Individual assignment case

Warwick Castle
Warwick CastleWarwick Castle
Warwick Castle


Robert Craven and Stuart Chambers
'Warwick Castle - the finest mediaeval castle in England.'

INTRODUCTION
The Stratford-on-Avon and District Hotels and Caterers Association (SCATA) publishes a brochure
which has described the Castle as follows;

“This magnificent ancient Castle, situated at the very centre of England, is a treasure house of
great beauty and splendid, rare quality collections of pictures, furniture, furnishings and an
outstanding collection of arms and armour which bear witness to the power and influence of the
Earls of Warwick down through the centuries.
The beautiful grounds landscaped by Capability Brown, where peacocks roam freely, are a
delight in all seasons. . . Excellent catering facilities are available all year round to suit every
pocket and disposition, as well as several gift shops”

Warwick Castle is less than two hours by road from London with easy access from all major cities by
motorway, road and rail. This excellent infrastructure allows the area to be part of the itinerary of any
visitor to the UK. The County of Warwickshire is lyrically described in the SCATA brochure:

“Stratford-an-Avon and Shakespeare's Country. When you think of England, and the very best
of England, you are probably thinking about this fascinating region.
Here in this most English of English landscapes, the broad rolling sweep of the Cotswolds, the
classic half-timbered villages of the Vale of Evesham and leafy Warwickshire, there is an
unparalleled variety of attractions.
The birthplace of the world's greatest dramatist, William Shakespeare; the finest mediaeval
Castle and most-visited stately home at Warwick; England's most magnificent palace at

Blenheim; and the world's most famous theatre in Stratford”

THE CASTLE
The Castle is part of the Tussauds Group, a wholly-owned subsidiary of Pearson plc, which also owns
the Financial Times Group and Royal Doulton among other varied interests. The Tussauds Group runs
entertainment centres that include: Madame Tussauds, the famous waxworks in Baker Street, London;
the London Planetarium and Laserium; the Royalty and Empire Exhibition at Windsor; Alton Towers,
the UK's only world-rated leisure park; and Chessington World of Adventures and Zoo.
The Castle's General Manager, Martin Westwood, works in the stately home, from a majestic suite of
offices overlooking the grounds. He is enthusiastic about the Castle both as a building steeped in
history and as a business. In the relaxed atmosphere of his office, where he is surrounded by portraits
and old paintings of the Castle, he refers to it as 'a brand leader' in stately homes for it is in the top five
most visited historic sites that charge entry fees (see Table 1).

Table 1 Historic sites attracting more than 300,000 paid admissions
Paid admissions (000s)
1 Tower of London 2298
2 Roman Baths and Pump Room, Bath 950
3 State Apartments, Windsor 855
4 Stonehenge, Wiltshire 703
5 Warwick Castle 685
6 Shakespeare's Birthplace, Stratford 604
7 Leeds Castle, Kent 540
8 Hampton Court Palace, near London 525
9 Tower Bridge, London 528
10 Blenheim Palace, Wood stock, Oxford 517
11 Beaulieu, Hampshire 493
12 Cutty Sark, Greenwich, London 411
13 St George's Chapel, Windsor 372
14 Anne Hathaway's Cottage, Stratford 365

15 HMS Victory, Portsmouth 340
16 Mary Rose, Portsmouth 333
17 Royal Pavilion, Brighton 314
18 Chatsworth House, Derbyshire 306
19 Hever Castle, Kent 303
20 Fountains Abbey, North Yorks. 300

As you pass through the ticket office from the large car park you catch your first view of the Castle.
The view truly takes your breath away and fully warrants the description given by Sir Walter Scott in
1828: 'the most noble sight in England'.
MARKETING
Marketing Manager, Sarah Montgomery, is another enthusiast of the outstanding beauty of the Castle.
Discussing the marketing of the business she considers that the Castle's unique selling point must be
that carried on all the promotional material: 'Warwick Castle - the finest mediaeval castle in England.'
But she does not discount the Castle's unique state of preservation, the breadth of attractions it offers,
its location on the banks of the River Avon or its thousand-year span of history.
In the year 1068 the first castle was built at Warwick and since that time it slowly developed into a
mighty stronghold and later a grand mansion befitting the station of a high ranking nobleman. . . In
November 1978 the present Earl sold Warwick Castle and its contents to Madame Tussauds of London.
The Castle's marketing team recognised that the Castle attracted a diverse audience, each segment of
which wanted different things from a visit. So in targeting audiences the team had to decide whether it
was trying to sell the Castle aspect, the stately home aspect or the gardens. It was felt that all three
areas attracted different audiences and conjured up different expectations.
Research had established that from the public's point of view 'castles' were not associated with grounds
and formal gardens, and neither were they associated with the notion of being someone's home. On the
other hand, stately homes were associated with grounds and gardens but were felt to be formal and
museum-like, with ropes keeping the public away from the interesting areas. So, was the 'most visited
Stately Home in Britain' really a castle, or was the Castle also a stately home? This conundrum had to
be solved.
The Castle management has a deliberate policy of charging one overall admission charge for all areas

