entire school year, not based on day or week, and the fees are non-

74
Tennessee Department of Human Services. “Child Care Provider Details: Lindenwood
Christian CCC/AS Program.” Web. http://www.tn.gov/accweb/faces/providerList.jsp.
75
Tennessee Department of Human Services. “Child Care Provider Details: Lindenwood
Christian CCC/AS Program.” Web. http://www.tn.gov/accweb/faces/providerList.jsp.

76
Roberts, Jane. “District Relents on Start Times in Some Schools.” The Commercial
Appeal. 2013. Web. http://www.commercialappeal.com/news/2013/jul/18/district-relents-
on-start-times-in-some-schools/. Accessed March 4, 2014.
77
Tennessee Department of Human Services. “Child Care- Certificate Program.” Web.
http://state.tn.us/humanserv/adfam/cccp.html. Accessed March 4, 2014.

34
refundable and non-transferable. Additional fees include a $1 per minute late pick up fee,
a $35 returned check fee, and a $10 late payment fee.78
A strength of Evergreen’s afterschool care program is that Evergreen
Presbyterian Church is an “adopter” of Snowden Elementary School, meaning it supports
the school and therefore has a connection with the largest public elementary school in the
area.79
Another strength Evergreen Afterschool has is the quality of its workers. Staff
members are required to have a high school diploma or equivalent, and the program
maintains a ratio of 10 children per staff member. All staff members are also required to
complete twelve child related education hours, approved by Department of Education,
per year.80
The overall afterschool program is also approved and licensed by the
Department of Education. Moreover, according to Tennessee’s Department of Human
Services, Evergreen Afterschool has the strength of being wheelchair accessible and
offering scholarships and sibling discounts.81
Although Evergreen Afterschool is licensed by the Department of Education,
it has not participated in Tennessee’s Star-Quality Program.82
This is a weakness for
Evergreen because there are no ratings listed for its afterschool program. Evergreen
Afterschool thus cannot display any stars on its license as other childcare providers can,

78
Evergreen Presbyterian Church. “Afterschool.” Web.
http://www.evergreenmemphis.org/afterschool1.html. Accessed March 4, 2014.
79
USA.com. “38104 Zip Code Public Schools.” Web. http://www.usa.com/38104-tn-
public-schools.htm. Accessed March 4, 2014.
80
81
Tennessee Department of Human Services. “Child Care Provider Details: Evergreen
Presbyterian After School Program.” Web.
http://www.tn.gov/accweb/faces/providerList.jsp. Accessed March 4, 2014.
82

35
such as Lindenwood Life Center. This may make customers unsure of the quality of the
program, since there are no objective judgments or standardized results that they can use
to compare Evergreen with its competitors. Another weakness is that Evergreen
Afterschool does not provide transportation.83
This makes it difficult for parents who are
not able to pick up their children from school, and thus may result in fewer customers.
Evergreen Afterschool also has the weakness of limited facilities. Its program is located
in a gymnasium, and so it cannot have as many simultaneous activities without being
somewhat disorganized and chaotic.
3. Idlewild Children’s Center is a children’s ministry of Idlewild Presbyterian Church,
located in Memphis. Its afterschool program serves children in kindergarten through
seventh grade who attend any of three public elementary schools, including Idlewild,
Campus School, and Snowden. The weekly fee for afterschool care is $50 per child per
week.84
Idlewild Children’s Center is approved by the Department of Education and
licensed by Tennessee’s Department of Human Services.85
One strength of Idlewild is
that it offers free all-day or partial-day care on days that schools are closed for children
enrolled in the program.86
This may be an incentive for working parents who would have
to find care on such days. Another strength of Idlewild is that it is wheelchair accessible

83

84
Idlewild Presbyterian Church. “Idlewild Children’s Center.” Web.
http://idlewildchurch.org/daycareandkindergarten. Accessed March 4, 2014.
85
Tennessee’s Department of Human Services. “Child Care Provider Details: Idlewild
Presbyterian Children's Center.” Web. http://www.tn.gov/accweb/faces/providerList.jsp.
86

