The CMO Survey - Highlights and Insights Report - Aug 2019
Mountain High Balloons Feasibility Report
1. To: Dr. Levallet
Professor Keifer
Professor Marchese
Professor McElfresh
From: Team 2
DezJianna Baker
Brett Kubaszewski
Olivia Musci
Jacob O’Brien
Logan VanVoorhis
Date: April 13, 2015
Subject: Business Concept & Feasibility Analysis: Mountain High Balloons
________________________________________________________________________
The attached report, requested by the senior partners of Copeland Associates, is an explanation of a startup
company in the tourism industry. Through research and brainstorming, we discovered success in the tour
operating sector of the industry. Our company, Mountain High Balloons offers hot air balloon flights in the
Gatlinburg, Tennessee area surrounding the Great Smoky Mountains. The report discusses the business
concept and the feasibility of the company.
The report addresses:
· Overview of the tourism industry
· Indirect and direct competition
· Business concept of Mountain High Balloons
· Demand scenarios
· Integrated marketing strategy
· Information Systems strategy
· Financial Analysis
After thorough primary and secondary research and a review of projected financials, we have found that
Mountain High Balloons will be a feasible company. Our financial analysis previewed financial growth for
the future and our demand scenarios indicate that we will receive a significant amount of customers.
We would like to especially thank senior partners of Copeland Associates for their help during the making
of this report. We would enjoy your feedback and recommendations and have provided our contact
information below. We thank you for the opportunity to create this report.
db094512@ohio.edu
bk903811@ohio.edu
om631312@ohio.edu
jb602213@ohio.edu
lv824012@ohio.edu
DezJianna Baker
Brett Kubaszewski
Olivia Musci
Jacob O’Brien
Logan VanVoorhis
2. Prepared for:
Copeland Associates
Dr. Nadège Levallet
Professor John Keifer
Professor Tom Marchese
Professor Luke McElfresh
Prepared by:
Team 2 MID 107
DezJianna Baker
Brett Kubaszewski
Olivia Musci
Jacob O’Brien
Logan VanVoorhis
April 13, 2015
3. Executive Summary
Copeland Associates were asked to build a feasible business scheme within the categories of tourism, lodging, and
recreational camps. This report provides an overview on our business, Mountain High Balloons, which is located in
Gatlinburg, Tennessee and gives customers a beautiful, scenic view around the Great Smoky Mountains. The following
report shows our business concept, marketing strategy, information systems, and financials for our company and
ultimately shows that we are a feasible company in the upcoming years.
External Analysis
Through our findings in the tourism industry, local market, and competition of tourism in the Great Smoky Mountains,
Copeland Associates determined that there is a great chance to be successful in the current market, even though the
competition remains relatively high. There are three direct hot air balloon competitors in our local market, however
none are located as close as we are to the actual mountains.
Business Concept
Copeland Associates believe that the large number of tourists will allow our business to thrive within the local market.
There are currently three other hot air balloon companies in our local market, with our company being the closest and
most convenient to the Smoky Mountains. Copeland Associates believes that our location alone will allow us to
become an immediate contender in the market. Also, Mountain High Balloons will partner with a local business
around the Smoky Mountain region where we will advertise their business on our balloon for a fixed cost.
Demand
With many phone calls and conversations with owners of other hot air balloon businesses, two demand scenarios were
created to show that our business is feasible in the market. Our first demand scenario compares two local benchmark
companies. In this scenario, we compared our maximum capacity, annual sales, flights per day, and customers per day.
Our second demand scenario calculates the percentage of people that will ride a hot air balloon in the Smoky
Mountains, which we then were able to calculate our average customers per day and our average sales per day.
Marketing
Social media, including Facebook and Twitter, are two of our major sites where Mountain High Balloons can get our
business promoted and shared within all demographics all over the country. Our website allows customers to look at
pictures of past rides, plan for an upcoming trip, or talk directly to one of our employees with a quick phone call. We
will also have two billboards located on I-75 and near Dollywood amusement park, and our chase vans are covered
with our logo and mission statement. Mountain High Balloon’s store design is crisp and clean with the friendliest
employees in the business.
Financial Analysis
Through extensive research, Copeland Associates has calculated that $200,300 is needed in order to start our business.
We believe we can reach our demand due to the incredible amount of tourists in this region of the U.S, especially the
Great Smoky Mountains compared to other national parks. Through financial projections, there is evidence to prove
that Mountain High Balloons is worth the investment.
Conclusion
Based on the research of our local market, business concept, marketing strategy and financial projections, Copeland
Associates has found that Mountain High Balloons is a solid investment choice and has a promising and stable future
growth.
4. Table of Contents
❖ Introduction
❖ Business Environment
➢ Industry
➢ Competition
➢ Market
❖ Business Concept
➢ Overview
➢ Target Market
➢ Location
➢ Services
➢ Pricing
➢ Equipment
➢ Technology
➢ Employees
❖ Demand Scenarios
➢ Comparable Markets
➢ Industry
➢ Demand Scenario Matrix
❖ Marketing Strategy
➢ Brand Identity
➢ Social Media
➢ Website & Advertising
➢ Marketing Mix
❖ Information Systems Strategy
➢ Overview
➢ Reservations
❖ Financial Analysis
➢ Explanation & Feasibility
❖ Conclusion
❖ References
❖ Appendices
➢ Appendix A: Porter’s Five Forces
➢ Appendix B: PEST Analysis
➢ Appendix C: Business Model Canvas
➢ Appendix D: Target Audience Blueprint
➢ Appendix E: Concept Grid
➢ Appendix F: Perceptual Graph
➢ Appendix G: Brand Identity Model
➢ Appendix H: Store Design
➢ Appendix I: Website & Social Media
➢ Appendix J: Marketing Plan
➢ Appendix K: Financials
➢ Appendix L: Local Company Competition
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6. Introduction
The objective of this report is to develop a startup company that will enter the competitive market of the tourism
industry. Copeland Associates’ goal is to examine and determine the feasibility of opening up a hot air balloon
company near the Great Smoky Mountains. The business concept for our company, Mountain High Balloons, located
in Gatlinburg, Tennessee, is to offer a hot air balloon tour that flies a thrilling, scenic route on the outskirts of the Great
Smoky Mountains National Park. Copeland Associates believe that this business will be feasible in this market based
on information that has been derived from conducting primary and secondary research. Demand scenarios were
calculated and weighted to determine the amount of customers the company will receive. The target market is
adventure-seeking couples and families visiting the Great Smoky Mountains. Location plays a key role in the success
of the business, which is why Mountain High Balloons will be located near the Smoky Mountains. A large supply of
potential passengers is ensured due to being in a highly populated tourist location.
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Overview
Business Mission and Vision
Figure 1.1: Mission & Vision
7. The tourism industry in the United States is heavily dependent on the economy’s standing. With that being said, the
most substantial factors that contribute to whether or not people decide to travel are consumer spending and disposable
household income. The industry is currently experiencing a recovery following a difficult two years during the
recession. According to IBIS World, tourism as a whole had to deal with a drop in travel spending in 2008 and 2009
(IBISWorld, 2015). Therefore, the domestic tourism industry has a strong relation to the economy. Economic rising
contributes to greater amounts of disposable income and more travel spending. On the contrary, when the economy is
declining, unemployment rates rise and household income decreases, which puts less money in tourists pockets to
spend on vacationing and traveling.
