J. Milton & Assoc. - Laserfiche WebLink

Home Browse Search

, Market Penetration Rates Since attendance projections in this analysis are derived as the product of market population and market penetration rates, it is appropriate to discuss the concept of market penetration rate and how such rates are derived in this context. First, it is appropriate to provide a proper definition of market penetration rate, or "MPR". Market penetration rate can best be described by the equation MPR = PR x FY, where PR is participation rate and FY is the frequency of visit. Thus, if an attraction has an MPR of 50 percent, that rate might be derived by having a PR of 1.0 percent and a FY of 50, or a PR of 5.0 percent and an FY of 10. To ascertain what combination of factors is most appropriate, it is necessary to appreciate what factors impact PR and FY. These are discussed, in turn, below. With regard to PR, or participation rate, the dominant factor is breadth of market appeal. Aquariums have the .bTfeatest breadth of market appeal of any form of recreation in which the world participates. On the other hand, amusement parks, movie theaters and museums rank equal on most people's lists. Thus, on the basis of breadth of market appeal, aquarium would have a equal PR, compared to the other activities cited. The second factor impacting the market penetration rate, or MPR, is frequency of visit, or FY. There are two factors that impact FY. The first is the consumer's opportunity. The phenomenon known as . the "distance decay factor" implies that as distance from an attraction increases, MPR decreases. The reason for this is a lower frequency of visit brought about by decreased opportunity. For example, a person living 50 miles from an attraction has less opportunity to visit an attraction than another person living one mile away. Another reason for lack of opportunity is lack of time. This is particularly applicable to a tourist market: if a tourist's length of stay in an area is one night, a choice must be made among available options, whereas, such a choice is much less critical if the tourist is staying in the area for several days. Table # I (page 9) shows the driving times to the aquarium that impact the MPR. Another factor impacting FY is the nature of the entertainment experience. It is a universal axiom that recreation of a "participatory" nature will have a higher FY than one with a "spectative" nature. Thus, consumers will visit a wax museum once but will play golf at every available opportunity. With regard to the proposed aquarium, lAD is of the opinion that the concept has the potential for relatively broad market appeal among families, children and pre-teens. On the other hand, the concept is not as likely to appeal to teens and older adults without children living at home and who may have other interests. With regard to FY, or frequency of visit, the potential exists for substantial repeat visits, given the multitude of activities envisioned at the proposed aquarium and their participatory nature. e Feasibility Study for a Proposed Aquarium at Sunny Isles, Florida Page 15