36
and offers transportation from the schools it serves. Idlewild Children’s Center has also
received an overall 3 star rating by the Star-Quality Program, including 3 stars in the
categories of director qualifications, professional development, parent/family
involvement, staff compensation, program assessment, and developmental learning.87
While Idlewild Children’s Center earned 3 stars in almost all categories, in
the category of ratio and group size it received 2 stars. This reflects an area of weakness
for Idlewild, as its rating reveals it to be an area that it could improve in. Another
weakness is that Idlewild does not offer discounts for afterschool services and it is not a
part of the Child Care Certificate Program that would allow Idlewild to be subsidized.88

87

88

37
Indirect Competitors
Destination Station has three major indirect competitors: Memphis Athletic
Ministries, care provided by nannies, and afterschool care provided by individual schools
like Grace St. Luke’s.

1. Memphis Athletic Ministries (MAM) uses organized sports to bring youth together
after school. MAM forms activity groups of 10 to 15 youth to participate in community
sport leagues, including basketball, flag football, and golf, in order to unite youth from
different geographic, cultural, and socio-economic backgrounds. By doing so, MAM
takes the opportunity to teach its young participants life lessons like academic diligence
and financial literacy, while encouraging them through gospel teaching. For a team
comprised of kids ages 8 and under, the total registration fee is $200. If a team of kids
older than 8 years registers, the cost is $250. However, a new MAM participant can
easily join a team that is already formed without having to contribute to the team’s
registration fee.89
Since Memphis Athletic Ministries first started in 1998, MAM has grown
considerably. One of the strengths of MAM is that they now operate out of 11 locations,
scattered across Memphis, including one in Midtown.90

The main office that MAM
operates out of is a “state-of the art sports and recreation complex” called Memphis
Grizzlies Athletic Center in honor of the $1 million contribution made by the Memphis

89
Memphis Athletic Ministries. “About Us.” Web. http://mamsports.org.
Accessed
March 5, 2014.
90
Accessed
March 5, 2014.

38
Grizzlies Charitable Fund.91

This is just one example of over 100 partnerships that MAM
has formed that makes it an established and well-funded competitor.92

Another aspect of
MAM that makes its organization unique is how it is able and determined to use sports in
accomplishing its goal of community unification. Unlike most after school care programs
that only impact a certain neighborhood or group, neighborhood league competition
allows for MAM to broaden its reach in the Memphis community as a whole. Out of all
of the community recreation leagues that are available around Midtown, Memphis
Athletic Ministries poses the most competition for Destination Station because of its
facilities, humanitarian efforts, and wide influence.
Being that MAM’s primary draw is through sports and recreation for “at-risk
youth in urban Memphis,” the organization heavily caters to a certain demographic of
people.93

Out of the 540 most active participants of MAM, 99% are African-American.94

This can be considered a weakness of MAM because the African-American race only
makes up 30% of the population in Midtown overall but is the dominant race at MAM
events, meaning the other 70% of the Midtown population is not being served by

91
National Basketball Association. “Memphis Grizzlies Charitable Foundation: Partner
Profile - Memphis Athletic Ministries (MAM).” NBA. 2014. Web.
http://www.nba.com/grizzlies/community/foundation_partner_profile-mam.html.
92
Halftime: Success to Significance. “All About the Numbers: Gib Vestal.” Web.
http://halftime.org/wp-content/uploads/2011/06/TheSecondHalf_Vestal.pdf. Accessed
March 5, 2014.
93
Evangelical Christian School Connectivity. “SLI and Memphis Athletic Ministries.”
2013. Web. http://www.ecseagles.com/eagles-eye/connectivity-news-detail/connectivity-
article-page/index.aspx?LinkId=4936&ModuleId=204. Accessed March 5, 2014.
94
Accessed
March 5, 2014.

