Memorandum
To:Robin, Batmans Assistant
From:Maverick, Top Gun Pilot
Date:December 25, 2012
Re:Proposed Changes to Terrain Park feature acquisition
Purpose:
This Proposal presents an alternate, more cost effective, solution to the acquisition of terrain park equipment features. I recommend approaching various snowboarding companies and commissioning them to build terrain park features to replace the current old features in each of the three terrain parks.
Current Acquisition method
Currently, Cypress Mountain has an exclusive sponsorship deal with Bell Mobility who supplies all the current terrain park features. Considering Bell Mobility does not specialize in freestyle skiing they contribute a flat fee of $30,000 per year which gives them exclusive right of sponsorship for Cypress Mountain’s terrain park features. The annual Bell budget only goes to help pay wages for terrain park maintenance staff, as such, the features themselves are neglected, which leaves the entire park in a state of disrepair. The neglected terrain park reflects poorly on a mountain which advertises itself as Vancouver’s only big mountain experience. Big mountains such as Whistler Blackcomb hold their park in much higher regard and use it to help attract customers.
The estimated number of customers who frequently use the terrain park is 6% of our total customer base.The loss of 6% of customers to other mountains such as Whistler Blackcomb for their superior terrain parks is 600$ per seasons pass, which equates to a loss of $576,000 annually. This figure would be higher if we include the daily pass customers, which consist of 59% of all Cypress mountain guests. Cypress Mountain needs to consider alternative solutions for the acquisition of terrain park features and their maintenance.
Proposed Acquisition method
If we do not re-sign Bell’s exclusive sponsorship deal then we are free to acquire whatever sponsors we desire for the features. Local stores such as Comor Sports, Coastal Riders, and The Boardroom, and companies such as Dragon optics, Electric, and Signal Snowboards all build features free of cost for mountains so long as they are allowed to put their brand on it. These companies also service their features and replace them if they break down.
By commissioning local stores and companies to build our terrain park features we can have a new terrain park within a month. The new features are free of cost and no time is needed for terrain park staff is need fix or maintain the features.
Costs
The cost of implanting my proposal follows:
The loss of Bell mobility as exclusive sponsor30,000 per year
24 new terrain park featuresfree
Needed 30,000 per year from Cypress Mountain to pay staff wages30,000 per year
Total30,000 per year
Dropping bell as an exclusive sponsor would cost 30,000 per year towards terrain park staffing wages which will have to be provided by Cypress Mountain instead. The cost of wages goes towards having a brand new park with diverse sponsors and a probable 6% increase to tickets/ seasons pass sales.
Conclusion
By keeping Bell as an exclusive sponsor for another 15 year contract we are potentially giving up annual revenue of $576,000 in seasons pass sales. By dropping Bell, we can improve the reputation and overall quality of our park which will attract the missing 6%.
I look forward to meeting with you to discuss my proposal. Please email me at or call me at local 444 to arrange a time when we can meet and review this proposal.