of the Castle and Grounds open to visitors. In the past they had considered charging separate admission
prices for the Castle and the Grounds but this, it was felt, would confuse the customer. (See Figure 1
for price and attraction details.)
The Castle regularly has detailed market research questionnaires compiled by an outside company.
Sarah said that market research is taken very seriously by the team:
“On average, overseas visitors represent 42 per cent of the total. Twenty-five per cent of our
customers seem to come in groups of greater than 20 and these groups are predominantly from
overseas. On the other hand, 58 per cent of visitors come from the UK, of which roughly half
come from within a 100 km radius of the site.
Another interesting point is that 25 per cent of all customers are repeat visitors which we feel
reflects the popularity of the Castle. With UK visitors 33 per cent are repeats. Of the non-
locals, that is UK residents from outside the 100 km radius, 78 per cent stay overnight in the
area and the remainder have travelled over 100 km to visit the area for the day. With the recent
opening of the M 40 motorway into London (approximately180 km} it is felt that travel time
may be a more important factor to consider than distance travelled in kilometres”
Figure 1 Admission Rates and attractions at Warwick Castle


The data are collected over a period of days, and the market research reports sent to Sarah include not
only the profile of visitors but what parts of the Castle they visit. The popularity of various parts of the
complex varies according to how busy the site is. For instance, on a quiet day 87 per cent might visit
the Private Apartments, but on a busy day this figure drops to 68 per cent. Likewise, during one such
busy period, the visitors to the Woodland Gardens increased from 17 per cent to 20 per cent, to the
Mound from 46 per cent to 52 per cent, and to the River Island from 34 per cent to 40 per cent. On
average, visitors stayed on the site for three hours. Coach parties tended to visit for three hours,
probably because the Castle was part of a full-day, tightly scheduled excursion that included other
nearby tourist attractions.
Competition for the paying tourists' disposable cash was quite fierce in the area, it was felt. Other sites
competing for the 'leisure pound' were the Black Country Museum, Drayton Manor (Adventure) Park,
West Midlands Safari Park, Cadbury World, Blenheim Palace, Alton Towers Theme Park, Ironbridge,

Stratford’s Shakespeare and Chatsworth House in Derbyshire.
In the Undercroft Restaurant marketing researchers overheard an elderly professor in conversation with
a friend he had encountered in the Castle grounds:

“I came early in the morning to avoid the rush. Any major historic tourist site is going to be
heaving by midday in the summer and personally I hate all the queuing and tourists with
cameras and all that.
I got here at about 10 a.m. when the place opened this morning. I was able to enjoy the pure
magic of the building with relatively few other people around.
By lunch-time the queues were what I felt to be unreasonably long, but it is August and this
must surely be their peak time here. I do wonder, for instance, should they not encourage more
visitors out of season and what about allowing people to visit early morning or in the evening
to avoid the lunch-time crush?”

MANAGING DEMAND
Warwick Castle brochures show a wide variety of activities that supplement turnover outside the peak
season. According to Sarah, this literature was intended 'to push up the shoulders of demand':
Every Friday and Saturday evening the Undercroft provides the setting for splendid five-course
mediaeval banquets recreating the eve of the Battle of Agincourt. . A special events calendar has been
published (see Figure 2).

• The Warwick Arts Festival uses the Castle as a venue in the evenings for a week in July.
• Exclusive tours of the Castle, and separately of the Gardens, are run by experts for pre-booked
groups. These are available during the periods October to March, and March to November
respectively, except during school half-term holidays and bank holidays.