39
MAM.95

Furthermore, MAM recreational activities cater more towards boys, who make
up 75% of its participants.96

This leaves opportunity for Destination Station to adequately
serve both genders. There are also limitations to the choices participants have when
selecting a sports team. Besides the basketball program it is known for, MAM only offers
other programs in golf, flag football, and soccer.97
2. Nanny services also offer afterschool care options to parents. According to the
Memphis Daily News, busy families often use nannies. There are two main methods
parents often utilize to find a nanny: through word of mouth or through websites.
Websites such as Care.com connect families looking for childcare with babysitters and
nannies seeking employment.98
While joining and creating a profile is free, Care.com
charges for its services through two options: a three-month plan for $70 or a twelve-
month plan for $140.99
In addition to these fees, the customer must also pay for the
specific nanny’s services. The rates nannies charge vary, and depend on many factors
such as location, quality of care, and services provided. The national average rate for
nannies is $11.73 per hour and ranges, depending on the state, from $8.26 to $15.19 per

95
City-data.com. “Midtown Neighborhood in Memphis, Tennessee.” Web.
http://www.city-data.com/neighborhood/Midtown-Memphis-TN.html. Accessed March
5, 2014.
96
Accessed
March 5, 2014.
97
National Basketball Association. “Memphis Grizzlies Charitable Foundation: Partner
Profile - Memphis Athletic Ministries (MAM).” NBA. 2014. Web.
http://www.nba.com/grizzlies/community/foundation_partner_profile-mam.html.
98
Agee, Susan. “Childcare Options: Busy Memphis Families Find Nannies as Good
Alternative.” The Memphis Daily News. 2013. Web.
https://www.memphisdailynews.com/news/2013/nov/20/childcare-options/. Accessed
March 5, 2014.
99
Bestnannysites.com. “Compare 6 Best Nanny Sites.” Web.
http://www.bestnannysites.com/.
Accessed
March
5,
2014.

40
hour.100
Care.com lists Memphis’ starting rate for babysitters and nannies as $9.50 per
hour.101
A major strength of nanny services is trust. Parents have the “opportunity to
get to know the nanny as a person, so that [they] are able to build a trust with this
person.”102
This relieves some of the parents’ anxiety and gives them a feeling of
security. Another strength of nanny care is personalized attention. A nanny is hired to
specifically cater to his or her employer’s children only. Thus, nannies may be able to
meet more individual needs than a childcare center.103
Furthermore, hiring a nanny also
has the advantage of more flexible transportation options. Parents have the option of
hiring a nanny who has his or her own car. This not only allows the nanny to pick up the
children and bring them directly home but also allows the nanny to take them to various
places around the city if needed or wanted.104
Our survey revealed that the main weaknesses of nanny services are lack of
child interaction and lack of learning environment. The mothers surveyed said that the

100
Bernard, Tara. “Choosing Child Care When You Go Back to Work.” The New York
Times. Web. http://www.nytimes.com/2013/11/23/your-money/choosing-child-care-
when-you-go-back-to-work.html?_r=0. Accessed March 5, 2014.
101
Care.com. “Memphis Child Care.” 2014. Web. http://www.care.com/memphis-child-
care. Accessed March 5, 2014.
102
Berkowitz, Heather. “The Benefits of Hiring a Nanny Vs. Daycare.” ModernMom.
2013. Web. http://www.modernmom.com/9041c086-4d5a-11e3-afe0-
bc764e0546c6.html. Accessed March 5, 2014.
103
American Council for Social Development. “Advantages Of Nanny Care Over
Daycare.” Web. http://www.unasur-social.org/advantages-of-nanny-care-over-
daycare.html. Accessed March 5, 2014.
104
American Council for Social Development. “Advantages Of Nanny Care Over
Daycare.” Web. http://www.unasur-social.org/advantages-of-nanny-care-over-
daycare.html. Accessed March 5, 2014.

41
reasons they would choose an afterschool center over a nanny were for their children to
experience interaction with other children and be in a learning environment.105
A child cared for by a nanny may not receive the same stimulation as he or she would
playing with other children. Additionally, there is no supervision of a nanny while he or
she is alone with a child. This could result in inappropriate care that might go
unnoticed.106
3. Afterschool provided by individual schools like Grace St. Luke’s, although mostly
limited to the students who attend those schools, provide convenient care for children
whose parents might be working later into the day. In a National Center for Education
Statistics report on afterschool programs in public elementary schools, 56% of public

105
106
University Human Resources: University of Maryland. “Nannies/Babysitters---In
Home Care.” Web. http://www.uhr.umd.edu/Family_care/includes/NannyAdvDisadv.pdf.