Industry
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Transportation, 36.6%
Accommodations, 20.5%
Recreation &
Entertainment, 10.2%
Food &
Beverage,
15.9%
Other,
17.1%
(IBISWorld, 2015)
Figure 2.1: Industry Market Share
With technology trends constantly improving, United States air travel is becoming more price friendly and safer than
ever before. Higher disposable incomes have made leisure travel available to more and more Americans. Additionally,
market reach for many businesses is growing due to new information systems and expansion of the internet. Lately,
teleconferencing and video conferencing trends have become mainstream because of their availability and
affordability. Although they are becoming popular in the business world, these trends are still not pervasive enough to
slow the use to domestic flights. Domestic travel peaked at 681.9 million departures in 2007 before falling four
percent in 2008 and an additional 1.1 percent in 2009. During the five years to 2014, the number of domestic trips is
expected to grow an annualized 1.1 percent, surpassing 2007 numbers for the first time. Despite downturns in the
amount of international tourists visiting the United States due to the recession, the long-term trend in international
travel still shows growth. Over the five years to 2014, inbound trips made by non-US residents increased at an average
rate of 5.6 percent per year. (IBISWorld, 2015)
Tourism has been a popular attraction among
United States citizens for decades. It is
natural human instinct to want to get out and
explore new places. According to IBIS
World, there are four main categories related
to the tourism industry: accommodation
services; transportation; food services and
dining places; and recreation, entertainment,
and shopping (IBISWorld, 2015). The market
share for the industry can be seen in Figure
2.1. In the United States, the tourism industry
accounted for $960 billion in revenue in 2014
(Statista, 2015). For this project, Copeland
Associates zeroed in on the accommodation
services category and focused primarily on
operating a tour.
Overview
Trend
Opportunities & Threats
8. The Copeland Associates believe that there is plenty
of opportunity to operate business within this area. On
average in the last ten years, 9.4 million tourists visit
the Great Smoky Mountains annually. This is a 10.2
percent increase from 2004 to 2014 (NPS, 2015).
Gatlinburg, Tennessee’s name seems to promote itself
by being the most popular National Park in the
country. To attract customers, Mountain High
Balloons will differentiate product offerings, create a
valuable experience for customers, and partner with a
local business that will offer us money to advertise for
them from an aerial view. Recognizing the
competition that already exists and being able to
operate within their market will be a key factor in
maintaining a successful business.
Competition
Figure 2.2: Local Competition
(Google Maps, 2015)
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Direct competitors in this industry compete based off of their services offered. They also look to provide the highest
quality customer experience, which often serves as repeat business and advertising. In general, businesses in the hot air
balloon industry target couples and families looking to adventure scenic views from a new perspective. Indirectly,
businesses in this industry compete with any other tour operating services. This includes ground, aerial, and nautical
tours. With relatively low barriers to entry, it is fairly easy for companies to open up a business. In order to be
successful, businesses need to be able to identify where their competition stands in the market and create opportunities
to differentiate themselves.
Competition in this region is relatively low given the substantial amount of tourists. Direct competition consists of
three different hot air balloon operators in this area; Smoky Mountain Balloon Adventures, What’s Up Ballooning
LLC, and Tennessee Balloon Rides (What’s Up Ballooning, P. Holland, Smoky Mountain Balloon Adventures,
Tennessee Balloon Rides, personal communication, March 20, 2015). What’s Up Ballooning chose their location in
New Market, Tennessee after the owner inherited the company from family relatives. On the other hand, Tennessee
Balloon Rides chose their location in Sevierville, Tennessee due to convenience of launch sites. These companies offer
a basic balloon experience for passengers looking to enjoy the scenic views of the Smoky Mountains. The Smoky
Mountain Balloon Adventures outmaneuvers competition by offering lodging packages on top of their hot air balloon
tour. Indirect competition includes any service provided by the National Park that tourists are considering to
participate in. Figure 2.2 displays the indirect competitors in the area.
Mountain High Balloons
Competition in the hot air balloon sector is very consistent across the United States. Through analysis of popular
regions throughout the country, it can be determined that most areas have three to five operating hot air balloon
businesses. Competition comes from direct and indirect forces. In the Great Smoky Mountains, there are currently
three operating hot air balloon companies (What’s Up Ballooning, P. Holland, Smoky Mountain Balloon Adventures,
Tennessee Balloon Rides, personal communication, March 20, 2015).
Overview
Direct vs. Indirect Competition
Gatlinburg, Tennessee
9. Market
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The current needs of today’s customers in the Great Smoky Mountains include a plethora of activities as there is an
unlimited amount of activities to choose from. Activities that customers can choose from range from cycling, camping,
hiking, fishing, horseback riding and even a historic building tour. Frequent visiting customers, especially locals and
out of towners that visit the Smokies often, are always looking for a new and cool experience to partake in. Birthdays,
anniversaries, weddings, and family reunions are some of the huge factors that allow attractions such as Mountain
High Balloons to thrive. A new National Park Service report shows that 9.4 million visitors to The Great Smoky
Mountains National Park in 2013 spent around $734 million in communities near the park (Knoxville Daily Sun,
2014). In order to keep up with today’s customers, Mountain High Balloons will offer a safe and sound experience.
Professional photographers will be available so couples, families, and parties of all kinds can have their experience
remembered through pictures. Also, we will offer a courtesy champagne toast after the ride at no cost to the customer
at all. Our ticket price will also be equal to the lowest local competitor.
Current needs of today’s customers in the Smoky Mountains include new experiences, safety, and affordable
attractions. Hot air balloon rides are a new experience for almost everyone, and with that uncertainty comes safety
concerns for customers. With our experienced pilots, we offer 100 percent safety for all of our customers and only
take our customers up in the safest weather conditions. Our ticket prices are also equal to the lowest local competitor,
priced at a reasonable and affordable rate that allows a couple or family to have a once in a lifetime memory at an
affordable price.
Figure 2.3 Customer’s Needs
Local Market Analysis
Development
10. Business Concept
The business concept is a hot air balloon company in
Gatlinburg, Tennessee that offers a scenic, aerial
view of the Great Smoky Mountains from the heart
of Gatlinburg. Opening a hot air balloon business
would be opportunistic because of the substantial
amount of tourists and minimal amount of
competition in this area. Mountain High Balloons
will specialize in hot air balloon tours that offer a
valuable, scenic experience which is accompanied
with action photography and a complementary post-
flight champagne toast. Our target market focuses
primarily on tourists, therefore seasonality plays a
major role in the operations and overall success of
the business. Photos from the tour will be available
for purchase once the customers return to our office.
Figure 3.1 shows how Mountain High Balloons will
be positioned in the market, compared to their
competitors in the tourism industry in this geographic
location. Figure 3.1 is also shown in further detail in
Appendix F.
