Case Study: Duffer’s Cove

• This case revolves around the definition of a market segment and operational management that provides customer experiences required to satisfy the needs of this segment • Students should use a logic model or strategy map to better understand the linkages between outcomes (i.e., meeting customer expectations and thus increasing revenue growth) and key operational activities in the organization • Other techniques such as Quality Function Deployment could also be used to better articulate the specific linkages between customer experiences and operational management

Duffer’s Cove Golf Course Situated in a mid-size city Owned by the municipality as a means of ensuring that residents had access to reasonably priced golf City council has been considering privatizing the course

Duffer’s Cove Golf Course (cont’d) Previous GM (10 Years) approach was to build strong relationships within the city administration to secure resources when needed (such as additional funding, speedy decisions and so forth) very successful contacts at City Hall led directly to tournaments being held at Duffer’s Cove (a great way of introducing new golfers to the course) Current General Manager, Jim Kane joined Duffer’s Cove in January of 2006 concerned about privatization focused on cutting costs in an attempt to increase the year-end surplus financial surplus yearly = difficult case for privatization

Golf Industry
• industry in the country is steadily growing

• Recent studies indicate:
– there are almost 6 million golfers (participation rate of 21% of the population) - the highest of any country in the world – participation has grown at a rate of 16% over the past five years

• On a region-by-region basis:
– the region in which Duffer’s Cove is situated has the highest total number of golfers – another region has the highest participation rate by population at 29%

• “The key barrier to golfers taking up the sport was price....” • The key driver for participation growth is the expansion of the segment of the golfing market known as “core golfers.”

Golfer Segmentation
Core golfers • play > 8 rounds per year • usually understand how to play the game • enjoy courses offering variety and challenge

Occasional golfers • play 7 or fewer rounds per year • enjoy the game • not necessarily looking for an overly challenging course. • social aspect is often more important

Golfer Segmentation
• • • • • key barrier to taking up the sport is price Duffer’s Cove - low-cost alternative for occasional golfers Long course with all par 4 holes measuring over 400 yards from the white tees wide fairways, many sand traps on the course 2004 and 2005 golf course operation reports suggest savings could be realized through reductions in the amount of time spent on maintenance wide fairways along the course were being made even wider through regular trimming of the rough lining the fairway allowing the rough to grow naturally could save hundreds of hours of labour each season from a marketing perspective, he could sub-segment the market to cater to golfers who played approximately 8 to 15 rounds per year money saved on maintenance => promotional initiatives (an effective supplementary tool) word-of-mouth a key influencer of where golfers played

• • • •

Results - 2006
• 2005 season was very good • in 2006, the number of golfers was not keeping pace with 2005 Was a mistake made? The information provided by the golf pro, Jane French, seemed to confirm that the added challenge provided by the newly grown rough might be causing issues.

Duffer’s Cove Dimensions And Measures In The Data Set

Duffer’s Cove Dimensions And Measures In The Data Set

Discussion Points
Discussion 1 Define the critical outcome for Duffer’s Cove (DF). • Is revenue more important than profitability? • What trends are evident in revenue and profitability? • What source of revenue appears to be the most challenged? • How is DF maintaining profitability? • Does this approach augur well for their long term viability?

Discussion Points
Discussion 2 Discuss the targeted market segment. • How would you evaluate the target segment defined by the new General Manager? • What do trends in number of golfers suggest? • Are the current operational tactics aligned with the needs of the segment targeted?

Discussion Points
Discussion 3 Next steps • Given the conclusions drawn about expected outcomes and market segment, what should the GM do?

This case highlights: • linkages between the needs of a market segment and the types of experiences provided by a service organization • It also suggests that targeting one segment at the expense of others might put such an organization in jeopardy • Core concepts applied would include: – defining organizational outcomes (i.e., is revenue or profitability more important?), – the role of external stakeholders (i.e., expectations of politicians), and – buyer behaviour (i.e., the experience expected by core customers).