42
elementary schools were found to have a formal afterschool program.107
Public schools
are reported to be the largest provider of afterschool programs.108

Schools who offer
afterschool care are considered to either have a stand-alone program that focuses on one
type of service (e.g., only supervision) or a broad-based program that offers a
combination of services (i.e., academic enrichment and cultural activities).109
Grace-St.
Luke Episcopal School’s (GSL) afterschool care is an example of a successful broad-
based program in Midtown Memphis that exemplifies what Destination Station would
consider to be competition within a private school. For children between the ages of 4
and 14, Grace-St. Luke’s offers 5 days of afterschool care a week for $200 a month. For
children under the age of 4, care is provided 2 or 3 days a week, for $100 or $150 a
month, respectively.110

In general, the strength of afterschool programs being located at individual
schools involves convenience. Afterschool care at schools like Grace-St. Luke’s
eliminates the hassle that parents would have had to encounter by transporting their
children to off-campus afterschool activities. On one of the 30 reviews posted about
Grace-St. Luke’s on GreatSchools, a GSL parent remarked that the afterschool program

107
National Center for Education Statistics. “After-School Programs and Activities:
2005.” Institute of Education Sciences. 2006. Web.
http://nces.ed.gov/pubs2006/afterschool/. Accessed March 5, 2014.
108
109

110
Grace-St. Luke’s Episcopal School. “After School Care.” Web.
http://www.gslschool.org/auxiliary_programs/after_school_care.
Accessed March 5,
2014.

43
available for working parents is “ideal.”111
In addition, GSL offers afterschool care for a
wide range of ages, from 2 year olds to 14 year olds. In this way, GSL parents benefit
from not having to send their children to different programs because of age differences.
One of GSL’s biggest strengths is the fact that the program offers optional enrichment
classes, varying from art classes to chess lessons. For an additional cost that depends on
the type of class offered, GSL parents can satisfy the different interests of their children
without ever having to leave the GSL campus.112

50% of the people who wrote a review
online about GSL commented on how its teaching staff was incredibly qualified and
attentive, which indicates the sort of quality instruction Grace-St. Luke’s offers.113
Similar to afterschool programs offered at other schools, Grace-St. Luke’s
only allows GSL students to enroll in its program. This is a weakness that limits GSL’s
customer base considerably. In addition, GSL afterschool care is only offered to kids ages
4 to 14 five days a week. However, on average, children in afterschool programs only
participate three days per week.114
Thus, older children who would have otherwise
participated in the GSL afterschool care program four or less days a week are not able to
because the program is only offered five days a week for their age group. Therefore, this

111
GreatSchools. “Grace-St. Luke’s Episcopal School.” Web.
http://www.greatschools.org/tennessee/memphis/1640-Grace-St.-Lukes-Episcopal-
School/?sortBy=&tab=reviews&page=1#revPagination.
112
Grace-St. Luke’s Episcopal School. “After School Care.” Web.
http://www.gslschool.org/auxiliary_programs/after_school_care.
Accessed March 5,
2014.
113
GreatSchools. “Grace-St. Luke’s Episcopal School.” Web.
http://www.greatschools.org/tennessee/memphis/1640-Grace-St.-Lukes-Episcopal-
School/?sortBy=&tab=reviews&page=1#revPagination.

114

44
should be considered as another factor that weakens Grace-St. Luke’s program and
customer base.
Customer Involvement
Choosing an afterschool program requires medium to high involvement on
the parents’ part because it is not an impulse purchase. Parents must research for
programs that suit their schedule, budget, program requirements (academics, sports, etc.),
and special needs, while also considering their children’s interests and preferences.115
Besides having to figure out logistical requirements like price and location,
parents must factor in the quality of service and supervision that their children will
receive at an afterschool care center. “More and more, research tells us that children’s
healthy development depends on safe and positive experiences,” so it is critical that
children are appropriately matched with qualified and accredited care centers. In fact, the
U.S. Department of Health and Human Services funds programs like Child Care Aware
that helps families learn more about the elements of quality childcare.116
Choosing a
center for afterschool care involves some risk for parents, and thus many will seek
recommendations in an effort to reduce their anxiety. When parents determine the best
match for their child, the initial risk results in great reward since their children will be
able to feel comfortable, safe, and entertained after school.