Mountain High Balloons positioning statement is “to adventure-seeking, above average income families and couples,
Mountain High Balloons is the only hot air balloon tour that is located in the heart of Gatlinburg, right next to the Great
Smoky Mountains.” The business model is based on selling a valuable and unique experience complimented with
quality service. Based on this focus, Mountain High Balloons will target above average income families and couples
that are looking for a unique getaway. However, our model does not specifically target demographically categorized
individuals; psychographic factors play into our target market as well. Copeland Associates believe that families will
be attracted to our business because children will see our advertising and want to participate in a thrill seeking activity
such as flying in a hot air balloon. Couples, on the other hand, will be attracted to our business because they can enjoy
scenery from a romantic and relaxing perspective. In addition, an average of 9.4 million tourists visit the Great Smoky
Mountains annually based off of statistics from the past ten years (NPS Stats, 2015). Copeland Associates believes this
is the most effective target market with the economy rising because families and couples with above average household
incomes will be urged to spend their increased disposable income towards valuable time with their loved ones.
Figure 3.1: Perceptual Graph
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Overview
Target Market
11. Business Concept
Mountain High Balloons will be located in Gatlinburg, Tennessee serving the many visitors of the Great Smoky
Mountains. This is the only hot air balloon company located in Gatlinburg, giving the tourists easy access to the
business. As shown in Figure 3.2, it will be located in Riverbend Mall unit 203 at 511 Parkway, Gatlinburg, Tennessee
37738. The mall is located on the busy strip of Gatlinburg. The company is located near this national state park because
of the number of visits the park receives each year. The Great Smoky Mountains was ranked the top visited national
state park in the U.S. in 2014 and has received an average of 9.4 million visitors over the last ten years. (National Park
Service, 2014). By locating the company near such a popular park, Mountain High Balloons has the potential to receive
business from the parks heavy traffic.
The company will have three launch sites.
The particular site that the launch will occur
at will depend on the weather and direction
of the wind. Since two balloons will be
launching at the same time, one balloon
will delay by an hour if only one launch site
is considered safe. The landing location of
the hot air balloon also depends on the flow
of the wind and the overall flow of the
flight. These landing locations are
previously estimated but are not certain.
The chasers responsible for tracking the
flights are also responsible for asking
permission to land on private property
before landing if necessary.
(Prime Mountain Properties, 2015)
Figure 3.2: Store Location
Customers wanting to enjoy such of an experience will schedule a flight with our company by communicating with our
employees over the phone or by visiting our location in the Riverbend Mall. When the appointment time arrives, the
customers will visit our location at Riverbend Mall and a company van will transport them to one of the launch sites.
At the launch site, an FAA licensed hot air balloon pilot will discuss with the customers rules and precautions while in
the air. During the hot air balloon ride, the pilot will discuss the history of the Great Smoky Mountains and a
professional photographer will be available to capture the entire flight. A chaser will be tracking the hot air balloon on
ground and keeping in contact with the pilot in order to locate the landing of the balloon. Once the flight is over, the
customers will be transported back to the store in Riverbend Mall. Once returning, the customers are given an
opportunity to view photos on a television taken by our photographer while on board and a complimentary champagne
toast. Customers will also be able to view their photos on Mountain High Balloons website and Facebook page. The
customer will be offered several different packages of photos to order at reasonable rates.
6
LocationLocation
Services
12. Business Concept
Mountain High Balloons offers low prices for all group sizes.
Figure 3.3 shows the comparison of prices with competition.
All parties must pay $250 per person. A $50 deposit, which is
part of the $250, is required when a confirmed appointment is
made and is available for a refund until 48 hours before the
scheduled appointment. Mountain High Balloons also
requires a 48 hour notice for a cancellation of an appointment.
When wind or bad weather does not allow us to ride for the
day, a 100 percent refund is given, while the customer also
has the option of scheduling for a new day where we have an
opening.
Figure 3.3: Competitor Pricing
The necessities to startup a hot air balloon company are fairly simple. First and foremost, the three different parts of a
hot air balloon must be purchased. Another piece of equipment that needs to be purchased is a transportation vehicle to
transfer customers to and from launch sites. Along with transporting customers, the van will be used to haul balloon
equipment.
As seen in Figure 3.4, there are three parts that make up a hot air
balloon; the basket (also known as the gondola), envelope, and
burner system (Plano, 2015). The basket is what the customers,
pilot, and photographer will ride in while in the air. The burner
provides the fuel for the balloon to take flight and operates as the
controls for the pilot. The envelope is the actual balloon itself
which is supported by the gores to ensure safety and lengthen the
life of the balloon. Mountain High Balloons will invest in two sets
of balloon equipment for startup and look to buy more with our
profits. One basket will hold six customers while the other one will
hold four.
Figure 3.4: Balloon Components
(Pitsco, 2015)
In order to be better positioned as a high quality company, Mountain High Balloons will provide transportation
services to and from the launch sites. This will be done through two company vans which will also be used to transport
the balloon equipment. Investment in the vans is a relatively low startup cost that can serve as a strong differentiating
factor for the company.
(What’s Up Ballooning, P. Holland, Smoky Mountain Balloon
Adventures, personal communication, March 20, 2015)
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Pricing
Equipment
Balloon Equipment
Transportation Equipment
13. Mountain High Balloons will have two FAA (Federal Aviation Administration) certified pilots. This certification states
that the pilots have completed at least 35 hours of flight time in a balloon, solo flights, and various amounts of different
flights at different altitudes (GPO, 2015). Certified pilots will have received advanced training that is supervised by an
authorized instructor and have passed several flight tests. Mountain High Balloons will require pilots to have a
minimum of 100 hours of experience to guarantee the safety of the passengers.
The balloon chase crew will be the backbone of the company. They will be responsible for assisting the pilot with all
aspects of ballooning. Duties include preparation, set up, the chase, and pack up. The balloon chase crew is key to a
successful flight. Crews will be expected to be 18 years of age or older and have a clean Tennessee driver’s license and
record to ensure the safety of others. We will have four chase crew members; two for each flight. Further detail of our
employee payroll can be seen in Appendix K. As seen in Figure 3.5, our total employee payout will be $212,976.00.
Our weeks in operation will total 40 hours, while our benefits for pilots are 11 percent, 7 percent for our chase crew
members, and 5 percent for our store cashiers.
Business Concept
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Figure 3.5: Employee Payouts
Figure 3.6 shows our total equipment and technology costs
to start up our business. Our two balloons equal out to a
total of $81,500. Our two chase vans, which are $9,800 per
van, equals out to a total of $19,600. The rest of our costs
are very small as the two balloons and two vans total out to
97.3 percent of our total technology and equipment costs.
However, every two years, Mountain High Balloons will
have to purchase new envelopes for the balloons as most
envelopes only last for around 700 flying hours.