As a profit centre for the Pearson Group, the Castle is given targets that increase at a rate exceeding
inflation. From these, prices are derived based on product developments, the prices that competitors are
charging and known external factors that may affect demand (such as exchange rates and elections!).
The Castle expected between 700,000 and 800,000 visitors in the next year and profit projections were

made based on these estimates. All catering facilities are run by the Castle, recognising franchising to
another company would result in lost control and reduce potential to participate in profitable activities.
Martin Westwood commented on fluctuations in demand:
“Staffing varies relatively little with demand. It is felt that once the basic positions around the
Castle are attended by staff, there is little that an additional staff member can provide. Winter
weekends attract more visitors than winter weekdays, such that Saturday and Sunday combined
turnover is the same as the other five days of the week put together. In summer things are more
even, a Saturday or a Sunday being equivalent to two weekdays, although Sunday is usually
busier than Saturday”

Figure 2 Warwick castle Special Events Calendar


BUSINESS OBJECTIVES
Martin is clear that the Castle's prime objective is 'to achieve growth in earnings per share for its
shareholders'. At the same time he emphasizes the sense of responsibility the management feels 'as
custodians of this precious monument' to work within it and use integrity and sensitivity at all times.
Hence all signs, directions and facilities take a very low profile. Flashing neon lights are not the order
of the day!
Sarah Montgomery commented on the need to underplay the commercial side of the organisation:
“Coca-Cola have offered us a sponsorship deal. They will give us money for a particular project
which will increase our revenue and also the number of visitors we are getting. The problem is that
Coke is the epitome of youth and fizz while the Castle's target market is adults ABC 1, average age
somewhere around 45! So how do we pull this deal together?”
It is the 'integrity' of the business in which the management take pride. It is not any business site but a
very special building that is loved and cherished by the staff. Their constant concern is how to run a
business from the Castle without destroying the charm and romance of the buildings, and without
covering it with obtrusive signs and facilities. All staff are very polite and courteous and, though they
are available to the public, tend not to interfere with the customers' visit. In fact they blend in with
visitors as they wear little that suggests they are actually staff. And when the Castle is relatively empty

of visitors it has a really enchanting atmosphere.

PERFORMANCE

Evaluation of the performance of the business has difficulties. On the one hand, queues are an obvious
problem (see Table 2) but then the customers do not seem to mind too much! Above all, the business is
going from strength to strength, and achieving healthy profit performance. So, while the criticisms have
to be noted, management has been achieving the high returns and growth that the shareholders require.

Table 2 Observations of queuing and flow, Tuesday afternoon


Queue to Private Apartments (number of people)
1.00pm 130
1.20 147
1.40 128
2.00 153
2.20 132
2.40 119
3.00 137

Flow through doors to Private Apartments (number of people)
1.00-1.20 104
1.20-1.40 113
1.40-2.00 107

Flow from Private Apartments and State Rooms (number of people)
1.00-1.20 127
1.20-1.40 117
1.40-2.00 121

Queue to Rampart Walk
0-20 people at anyone time

Number of people entering Rampart Walk
1.40-1.50 174

Queue at top of ramparts to get down (number of people)
6 minutes 63



Martin Westwood was defensive on the question of queues:

“What popular tourist attraction doesn't have queues, and in any case, the queues here move
pretty quickly. If we get queues for one part of the Castle we simply put out a sign suggesting
people move on to the next attraction, although, to be frank, that doesn't really work. You see,
the trouble is, that once people see a queue they don't want to miss out so they still join on the
end of it. Our marketing questionnaires (see Appendix 1) suggest that we've got the operation
about right, but there's always room for some improvement”

The Professor in the Undercroft Restaurant had raised several issues connected with this:

“The Castle really is in a unique condition of preservation. It's truly marvellous but I wouldn't
seriously consider visiting it in the peak season. I just happen to be in the area because we're
going over to Stratford tonight to see Twelfth Night at the Royal Shakespeare Theatre. I'm
really looking forward to it!
I wonder why they don't have off-peak rates for those not visiting around midday and maybe
open earlier and close later. I would be more than happy to spend more time on the site if it
weren't for all the other tourists everywhere. And another thing, couldn't they do a package deal

with the theatre at Stratford? I'm sure a lot of visitors here also go there.
In fact, I would pay a premium price to have the Castle almost to myself. For instance, I'd find
it simply delightful to sip a Pimms or a gin and tonic in the grounds as the sun went down. I
know that I am rambling but I am sure there's a way to re-jig the prices so that the site basically
generates more income throughout the year. And even if you say they do things out of season
I've not heard about them, so what's the use of publicity if it doesn't reach the people that want
to spend money?”