115
Federal Occupational Health. “FOH’s WorkLife4You Program Helps Parents Find
Before-and After-School Care.” U.S. Department of Health & Human Services. Web.
http://www.foh.dhhs.gov/Productfocus/Sept04/WL.asp. Accessed March 3, 2014.
116
Child Care Aware. “Choosing Child Care.” National Resource Center for Health and
Safety in Child Care. Web. http://www.childcareaware.org/parents-and-guardians/child-
care-101/choosing-child-care. Accessed March 3, 2014.

45
Repeat Customers
Parents will intend on keeping their children as regular attendees of an
afterschool program as long as they view the center's service well worth the price. When
their kids benefit from the experience at an afterschool care center, parents are convinced
about sending them there on a regular basis. An Afterschool Alliance study found that in
2009, 89% of parents were satisfied with the afterschool programs their children attended
and overall satisfaction with programs was high and remained steady.117
Since finding an
alternative afterschool care program would involve so much hassle, parents are not likely
to change programs if they are already satisfied. For this reason, Destination Station will
provide quality service that keeps a steady customer base returning.
In addition, the Afterschool Alliance study found that "parents of children in
afterschool care recognize the benefits of participation, which include helping with social
skills, keeping kids safe, providing opportunities to be physically active, and helping their
child succeed in school."64
As long as parents see how their children's involvement in
Destination Station is valuable and beneficial, our center can mostly rely on a repeating
customer base. Although afterschool programs rely heavily on repeat customers, it would
also be beneficial to acquire new customers through various marketing efforts such as
offering discounts to clients who refer us to other families.

117
Afterschool Alliance. “America After 3 PM.” 2009. Web.

46
Figure 15: Survey Questions

47
Product, Pricing, Distribution and Promotion Strategies
Product/Service
Who are we?
Destination Station is a nonprofit youth recreational center that offers afterschool
care services in Memphis, Tennessee. It provides children with a safe and fun
environment through a unique world travel theme. A bus ride designed to feel like an
airplane flight brings the children to a center, which transforms into a new world
destination theme each month. Each day Destination Station provides activities related to
the theme, giving children a fun, cultured experience. Parents will be able to stay at work
in the afternoon and evening with the knowledge that their children are receiving quality
care.
Destination Station is also unique because it serves the nearby inner city area,
Binghampton, giving its customers the chance to not only provide child care for their
children but also to give back to the community. According to the Binghampton
Development Corporation, this inner city community suffers from “severe poverty and
lack of economic assets.” 48% of the households have incomes under $20,000, and 33%
of the households earn no wage or salary income.118
By providing free childcare for these
families every Saturday, we will help the parents and simulate travel experiences for
children who may otherwise not have the opportunity to go on vacations.
In order to support this cause, we will charge suburban families for afterschool
care services Monday through Friday, and use the proceeds to provide care for inner city
children on Saturdays. Thus, with each member of our afterschool program, money will

118
Binghampton Development Corporation. “About Binghampton.” 2013. Web.
http://bdcmemphis.org/home/binghampton.html. Accessed March 17, 2014.

48
be donated to our weekend program for inner city children. For the suburban program on
Monday through Friday, we will transport the children from each school and provide care
at our center until 6 P.M., when parents will be required to pick up their kids. For the
inner city program on Saturday, we will offer three options: morning, afternoon, or full
day care. Our buses will transport from two locations: Howsee Park and Binghampton
Park. See Figure 16. These locations provide landmarks that are walking distance from
residential housing.119
The morning session will pick up kids at 9 A.M. and drop them off
at 12 P.M. We will then pick up kids for the afternoon session at noon and drop them off
at 3 P.M. The inner city children will have the option of staying for both the morning and
afternoon session as well.