Figure 3.6: Equip & Tech Costs
Employees
Equipment and Technology Costs
14. Demand Scenario #1 Comparison
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Copeland Associates calculated demand scenario one by comparing Mountain High Balloons to two similar companies
in the area. The two hot air balloon companies are Tennessee Balloon Rides and What’s Up Ballooning. Tennessee
Balloon Rides is located in Sevierville, Tennessee and operates with two hot air balloons that carry two passengers per
balloon. What’s Up Ballooning is located in New Market, Tennessee and operates with two balloons that carry four
and six passengers. The two companies are comparable to Mountain High Balloons because of the hot air balloon
services they provide near the Great Smoky Mountains, the additional services they provide , and their pricing. For
both competitors, Copeland Associates used the maximum capacity of the balloons, number of trips per day, number of
operating days and average price per flight to calculate each companies customers per year and annual sales. With this
information, we were able to estimate Mountain High Balloons number of operating days, customers per day, and
annual sales.
Part of our business plan is to operate daily at maximum capacity to maximize revenue. Considering the fact that
seasonality and weather in our geographic location limits hot air balloon activity to operate only about five and a half
months, we plan to book our flights in advance to ensure operation at full capacity. These two benchmark companies
told us that they operate 150 and 140 days per year, however when we talked to Tom Steinbock, he said they were
playing it very safe and we could actually operate more days than that and assumed we could increase ours to 160 days
per year. (J. Steinbock, What’s Up Ballooning, Tennessee Balloon Rides, personal communication, 2 April 2015)
Copeland Associates used primary data to derive the maximum capacity for each company per day. With that statistic
we used a process of equations to come up with flights per day, customers per day, customers per year and annual
sales. First, Copeland Associates multiplied the maximum carrying capacity per day for each company by two flights
per day, once in the morning and once in the evening, and got the number of customers per day. Next, we multiplied
the number of customers per day by the number of days each company operates in a year and that total gave us the total
number of customers each company receives per year. Once we generated the number of customers per year we
multiplied it by the price each company charged per person for a flight which gave us the annual revenue for each
company. Mountain High Balloons is projected to gross $800,000 per year before advertising and before deducting tax
and interest. With that being said, Mountain High Balloons will be more profitable than its competitors making us a
feasible company in the hot air balloon industry as shown in Figure 4.1.
Figure 4.1 Comparable Markets
Overview
Development
15. Demand Scenario #2 Industry
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Determining the number of Great Smoky Mountain
tourists that are willing to take hot air balloon rides is an
important factor in calculating our customer demand.
With millions of tourists visiting the national park each
year, Mountain High Balloons has a great opportunity to
gain many customers. In demand scenario two, Copeland
Associates calculated the percentage of Great Smoky
Mountain tourists who would take a hot air balloon ride.
Copeland Associates plans on servicing 45 percent of
these customers. With this information, Copeland
Associates were able to determine the amount of
customers per day and our daily sales.
Step One:
200,000/318,900,000 = .0627%
Step Two:
.0627% x 10,099,276 = 6,332.25
Step Three:
6332.25 x .45 = 2,850
Step Four:
2,849.51/160 = 17.81
Step Five:
17.81 x 250 = 4,453
We began by looking at the total number of U.S. hot air
balloon riders per year, 200,000 which was given by Hot
Air Marketing LLC (Brian Hoyle, personal
communication, April 1, 2015). This number was divided
by the total U.S. population in 2014, 318,900,000
(Census, 2015). This gave us the percentage of U.S. hot
air balloon riders, .0627 percent.
Next, we took the percentage of U.S. hot air balloon
riders, .0627 percent, and multiplied it by the total
number of tourists to visit the Great Smoky Mountains in
2014, 10,099,276 (National Park Service, 2015). This
resulted in the total number of people who go on hot air
balloon rides in the Great Smoky Mountains, 6332.25.
We then took the total number of people who go on a
hot air balloon rides in the Great Smoky Mountains,
6332.25, and multiplied it by the percentage of the
market share that Mountain High Balloons wants to
capture, 45 percent. We were able to obtain this value
based on the local competitions annual sales, as shown
in first demand scenario. What’s Up Ballooning
captures 37 percent of the market share in the area
while Tennessee Balloon Rides only receives 18
percent, combining for 55 percent. The third company
in the area is currently going out of business, leaving
Mountain High Balloons with the opportunity to
capture 45 percent of the market share. After
multiplying these numbers, we were able to come up
with a total of 2,850 customers per year.
We were then able to take our total customers per year,
2,849.51, and divide it by the total number of days
Mountain High Balloons would operate in a year, 160.
This gave us a value of 17.81 customers per day.
Lastly, we took the number of customers per day,
17.81, and multiplied it by the cost of a ticket to fly
per person, $250. This gave us a total value for sales
per day of 4,453.
Overview
Explanation
16. Demand Scenario Matrix
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Figure 4.2: Demand Scoring Matrix
In order to accurately predict an estimate of customers per day, Copeland Associates weighted each of our demand
scenarios. The weights reflect each demand scenarios importance with the first scenario weighted at 60 percent and the
second scenario weighted at 40 percent. Copeland Associates believe that our first demand scenario based on local
benchmark comparisons should be weighted the highest because it compares local businesses that service the same
area and target markets. In that scenario we found statistics such as customers per day and customers per year based
on each company’s maximum carrying capacity. Customers per year and customers per day especially help us to
clarify our demand in the market. These companies have similar business concepts and demographics to Mountain
High Balloons, therefore we can assume that our business will be somewhat similar.
Reasoning
17. Integrated Marketing Strategy
Mountain High Balloons’ brand identity is demonstrated in Figure 5.1. Our brand identity includes the company’s
mission of providing quality hot air balloon rides to families and couples looking for an adventure. The model
demonstrates Mountain High Balloons relationship with its customers and its value proposition by providing
customers with functional and emotional benefits. More information on the brand identity can be found in Appendix G.
Figure 5.1 Brand
Pyramid Model
Mountain High Balloons plans to fulfill its business objective of
providing quality hot air balloon services with the use of a
marketing plan. As shown in Figure 5.2, the plan consists of a
situation analysis, identification of opportunities, and
implementing the marketing mix. Mountain High Balloons
location provides a strength to the company because of its close
proximity to the Great Smoky Mountains and the high demand the
national park receives every year. An important weakness of the
company is its dependence on weather conditions. The company
segments the market by geographics and customer lifestyles by
targeting adventurous tourists of the Great Smoky Mountains. The
company is also positioned in the market as the only hot air
balloon company that is located in the heart of Gatlinburg.
Mountain High Balloons will promote its services with the use of
social media, billboards, brochures, and the Internet. More
information on the marketing plan can be found in Appendix J.
Figure 5.2 Marketing Plan
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Brand Identity
Marketing Plan
18. Copeland Associates highly suggests using Facebook and Twitter, the two most popular social media sites in the world,
to market Mountain High Balloons. Social media is an ever growing industry and the perfect place for any business to
market their company, as well as connect and interact with customers, fans, and people who are looking at what a
business is all about. The Smoky Mountains is a huge tourist attraction, so utilizing these sites will allow us to connect
with fans from all over the country, especially targeting the one time customers and hopefully getting them to come
back for another trip. Facebook will allow Mountain High Balloons to respond to customer feedback, interact with
fans, and promote giveaways and coupons.