Sarah Montgomery, mindful of the need to keep a close eye on customers' diverse requirements, often
talked to individuals at the exit. A transcript of one such encounter is reproduced in Appendix 2.
APPENDIX 1
MARKETING QUESTIONNAIRE OF RANDOM SAMPLE OF PEOPLE LEAVING
WARWICK CASTLE
Age range
0-5 7
6-15 37
16-25 27
26-35 25
36-45 34
46-55 17
56-65 20
66+ 33

Area of origination
Local (within 100 km) 37
UK (outside 100 km) 27
Europe (excl. UK) 25
USA/Canada 47
S. America 3
Australia 11

Africa 5
Asia 14
Other/unspecified 2

Length of stay in area
Day trip 96
1-3 days 50
4-7 days 13
8+ days 5

Method of transport
Coach trip 96
Own transport 74
Hire car 31
Public transport 20
Other (bicycles etc.) 12

Did you find that you had to queue very much?
Yes 186
No 12
No comment 2

Did you feel that the queues were the same as other large tourist sites?
Same 190
Better 4
Worse 6

Did you visit ?
State Rooms and Great Hall 191
The Private Apartments 190

The Watergate (Ghost) Tower 31
The Armory 104
The Dungeon 193
The Torture Chamber 183
The Gatehouse and Barbican 87
Guy's Tower, the Rampart Walk and
Clarence Tower 186
The Victorian Rose Garden 103
The Peacock Gardens 117
The Conservatory 102
The River Island 57
Foxes Study and Cedar Walk 31
Pageant Field 101
The Mound 54
Refreshment Stall 118
Stables Restaurant and Tearoom 52
Undercroft Restaurant 71
The Bookshop 62

Did you .?
Bring your own picnic 32
Did you see the Red Knight 81
Did you buy a brochure 99

How long have you spent at the Castle?
<1 hour 5
1-2 hours 67
2-3 hours 75
3-4 hours 37
>4 hours 16

Is this your first visit?
Yes 148
No 52

Would you visit again?
Yes 144
No 31
Maybe 23
Don't know 2

APPENDIX 2
TRANSCRIPT OF A CONVERSATION WITH A VISITOR
Christabelle Trymko, Oldbury-on-Severn, Gloucester
'We got here at about midday. We came up for the day from Gloucestershire. It was quite a good trip
and the kids behaved themselves in the car. We had heard a lot about the Castle from some friends who
have just moved up to Stratford, which is just down the road from Warwick.
'The Castle's in superb condition! You don't know what it's going to be like until you get past the ticket
office and it really is amazing. It has been kept in impeccable condition, and the gardens are beautiful
as well as being far less crowded than the Castle.
'There were too many people in and around the Castle. The queues were an irritation but I parked my
husband in the queue and took the kids elsewhere until he was near the front and then we joined him. I
think a few people got upset because we seemed to be pushing in, but I'm not prepared to wait with
three children in long queues in the sun. Mind you, it's nothing like the queues at Madame Tussauds in
London, they really are crazy.
'I didn't realise quite how big the grounds were. If I had known I think we would have spent longer at
Warwick Castle and made a full day of it. We should have come here at about ten and then spent the
whole day here. That way the queues inside the Castle would have been shorter for us. The grounds are
lovely and they've got special picnic areas which I thought was a nice idea. (I wish we'd brought a
picnic.) Mind you, it does seem to be more than a bit light on entertainment for the kids.

'Nicky loved the man with the wonderful moustache dressed up in full Crusader uniform on the horse.
He was very good with the kids. Nicky also liked the waxworks in the Private Apartments place. The
queue wound its way up, down and around the place but apart from mild feelings of claustrophobia
(that's my problem, I suppose) it went at about the right speed and I guess it lasted a bit under an hour.
Oh yes, the Rampart Walk, they ought to warn you about just how many stairs you have to climb. I
mean, I know there is a sign but you don't take it seriously, do you! You go up and up and then there's
that great spiral staircase up the inside of that tower, I won't do that again in a rush! But it was worth it
for the view.
'All in all it was a good day. More interesting than the average castle and not full of the usual tourist-
oriented rubbish associated with tourist attractions. The commercial side is very much underplayed and
I like that. You don't feel obliged to buy ice creams and tee-shirts and pencils and tea towels. Maybe
some of the signs were a bit too discreet - we had to ask where the toilets were - but it makes a pleasant
change.
'Also I like the one price for everything. At other places, I object to paying an admission charge and
then paying on top of that for particular attractions. You always feel mean if you don't pay up, and then
you also feel that you might be missing something. No, I'd recommend the place and it's so much less
hassle than the tourist places in London which you almost feel obliged to visit every so often.'




This case is from: Cases in Operations Management (Second edition) Johnston, Chambers, Harland, Harrison, Slack, FT
Prentice Hall 1997