119
Google Maps. “Satellite Map of Memphis, Tennessee.” Web.
www.google.com/maps/place/Memphis. Accessed March 17, 2014.

49
What benefits do we provide our customers?
Destination Station will provide customers with a service that benefits them both
psychologically and emotionally. Afterschool care programs can have several positive
effects on a child’s psychological development. Studies have shown that participation in
organized activities out of school is associated with “heightened school engagement and
attendance, better academic performance and interpersonal competence, and higher
aspirations for the future.”120
Not only are there psychological benefits for the children
but also for the parents. In a UCLA survey, three quarters of parents indicated that
enrolling their children in an afterschool care program made them significantly less
worried about their children’s safety, gave them more energy in the evening, and
considerably saved their time.121
Along with psychological benefits, Destination Station will also provide
emotional benefits to children and parents. A stimulating and comfortable environment

120
Mahoney, James. “Organized Activities as Developmental Contexts for Children and
Adolescents.” Lawrence Erlbaum Associates, Inc. 2005. Web.
http://www.rcgd.isr.umich.edu/garp/articles/mahoney05.pdf. Accessed March 10, 2014.
121
Afterschool Alliance. “Facts and Research: Afterschool Programs Making a
Difference.” Web. http://www.afterschoolalliance.org/after_out.cfm. Accessed March 10,
2014.

50
aids a child’s emotional development. Research has shown that participation in
afterschool programs accompanies “decreased behavioral problems, improved social and
communication skills, and lower levels of depression and anxiety.”122
Afterschool
programs have also often proven to improve “youths’ feelings of self-confidence and
self-esteem.”123
Furthermore, there are emotional benefits to the parents as well.
Destination Station appeals to emotional gratification in the parents because of its
philanthropic mission. The suburban families will have the satisfaction of knowing that
their money is benefiting a nearby community in need. While most psychological and
emotional benefits are standard within afterschool care, our philanthropic mission is
unique to our center and is thus a benefit we offer that the competition does not.
Life Cycle Stage
The child and youth services industry is in the mature life cycle stage because the
number of establishments is projected to grow at a rate of 0.38% and the number of sales
is estimated to grow at a rate of 7.5%.124
These growth rates suggest that the industry is
fairly stable, “characterized by few changes in the market shares of leading competitors
and steady prices.”125
Although entering a mature industry can be challenging for that
reason, there are still niches left unfilled. Specifically, “there is a strong and growing

122
Wong, Amy. “Secrets of Successful After School Programs: What Research Reveals.”
Harvard Graduate School of Education. 2009. Web.
http://www.uknow.gse.harvard.edu/learning/LD314-608.html. Accessed March 17, 2014.
123
Healthy City: Advancement Project. “The Benefit of After School Programs.” 2012.
Web.http://www.advancementprojectca.org/sites/default/files/imce/Benefits%20of%20Af
ter%20School%20Programs%20-%20handout.pdf. Accessed March 10, 2014.
124
125
Mullins, J.W. and Walker, O.C. “Marketing Strategies for Mature and Declining
Markets.” McGraw-Hill, Inc. 2014. Web.
http://answers.mheducation.com/business/marketing/marketing-strategy/marketing-
strategies-mature-and-declining-markets. Accessed March 17, 2014.

51
demand in [the United States] for quality afterschool programs,” and there are several
schools in the Midtown suburb that our competitors do not serve.126
By strategically
marketing our convenient location, unique program theme, and philanthropic mission,
Destination Station will be able to provide services within the afterschool care niche.
Pricing
What will we charge?
Destination Station will charge a $50 annual registration fee along with $50 per
child per week. However, we will provide discounts for siblings. The price for each
additional child within the family will be $40 per week instead of $50. Payments will be
issued at the end of each month. In order to ensure punctuality, we will have a late
payment fee of $10. After 6:10 P.M. we will also charge a late pick up fee of $1 per
minute.
Donors must also be considered in addition to our customers. Destination Station
will reach out to local churches, businesses, and individuals for donations. These
donations will help subsidize the cost of our philanthropy. If we are able to obtain
significant contributions from the community, we will be able to lower our price based on
further market research.
How do we compare?
Our competitors’ prices per week range from $40 to $55, and our top competitor
also charges a $45 registration fee. 100% of the women we surveyed said that they would
be more likely to send their children to an afterschool care program if the proceeds went

126
Concept to Classroom. “Why Has Demand for Afterschool Programs Increased So
Significantly?” Educational Broadcasting Corporation. Web.
http://www.thirteen.org/edonline/concept2class/afterschool/index_sub6.html. Accessed
March 17, 2014.