Mountain High Balloons will use Facebook as its main social media platform in order to deliver and reach out to the
customer base. Facebook will allow us to reach customers around the Smoky Mountain region as well as people all
over the country looking to make a trip to the Smoky Mountains. Mountain High Balloons already has a Facebook
page created located in Appendix I. Here, customers can like our page, interact with employees, and see all of the
beautiful pictures and jaw dropping scenery provided by the company. Facebook also allows us to access our older
customer base, which is great for our target market of couples as well as anniversaries and family reunions.
Along with Facebook, Mountain High Balloons will also incorporate Twitter into its marketing and advertising plan.
This will be key for Mountain High Balloons to communicate with their customers, as a lot of Twitter users are on their
mobile devices, making it easy to reach out to customers all over the nation. Mountain High Balloons Twitter handle
(@MtnHighBalloons) will be placed on billboards, posters, and at lodging cabins. Through this strategy we will be
able to reach out quickly to customers who are only in the area for a short period of time. Also, Mountain High
Balloons can gain followers by having followers “retweet” sales promotion deals that allow people to have a chance to
get a discount on their ride.
Integrated Marketing Strategy
Figure 5.3: Facebook User’s Age Figure 5.4: Twitter User’s Age
(Sakki, 2013)
13
Social Media
19. For booking and more information about
Mountain High Balloons, customers will be able
to visit the company’s website at http:
//mountainhighballoons.zohosites.com. This
website will include links to the Facebook page,
hours and location, as well as dates available
and contact information.
Another interesting feature of Mountain High
Balloon’s website will be the ability to view
photos from a particular day’s flight. This will
be extremely convenient to the customers who
fly over the mountains and the strip of
Gatlinburg. In addition, it will help Mountain
High Balloons market to more consumers and,
in the long run, build brand familiarity.
Various methods of advertising will be used for the promotion of the company. Mountain High Balloons will have two
billboards located on I-75 and near Dollywood amusement park. There will be business flyers awaiting customers’
attention at the ticket booths at the entrance into Dollywood amusement park as well as inside the lobbies of local
hotels and lodges. The company vans will be decorated with vehicle wraps in which they will show the company’s
logo, slogan, location, and phone number. As the vans are transporting people to and from the launch site and tracking
the balloon, potential customers will have the ability to obtain information about this service. These vehicle wraps will
be purchased for a total of $400 (Van wraps, n.d.).
Mountain High Balloons will purchase a 30-word link listing located on Gatlinburg.com. This includes a link to our
company’s website, a thumbnail image, and a detail page with more information about our business. This will cost
$195 annually (Gatlinburg, n.d.). Mountain High Balloons will also advertise with the use of brochures.
Figure 5.5: Mountain High Balloon’s Website
14
After retrieving primary research by a phone call, Copeland Associates was informed that many hot air balloon
businesses advertise for other companies by velcroing the company’s logo onto the envelope for viewers to see from
the ground. Companies such as Remax, for example, pay a lot for aerial advertising. Therefore, we assume that we
will partner up with a Pigeon Forge local company and we will advertise their logo on our balloon in return for an
assumed average of $50,000 per year. Some companies that we researched that have advertised on hot air balloons
before were companies such as: Dollywood Amusement Park, Coca-Cola, Remax, Burger King/Taco Bell, Moose
Hollow Lodge, and Cabin Fever Vacations. This strategy will allow us to obtain more revenue and build relationships
with local companies. (T. Steinbock, Moose Hollow Lodge, Cabin Fever Vacations, personal communication, April
2015)
Integrated Marketing Strategy
Aerial Advertising
Website
Advertising Methods
20. Located in Riverbend Mall in Gatlinburg,
Tennessee, it is a very easy location for tourists
to travel to. Customers will be able to pay for
their tour as well as order pictures from the
check-out desk in the store. There will be a
HDTV mounted on the wall to display photos
from the customers flight. Photos will be
printed in seconds at the check-out counter
from the in-store printer. The shelves will be
stocked with photos from past flights and hot
air balloon memorabilia. A storage room is
also located at the back of the store for proper
storage of balloon equipment. Refer to Figure
5.6 for our store layout. Pictures of our actual
store are located in Appendix H with a blown
up version of Figure 5.6.
Figure 5.6: Floor Plan
15
Integrated Marketing Strategy
Product
Mountain High Balloons will offer hot air balloon rides in Gatlinburg Tennessee to couples, families, and individuals
looking for an adventure. The service includes a tour of the Great Smoky Mountains, a photography service, and a
complimentary champagne toast.
Price
Pricing for hot air balloons rides are $250 per person. After researching the nature of competition, Mountain High
Balloons will be priced similar to surrounding direct competition. Because of the quality of our hot air balloon rides
and the amount of demand this activity receives per year, Mountain High Balloons services can be considered high
priced. Typically, our hot air balloon flights are geared towards families and individuals who generate above average
income.
Place
Our company will be located on the busy strip of Gatlinburg, Tennessee at 511 Parkway. This is the best location for
our company because of the popularity of the area and its proximity to the Great Smoky Mountains. The popularity of
the area will with the demand of customers and its proximity to the Great Smoky Mountains will help the company
gain a competitive advantage over its direct competition.
Promotion
Mountain High Balloons will be promoted via internet and through traditional advertising methods. The company has
its own website in which customers can learn about the company and schedule an appointment. We will be advertised
on websites such as tripadvisor and Gatlinburg.com, a popular tourism website for the city and on social networks like
Facebook. The company will be involved in a partnership with a local company for advertising purposes. We will
advertise for the company by having their logo on one of our balloons in exchange for $50,000 per year. Other ways
that our company will advertise is with the use of two billboards on I-75 and near Dollywood amusement park. The
company will also have brochures located in Dollywood and hotels.
Marketing Mix
Store Design
21. MotionX-GPS systems that are focused on tracking routes
Vend, a cloud-based point-of-sales system and Software as
a Service provider (Saas)
Intuit Quickbooks add-on
Photo printer
iPad
Mountain High Balloons will implement the latest technology needs in order to have a successful and efficient
business. In order to have a successful business, Mountain High Balloons needs our information systems to run very
smoothly in order to maintain an organized business, while also making it very easy for our customers to comply with.
Types of technology include:
MotionX
The hot air balloons will be equipped with MotionX-GPS systems that
are focused on tracking routes. Its different features enable the tracking
of fuel usage during the flight, the altitude of the balloon, and the
distance traveled on the flight (MotionX, 2009). Track statistics are
posted directly to Facebook to share with friends and allows them to
view the trip in Google Earth. It is important to track the balloon so the
chase crew can guarantee a safe landing. MotionX GPS works by
locating at least three satellites in order to give accurate position
information while in the air. Direction and track maps are integrated
with the 3GS compass so you can orient the map to direction of travel.
Topographic maps and coordinate grids are available for navigation and
tracks are able to be made and saved. The chase crew is also able to
navigate the balloon and track keep track of it during the flight.
Vendhq
Mountain High Balloons is a smaller, startup business that does not
require highly advanced information systems. We chose to
implement a cloud-based POS system from Vendhq. By purchasing
a hardware bundle package for $450, we get a variety of plans to
choose from. The ‘extra small’ plan is perfect for our business
because it is free and supports up to 1,000 customers per month. If
our business grows, we have the option of paying for a larger plan
based on the amount of customers if needed. Vendhq is compatible
with PayPal and allows for an easy in-store payment process, as
shown in figure 6.2. Mobile payments are accepted online through
PayPal, or in-store by using the PayPal Here card reader for iPads.
