Innovating The Mix

In this exercise, I'd like you to practice the entrepreneurial competency of "value creation" by reverse engineering your firm's existing product/service mix, evaluating the features and benefits of the items sold by your firm, and analyzing it using the 4-levels of a product/service

Specifically, here's what I'd like you to do:

1) Map out a product/service mix for your venture. Identify all of the revenue drivers, and identify the items under each revenue driver. If there are many, many items in a revenue driver, then you are welcome to indicate only categories of items.

Firm's existing product/service mix is membership and operational revenue, the latter of which is composed of many many products (tennis, restaurants, golf, spa, salon, etc.) that are further broken into a product/service mix. I think the best to map out would be the Tennis department's product/service mix.

Tennis Department revenue drivers:

1. Tennis Membership, +$4,500 annual upcharge from basic membership for unlimited recreational play with other tennis members

2. Competitive team registration fee - interested players pay a $500 fee to join a team of their skill level and play home and away matches again neighboring clubs (team registration covers coach, county registration fee, home match hosting, etc.)

3. Private lessons - customers can pay the Tennis Professionals for 30-min, 1-hour or more 1:1 time to improve their tennis skills, scheduled at the customer's convenience and pro's availability

4. Retail products - clothes, equipment, bottled water, etc. sold in the Pro Shop; and stringing service is also available

5. Clinics (group lessons) - fee per person to join in a group lesson, pre-scheduled topics and date

6. Events - ticket sales for attendance at an event; events vary from spectator events to participation tournaments

7. Kids After School Tennis - cost for program participation, kids are divided by skill level to learn and practice tennis skills during after-school hours under Tennis Pro supervision

&

8. Kids School Break Camps - cost for program participation, kids are divided by skill level to learn and practice tennis skills during full or half-day on non-school days under Tennis Pro supervision

9. Guests - guest fee for bringing a guest, cost increases during peak times

2) On an item basis (or an item-category basis, if necessary), please identify the features and benefits.

• Tennis Membership - feature is cost-savings comparing annual buffet fee to per-usage fee; since non-tennis members are prohibited from using the tennis center the benefit of upgrading is your ability to play tennis with your friends and neighbors (it is an active tennis community so you are otherwise "left out")
• Competitive team registration fee - feature is competitive tennis play according to official rules with a coach assisting you; benefits are getting to know a small group of players very well (building friendships) and also being active by following through on commitment to tennis play/team
• Private lessons - feature is high-quality personalized teaching (former professional tennis players make up our teaching staff); benefit is improved tennis skills
• Retail products - feature is the item you needed (you bought water because you were thirsty, etc.); benefit is the convenience of getting what you need where you need it (in the pro shop along the tennis courts) and we have reduced prices (club is not-for-profit)
• Clinics (group lessons) - feature is affordable tennis lessons; benefit is improved tennis skills
• Events - feature is the pleasure of enjoying a tennis match as a spectator or participant; benefit is the convenience of these tennis events and programs at your home community and another benefit is getting to enjoy these things without planning it (or doing the dishes!)
• Kids After School Tennis - feature is keeping the kids occupied with a healthy sport until parents are off work and ready to be home with the kids; benefit is kids get tennis skills
• Kids School Break Camps - feature is keeping the kids occupied with a healthy sport until parents are off work and ready to be home with the kids; benefit is kids get tennis skills
• Guests - feature is that the member gets to bring a friend to play; benefit is having an expanded network of potential players to play tennis with/against

3) On an item basis (or an item-category basis, if necessary), please identify the major points of differentiation, relative to competitors' offerings. Please try to identify at least one point of differentiation on each level of the four levels (i.e., core, tangible, augmented, and communicated).

• Tennis Membership - (core) our community of tennis players is significantly younger than our competitors so members who join the Tennis Membership get a community of active tennis players; the other levels are not different
• Competitive team registration fee - (core) this matches the cost of our competitors' teams since we are participating in the same county league; however some clubs do internal leagues which are much less competitive; (actual product) we also have more team registered than other clubs so we can offer teams by skill level that are a much better fit to your skill level instead of a club with team teams that would have to move you to a better or worse skill level group just to put you on a team
• Private lessons - (core) matches the competitors; (actual product) our teaching professionals are of the highest quality, former professional players on the tour
• Retail products - (core) and (actual) are the same as competitors; (augmented) in many products we beat our competitors on price; our customers are also locked in to shopping at "their" club because they already paid to be a member here they want to support their club instead of a stand alone athletic store
• Clinics (group lessons) - (actual product) our teaching professionals are of the highest quality, former professional players on the tour
• Events - (core/augmented) events are exclusive to members only attendance; the core is only sold to a limited audience but the exclusivity is the augmentation; for the (actual product) we customize it to our members' wants/needs
• Kids After School Tennis - our community of tennis players includes many families so there is a large group of kids to build the program for (core) - driving down cost for participants - and other (actual product) differentiation, including increased offerings/availability, and creating specialized groups by skill level, improving quality of teaching; and our teaching professionals are of the highest quality, former professional players on the tour; the (augmentation) is parents getting a program to put their kids in
• Kids School Break Camps - our community of tennis players includes many families so there is a large group of kids to build the program for (core) - driving down cost for participants - and other (actual product) differentiation, including increased offerings/availability, and creating specialized groups by skill level, improving quality of teaching; and our teaching professionals are of the highest quality, former professional players on the tour; the (augmentation) is parents getting a program to put their kids in
• Guests - not differentiated from competitors on any level; the value for the guest depends on how much they really wanted to get in to try out our club!

4) After looking at your product/service analysis, please evaluate how innovative it is -- in other words, how new and useful is your firm's product service mix relative to competitors.

Our product/service mix is NOT new or useful when compared to competitors. Our tennis center has the same offerings of any full service tennis center. However, we have three of the four surface types, which is rare that a tennis club in this area has such variety for players: red clay, green clay and hard surface.

What is unique about our tennis center is that it is in your home, i.e. our customers live here so the center is customized to their interests. Location, location, location!

5) For each item (or item-category), what is one thing you can do to enhance further differentiation? Again, please apply the four-levels framework to develop your suggestions. 

• Tennis Membership - I think we could add the remaining surface type, which would be a grass court; it has a LOT of cost to create and maintain so further analysis would be necessary (actual product)
• Competitive team registration fee - no ideas here, the game is so structured and regulated
• Private lessons - it is difficult to simulate doubles play or to coach while playing singles, so some new product that offers coaching while playing would be an innovation
• Retail products - offering a first-chance buy for our customers to get new products and equipment on the market (augmentation)
• Clinics (group lessons) - (actual product) our teaching professionals are of the highest quality, former professional players on the tour
• Events - continue to customize events to the customers' wants (their core value)
• Kids After School Tennis - continue to customize events to the customers' wants (their core value)
• Kids School Break Camps - continue to customize events to the customers' wants (their core value) and add more kid-friendly features such as arcade hours, swimming pool, etc. (actual product)
• Guests - no ideas here either...