52
to offering the same services, free of charge, to inner city families once a week.127
But, in
order to cover the cost of our charity, we need to charge above our competitors. It is
likely that many customers would be willing to pay more for our service due to our
philanthropic efforts. According to a Stanford Social Innovation Review article, “some
customers value and are willing to pay more for a nonprofit’s services or products than
others.”128
We will therefore be using a skim price strategy because the benefits we offer
will allow us to charge a higher price. As long as we can prove to our customers that the
benefit of giving back to the community is worth the price, we will remain attractive to
suburban families.
Another incentive parents would have to choose our program is tax deduction.
Being a nonprofit, we will be eligible to apply for tax exemption. Therefore, while
parents would have to pay slightly more for our service, they would not have to pay extra
to the government. An additional way Destination Station will remain affordable is by
offering scholarships to families with financial need. We will have applications available
each summer. Before the start of every school year, a committee will review the
applications and determine scholarship amounts. We will also provide benefits for repeat
customers. Every two years a family remains with our afterschool program, we will
provide a 15% discount on the registration fee. These financial aid measures will show
customers that Destination Station is committed to providing affordable service.

127
128
Mohammed, Rafi. “Nine Tips to Better Nonprofit Pricing.” 2010. Stanford Social
Innovation Review. Web.
http://www.ssireview.org/blog/entry/nine_tips_to_better_nonprofit_pricing. Accessed
March 17, 2014.

53
Competitor 1: Lindenwood Life Center is a large, locally run youth center. Its
established relationship with the community and high-quality care ratings allow
Lindenwood to charge a higher price. Lindenwood charges a $45 registration fee, as well
as $195 per child per month and $145 per sibling per month. With the school year being
about 10 months of the year and 36 total weeks, this amounts to approximately $54.17
per child per week and $40.28 per sibling per week.129
Competitor 2: Evergreen Afterschool charges $40 per child per week and $35
per sibling per week. It maintains the lowest price of the competition, while still boasting
quality workers due to its education requirements.130
Competitor 3: Idlewild Children’s Center serves three elementary schools in the
area, charging $50 per child per week. While it does not have any sibling discounts, it
offers free all-day or partial-day care on days that schools are closed for children enrolled
in the program.131

129
Lindenwood Life Center. “After School Care.” Web. http://327lifecenter.com/life-
center-mini-site/after-school. Accessed March 3, 2014.
130

131

54
Distribution/Location
Location is critical in the child and youth services industry, since this industry
targets families. According to the Bureau of Labor Statistics, most American parents are
employed. In 59% of married-couple families both parents are working, in 67% of single
mother households the mother is employed, and in 81.6% of single father households the
father is working.132
This reflects “the proportion of single-parent families and of families
with two parents working outside the home [that] has grown dramatically in the last few
decades.”133
Thus, time becomes increasingly valuable for these busy parents, because
work consumes such a
large portion of their day
and must be balanced with
their children’s schedules.
See Figure 18. Therefore,
convenience is a major
factor for parents who are
looking to save time on
transportation to and from
places they must take their
children. Figure 18

132
Bureau of Labor Statistics. “Employment Characteristics of Families - 2012.” U.S.
Department of Labor. 2013. Web. http://www.bls.gov/news.release/pdf/famee.pdf.

133
Concept to Classroom. “Why Has Demand for Afterschool Programs Increased So
Significantly?” Educational Broadcasting Corporation. Web.
http://www.thirteen.org/edonline/concept2class/afterschool/index_sub6.html. Accessed
March 17, 2014.

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