We will create custom buttons to accept our methods of payment.
These payments include cash, traveler's checks, and credit cards. Our
services will offer a 48-hour cancellation fee.
Figure 6.1: GPS System
(MotionX, 2009)
Information Systems Strategy
16
(Sleeter Report, 2014)
Figure 6.2: Payment Method
Overview
22. Intuit Quickbooks
Product add-ons will be purchased, such as Intuit Quickbooks Payroll. It is simple, easy to use, and affordable. For
only $20 per month, Intuit Quickbooks Payroll connects with the Vendhq app and allows businesses to create
paychecks, keep track of employee hours, receive email reminders for tax and filing payments, pay federal payment
taxes electronically, and prepare completed W-2 forms (Intuit, n.d.). In order for MHB to be successful, it is necessary
to have an efficient inventory management. Vendhq allows you to add, remove, and edit inventory items. Stock and
sales information are automatically synched and keeps the business up-to-date.
Information Systems Strategy (Cont’d)
17
Mountain High Balloons store will use Vend, a cloud-based point-of-sale platform, which is compatible with an iPad.
This SaaS app is convenient for our business because it is online pos software that runs in a web browser and works on
any computer or mobile device with the free app. Vend works online and offline even if Internet connection is lost. The
data will automatically synchronise the next time there is Internet connection (Vendhq, n.d.). A compatible hardware
bundle will be purchased that includes a cash drawer, receipt printer, and a barcode scanner for only $450, as seen in
Figure 6.3.
Figure 6.3: POS System Hardware
(Vendhq, n.d.)
To make a reservation, customers must call us at 382-525-8787. When booking a flight, customers will be asked a
series of questions in order to effectively accommodate them. The first question will be the specific say you would like
to fly. We recommend that tourists schedule early during their time in the area. That way, in case of bad weather, we
can possibly reschedule for another day. The next question will be the number of people in your party. This will allow
us to decide which balloon will be perfect for your tour.
Overview
Reservations
23. Financial Analysis
18
Copeland Associates has calculated that $200,300 will
be needed to startup Mountain High Balloons. As
shown in Figure 7.1, the majority of these costs come
from equipment and technology, which accounts for
$103,900. The rest of these startup costs come from
the land for the launch sites and the office building.
For startup, 30 percent of Mountain High Balloons
total assets will be debt, while the other 70 percent
represents are equity. 40 percent of the company’s net
income will be distributed to owners, while the other
60 percent will be invested into cash, prepaid
insurance, and equipment. The hot air balloon
industry is very expensive when it comes to insurance,
which allows Mountain High Balloons to invest a
large sum each year into prepaid insurance.
Through the demand scenarios, Copeland Associates
calculated that the firm must average 19.12 customers per
day. For year one, Mountain High Balloons will average
18 customers per day, a number that will increase two
percent in following years. This will allow demand to be
reached by year five. On average, the company will look to
take balloons up in the air about 160 days out of the year
which was derived from talking to local competitors. All
customers will pay the same consistent rate of $250 to go
on the balloon, along with any photo packages they wish to
purchase. Although many different photo packages will be
offered, the average price of these packages is $25. As
shown in Figure 7.2, Copeland Associates has projected
revenue streams ranging from $791,600 to $852,576
during the first five years of operation.
Copeland Associates subtracted depreciation and amortization from the initial value in order to come up with EBIT
value. The total depreciation value was determined by finding the depreciation of the balloons based off of the straight
line method plus the depreciation of the vehicles based off of the five year MACRS schedule. Next, the tax rate of
35.96 percent was taken into account before adding depreciation and amortization back to determine the operating
cash flows for the five different years. The changes in net working capital varied depending on the year which were
taken into account to come up with the total free cash flow. For more information on these calculations, refer to
Appendix K.
Figure 7.1: Startup Costs
(Firefly Balloons, n.d.) (NCR Silver, 2015) (Best
Buy, 2015) (Craigslist, 2015)
Figure 7.2: Yearly Revenue
Overview
24. Financial Analysis
19
Copeland Associates predicts that Mountain High Balloons will reach demand by year five. Although the first year
appears to generate a low net income of $68,418, these numbers will drastically increase the next four years. Due to
the business being heavily dependent on weather and safety, numbers will fluctuate depending on the conditions. The
number of operating days will also play a major role of the life of our balloons. The envelope of the balloon is
projected to withstand roughly 700 hours of air time which is about two years for our projected number of operating
days.
As discussed, year one’s net income is well below the
following four years. Year two has a net income of
$130,999 which increases about $10,000 each year after
that. Customers per day will increase two percent
annually due to an increasing number of tourists in the
Great Smoky Mountains each year. Free cash flows for
Mountain High Balloons range anywhere from $35,662
in year one to $144,939 in year three. The relevant for
cash flow for year five is $1,284,290 after adding back
in the enterprise value of $1,152,696. For more
information, refer to Appendix K.
Figure 7.4: Capital Budgeting Analysis
After calculating the relevant and free cash flows,
Copeland Associates was then able to find figures such as
net present value, internal rate of return, and payback
period. The net present value of Mountain High Balloons
is $587,733. The internal rate of return is fairly high at
62.70 percent. The payback period for the company is 2.65
years, which shows that the initial investment will be paid
off in a relatively quick timeframe.
Figure 7.3: Financials
To determine the Weighted Average Cost of Capital, Copeland Associates first divided the capital structure to 30
percent debt and 70 percent equity. The 30 percent of debt was multiplied by an 8 percent cost of capital and then
multiplied again by the after tax adjustment of 64.04 percent. This gave us a total of 1.54 percent for the debt’s
WACC. In order to determine the equity’s WACC, the 70 percent was multiplied by 22 percent cost of capital.
Copeland Associates decided to use 22 percent mostly due to the overall riskiness of investing in the company. When
these two values were multiplied together, the total WACC for equity was 15.40 percent. Lastly, the 1.54 percent was
added to the 15.40 percent, which resulted in a total WACC of 16.94 percent. For further information on these
calculations refer to Appendix K.
NPV = $587,733
IRR = 62.70%
Payback Period = 2.65 years
WACC = 16.94%
Explanation & Feasibility
25. 20
In the United States, the tourism industry accounted for $960 billion in revenue in 2014 (Statista, 2015). There are four
main categories related to the tourism industry: accommodation services; transportation; food services and dining
places; and recreation, entertainment, and shopping (IBISWorld, 2015). Copeland Associates has narrowed its focus on
tour operators, particularly in the hot air balloon sector. Based on the demand for customers and low competition,
Copeland Associates believes there is opportunity for success in this industry.
Copeland Associates has developed a business concept to operate a hot air balloon company in the Great Smoky
Mountains. Mountain High Balloons will be the only hot air balloon company located in Gatlinburg, Tennessee, giving
tourists easy access. It will be targeted at families and couples looking for a unique and scenic experience from a
breathtaking point of view. Along with taking customers on a tour thousands of feet in the air, Mountain High Balloons
will provide transportation and complementary services to support its high quality reputation. Top of the line
employees will provide customers with a safe and friendly experience, while also serving in the most professional
manner possible. Customers can enjoy this once in a lifetime experience equal to the lowest prices in the area.
Copeland Associates developed two demand scenarios based on comparable markets and the industry. Comparable
markets included Teton Valley and the Grand Canyon. This comparison played a major role in determining the number
of customers Mountain High Balloons will be able to reach. The industry comparison helped us determine the percent
of people willing to take a hot air balloon ride, which then helped calculate our customers per day and our sales per
day.
Lastly, Copeland Associates organized a financial analysis assessing the feasibility of opening up Mountain High
Balloons in the Great Smoky Mountains. This analysis consists of five year pro forma statements and a capital
budgeting analysis. The capital budgeting analysis calculated important statistics like net present value, internal rate of
return, and payback period. After completing this analysis, Copeland Associates was able to determine that Mountain
High Balloons is a feasible company to open.
Conclusion
Summary
26. Best Buy (2015). Retrieved from http://www.bestbuy.com/
Checkfront (2015). FAQ. Retrieved from https://www.checkfront.com/faq
Craigslist. (2015). Retrieved from:
http://athensohio.craigslist.org/search/sss?sort=rel&minAsk=9800&maxAsk=9800&query=van
Dollywood (2015). Welcome. Retrieved from http://www.dollywood.com
Firefly Balloons (n.d.). Specifications and Pricing. Retrieved from
http://www.fireflyballoons.net/build/BLLNFF8.html
Gatlinburg (n.d.). Internet Programs. Retrieved from http://www.gatlinburg.com/internetprograms.aspx
Gil, Paul (n.d.). What Is SaaS. Retrieved from
http://netforbeginners.about.com/od/s/f/what_is_SaaS_software_as_a_service.htm
Google Maps (2015). Gatlinburg, Tn. Retrieved from
https://www.google.com/maps/place/Gatlinburg,+TN/@35.7272501,-83.4980164,13z/da
a=!3m1!4b1!4m2!3m1!1s0x885953eacb08a589:0x4ab1d7ae7eb779a8
GPO (2015 March 18). Electronic Code of Federal Regulations. Retrieved from
http://www.ecfr.gov/cgibin/textidx?c=ecfr&sid=40760189a03dfea0b501608f33820a45&
gn=div5&view=text&node=14:2.0.1.1.2&idno=14#se14.2.61_1123
IBIS World (2015). Tourism in the US. Retrieved from
http://clients1.ibisworld.com/reports/us/industry/currentperformance.aspx?entid=2002#CP
Intuit (n.d.). Simple Affordable Payroll Solution. Retrieved from
http://payroll.intuit.com/payroll-services/basic-payroll/
K. Morgan, Personal Communication, March 18, 2015.
Kirtland Federal Credit Union (2015 April 1). Consumer Loan and Credit Card Rates. Retrieved from:
https://www.kirtlandfcu.org/images/uploads/content/loan_rates.pdf
Knoxville Daily Sun (2014 July 19). Great Smoky Mountains National Park tourism creates $734
million in economic benefit to area communities. Retrieved from
http://www.knoxvilledailysun.com/news/2014/july/gsmnp-generates-revenue.html#.VQ8
DdLF-o0
Kroeck, Louis (2012). How Much Does it Cost to Trademark a Business Name? Retrieved from
http://smallbusiness.chron.com/much-cost-trademark-business-name-57181.html
References
21
27. MotionX (2009 August 24). Hot Air Ballooning with MotionX-GPS. Retrieved from
http://gps.motionx.com/live/
National Park Service (2015). Visitor Use Statistics – Park Reports – Great Smoky Mountains.
Retrieved from
https://irma.nps.gov/Stats/SSRSReports/Park%20Specific%20Reports/Annual%20Park%2
0Recreation%20Visitation%20Graph%20(1904%20-%20Last%20Calendar%20Year)?Park
=GRSM
National Park Service (2014).Ten Most Visited Parks. National Parks Conservation Association.
Retrieved from http://www.npca.org/exploring-our-parks/visitation.html
NCR Silver (2015). Service Providers. Retrieved from
http://www.ncrsilver.com/welcome/ipad-pos-service-businesses.html
PasadenaVilla (2015). Smoky Mountain Lodge. Retrieved from
http://pasadenavilla.com/programs-locations/smoky-mountain-lodge/ Pitsco (n.d.). Hot Air Balloon System.
Retrieved from:http://www.pitsco.com/content/?art=20&ap=4
Plano Balloon Festival (n.d.). Anatomy of a Hot Air Balloon. Retrieved from
www.planoballoonfest.org/pilots-balloons/anatomy-of-a-hot-air-balloon
Prime Mountain Properties (2015). Sevierville, Wears Valley, Pigeon Forge, Seymour, Kodak,
Douglas Lake and Gatlinburg Tennessee real estate. Retrieved from
http://www.seviervillehomes.idxco.com/idx/14951/details.php?idxID=174&listingID=194170
Sakki, Elsa (2013). A 2013 Social Media Report. Retrieved from
http://optimiseblog.co.uk/a-2013-social-media-report/
Smoky Mtn Balloons (n.d). Flight Information and Pricing. Retrieved from
http://www.smokymtnballoons.com
Soehn, Dana (2015 January 9). Over Ten Million visited Great Smoky Mountains National Park in
2014. Retrieved from http://www.nps.gov/grsm/learn/news/2014visitation.htm
Statista (2015 January 1). Revenue of tourism (NAICS NN002) in the United States from 2009 to
2014. Retrieved from http://www.statista.com/statistics/296161/revenue-tourism-in-the-us/
Sleeter Report (2014 May 14). Retrieved from http://www.sleeter.com/blog/2014/05/vend-pos-quickbooks-online/2/
References (Continued)
22
28. References (Continued)
23
Tennessee Balloon Rides (n.d.) Tennessee Balloon Rides. Retrieved from
http://www.tennesseeballoonrides.com/contact-us.php
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Vendhq (n.d.). POS System. Retrieved from http://www.vendhq.com/tour/pos-system
Whats Up Ballooning (n.d.). Smoky Mountain Balloon Rides with What’s Up Ballooning. Retrieved
from http://www.whatsupballooning.com/rates.html
Wind Exchange (2014 December 9). Utility-Scale Land-Based 80-Meter Wind Maps. Retrieved from
http://apps2.eere.energy.gov/wind/windexchange/wind_maps.asp
29. Competition in the Great Smoky Mountain region is relatively low, as there is only three other ballooning companies
that cover the vast region.
Customer bargaining power is relatively low as prices are basically fixed, with a slight discount when a higher amount
of people board the air balloon.
Threat of new entrants is medium to high as a lot of people do not look to join this market, however the start-up cost is
relatively low compared to other businesses.
Bargaining power of suppliers is medium to low as once the parts of the air balloon are purchased, then there are not
many other costs that are needed to be made.
Threat of substitutions is relatively high as customers can choose other tourist attractions to attend to besides Mountain
High Balloons, including hiking, zip lining, etc.
Appendix A : Porter’s Five Forces
Appendix A describes porter’s five forces of the hot air balloon industry in Tennessee near the Great Smoky
Mountains. The model is used to broadly touch on the competitive forces in the industry and demonstrate the industry’
s strengths and weaknesses.
24
Competition
Bargaining Power of Customers
Threat of New Entrants
Bargaining Power of Suppliers
Threat of Substitution
30. Appendix B: PEST Analysis
Appendix B describes the PEST analysis for the hot air balloon industry. This analysis is used to understand the
business environment of the industry and analyzes political, economical, social, and technological factors.
There are certain regulations for being able to balloon over the smoky mountains. Hot air balloons can only go around
the mountains and not over them directly. Employees also need to obtain aviation licenses and also have an air
operating certificate. Safety is also a huge issue when it comes to hot air balloon rides. Due to safety regulations,
females that are pregnant, handicapped citizens, and people who are under certain treatments are not suggested to board
a hot air balloon. Also, kids under the age of sixteen need to be accompanied by an adult.
Economic stability has a major effect on consumer leisure spending. Economic crisis can lead to people not willing to
spend money on such an attraction. A family’s disposable income is also a big factor in a family’s will to spend $500-
1000 for a ride on a hot air balloon. Special events such as anniversaries, birthdays, and honeymoons are a big money
maker in the tourism industry, and by targeting these certain people and giving them a great experience, they can pass
it on to their friends, family, and co-workers. All of this is helped out by the fact that the Smoky Mountains are one of
the highest visited national park the United States. In fact, In 2014, over 10 million visitors enjoyed the national park,
which was an 8% increase over 2013 (National Park Service, 2014).
A big factor in the social aspect of hot air balloon rides is negative publicity. Obviously, with any transportation and
sightseeing service there will always be certain things that go wrong. In fact, from 2000-2011, there have only been
five deaths in the United States, according to the National Transportation Safety Board database (NTSB, 2012).
To improve passengers experience on board, having a professional photographer on board to take photographs of the
customer’s experience can give the customer a memory that will last them forever. Also, new advertising concepts can
increase the number of customers, such as a new Facebook page, Twitter page, and putting out commercials throughout
the local market in the Smoky Mountains. GPS technology can also be used to track the location of the balloon during
the flight and when it is about to land, so the chase crew can easily locate the balloon.
25
Political
Economical
Social
Technological
31. Appendix C: Business Model Canvas
Appendix C describes the business model canvas used in the development of Mountain High Balloons. The canvas
demonstrates the company’s key partners, activities, customers, channels, relationships value propositions, cost
structure , and revenue streams.
26
32. Appendix D: Target Audience Blueprint
Appendix D describes the blueprint that was used to determine Mountain High Balloons’ target market. It demonstrates
the target market’s demographics, behavior, lifestyles and attitudes.
27
33. Appendix E: Concept Grid
Appendix E describes the tool used to develop Mountain High Balloons’ concept. The grid contains the name of the
company, the target market, the benefit customer’s receive from the company, and what services the company
provides.
28
34. Appendix F: Perceptual Graph
Appendix F describes the nature of direct and indirect competition and where Mountain High Balloons lay withing the
competition. It compares the companies by price and quality.
29
35. Appendix G: Brand Pyramid Model
Appendix G demonstrates the model used to create Mountain High Balloons’ brand identity. The model states what the
company has to offer to its customers, surrounding competition, the target market, and overall purpose of the company.
30
36. (Mark Hayes, email message to realtor, March 26, 2015.)
Appendix H: Store Design
Appendix H demonstrates our store design and what it will consist off. It shows the interior of the store and also a
floor plan of what customers will see when they visit our store.
31
Store Overview
37. Appendix I:Website & Social Media
Appendix I demonstrates a preview of our website for customers and our facebook page to
show real life experiences.
32
Social Media
38. Appendix J:The Marketing Plan
Step One: Business Mission and Objectives
The mission of Mountain High Balloon Company is to build brand loyalty by thrilling our customers with a valuable
scenic tour of the Great Smoky Mountains while providing intimate customer service.
Step Two: Situation Analysis - SWOT
Strengths: Strengths of the company include receiving the demand for the visitors of the Great Smoky Mountains and
its prime location. The Great Smoky Mountains receives an average of over nine million visitors per year and is
continuously ranked as the leader of most visited national state parks. By locating the company near such a popular
park, the company is forecasted to receive a high demand. Mountain High Balloons is also located directly in
Gatlinburg and only a few miles from the mountains themselves, which is a differentiating factor from our competitors.
Weaknesses: One weakness of the company is its dependency on the weather conditions. After speaking to several
balloon companies in the area, the biggest problem is dealing with Tennessee’s unpredictable, windy weather.
Opportunities: Along with Mountain High Balloons being located in the heart of Gatlinburg, opportunities arise with
our advertising agreements with several different companies. The agreements help the company gain more capital per
year and can overall increase the number of customers per year.
Threats: Threats for the company include weather conditions and economic health.
Step Three: Identify Opportunities
Segmentation: Mountain High Balloons segments the market geographically and by the lifestyles of customers. The
company is focused on tourism in the Gatlinburg, Tennessee area and is focused on consumers who are seeking
adventures and entertainment.
Targeting: The target market of Mountain High Balloons is families and couples who make above average income and
hold active lifestyles. The company also targets the tourists of the Great Smoky Mountains in Gatlinburg Tennessee.
The Great Smoky Mountains averages over nine million visitors per year. Copeland Associates choose this target
market because of their lifestyle of enjoying new adventures and entertainment.
Positioning: Mountain High Balloons is positioned in the market by the quality of our services, our location, and the
price of our services. The company provides customers with an aerial tour of the Great Smoky Mountains area. A
differentiating factor between the company and its competitors is the location. Mountain High Balloons prime location
is in the heart of Gatlinburg and within a few miles of the mountains while the competitors are located further from
Gatlinburg.
Step Four: Implement Marketing Mix
Product: The services Mountain High Balloons offers are hot air balloon rides which include a complimentary
champagne toast and photography. The company will also offer photo packages.
Price: Mountain High Balloons prices will be $250 a person. Copeland Associates decided to price our services similar
to direct competition in order to prevent a pricing war and to be able to cover costs.
Place: The Company will be located on the busy strip of Gatlinburg Tennessee on 511 Parkway and on the web at http:
//mountainhighballoons.zohosites.com. In store customers are able to speak with customer service representatives,
book a balloon flight, purchase t-shirts, and choose photos. The company’s website will entail the option to book a
flight, a overview of the company's purpose and services, and a link to our Facebook account to witness real life
experiences.
Promotion: Mountain High Balloons promoting strategy includes an online website, a Facebook account, radio
advertising, two billboards, a link on Gatlingburg.com for tourists, and brochures. The company vans will also have
vehicle wraps with our brand name and logo. The brochures will be located in area hotels and in tourist attraction
stores.
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45. Appendix L: Local Company Competition
Appendix L pinpoints the direct competition in our area and the proximity of each.
What’s Up Ballooning
Mountain High Balloons
Tennessee Balloon Rides
Smoky Mountain
Balloon Adventures
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Hot Air Balloon Locations
