SURFSCHOLAR BUSINESS PLAN: QUALITY REIGNS SUPREME Samuel Einstein Project submitted as partial requirement for the conferral of Master of Science in Marketing Orientador: Prof. Fernando Jorge Almeida Oliveira Brochado, Professor Auxiliar Convidado da ISCTE Business School October 2016 SurfScholar Business Plan: Quality Reigns Supreme Samuel Charles Einstein SURFSCHOLAR: QUALITY REIGNS SUPREME SurfScholar Business Plan: Quality Reigns Supreme Abstracto A tese de mestrado que de seguida se apresenta vincula um plano de negócios para uma empresa baseada na prestação de serviços, que visa ajudar estudantes Americanos a matricularem-se em programas de mestrado em Lisboa, Portugal, por uma fracção do custo que teriam que acarretar no seu país. Combinando uma educação de alta qualidade e internacionalmente reconhecida com surf de calibre mundial, o enriquecimento cultural é a missão. A empresa, SurfScholar, funcionará numa base de comissão por estudante, permitindo que o primeiro serviço seja gratuito. A revisão literária tem o papel de fundação crítica sobre a qual o plano de negócio de alicerça. Entre os tópicos abordados encontram-se a diferenciação de marcas, serviço e marketing de relação, tendências e motivos para estudar no estrangeiro, marketing de destinos (destination branding), e publicidade de boca-a-boca. Com uma compreensão mais abrangente dos tópicos mais importantes relacionados com a empresa de prestação de serviços, foram utilzadas ferramentas como a análise PESTLE, o Modelo de 5 Forças de Porter e a análise SWOT, no sentido de adquirir contexto mais profundo. Uma vez analisada a concorrência, foi levada a cabo uma análise STP (segmentation, target and positioning) mais detalhada. Incluem-se também os factores-chave de sucesso, a estratégia da empresa e a descontrução da marca da empresa, que conta com o logo, a ideia, missão, visão, valores e imagem de marca. Foi elaborado um marketing mix focado nos 7 P’s e Q. Tal inclui produto, preço, promoção, local (place), pessoas, processo, provas físicas e qualidade. Em suma, um plano financeiro foi executado com o objectivo de estabelecer e quantificar a viabilidade da empresa. Keywords: Service, Quality, Higher Education, Word of Mouth Communication I SurfScholar Business Plan: Quality Reigns Supreme Abstract The following master’s thesis entails a business plan for a free service-based company aimed at helping American students to enroll in fulltime master’s programs in Lisbon, Portugal for a fraction of the price of what they would be paying at home. Combining a high-quality and internationally accredited education with world-class surf, exploration and cultural enrichment is the mission. The company, SurfScholar, will function on a per student commission basis which will allow it to offer the service for free. The literature review serves as a critical foundation from which the business plan can be formulated. Topics that are included are brand differentiation, service and relationship marketing, study abroad reasons and trends, destination branding, and word of mouth communication. With a broader understanding of the important topics related to the service-based company, a PESTLE analysis, Porter’s 5 forces and a SWOT analysis were conducted to gain further context. Once the competition was analyzed, an in depth STP (segmentation, target and positioning) analysis was conducted. There is also the inclusion of key success factors, the company strategy and a breakdown of the company brand, including logo, idea, mission, vision, values and brand image. A marketing mix was conducted that focused on the 7 P’s and Q. This includes product, price, promotion, place, people, process, physical evidence and quality. In conclusion, a financial plan was executed with the intended goal of establishing and quantifying the viability of the company. Keywords: Service, Quality, Higher Education, Word of Mouth Communication II SurfScholar Business Plan: Quality Reigns Supreme Acknowledgments First off, I would like to thank the city of Lisbon for having me and giving me infinite reasons to avoid going back to Los Angeles. It is a pleasure inhabiting your city and riding your waves. I would also like to extend my gratitude to ISCTE Business School and its Dean José Paulo Afonso Esperança for believing in SurfScholar and giving us a chance to prove ourselves. Thank you to my family. Thank you to my friends. And thank you to my Advisor, Prof. Fernando Jorge Almeida Oliveira Brochado. III SurfScholar Business Plan: Quality Reigns Supreme Index Abstracto .............................................................................................................................. I Abstract ............................................................................................................................... II Acknowledgments ............................................................................................................. III Index ................................................................................................................................. IV 1. Executive Summary ......................................................................................................... 1 1.1. SurfScholar ............................................................................................................... 1 1.2 Business Plan ............................................................................................................. 1 2. Introduction ..................................................................................................................... 4 3. Literature Review ............................................................................................................ 6 3.1 Brand Differentiation and Differentiation Marketing ............................................... 6 3.1.1 Segmentation ...................................................................................................... 6 3.1.2 Experiential Positioning/Differentiation ............................................................. 7 3.2 Service and Relationship Marketing .......................................................................... 7 3.2.1 Service Marketing/Quality ................................................................................. 7 3.2.2 Cronin & Taylor ................................................................................................. 8 3.2.3 Service Marketing vs. Goods Marketing ............................................................ 9 3.2.4 Relationship Marketing/Quality: ...................................................................... 10 3.2.5 Relationship Marketing in Higher Education ................................................... 12 3.2.6 Customer Loyalty and Satisfaction in Higher Education ................................. 13 3.3. Why Study Abroad? ............................................................................................... 14 3.3.1 Study Abroad Trends ........................................................................................ 14 3.3.2 Employability ................................................................................................... 16 3.3.3 Growing as an Individual ................................................................................. 17 3.3.4 Expectancy Theory ........................................................................................... 18 3.3.5 Marketing Study Abroad .................................................................................. 19 3.4 Destination Branding ............................................................................................... 20 3.4.1 ‘Destination’ .................................................................................................... 20 3.4.2 Destination Branding and Tourist Created Content (TCC) .............................. 22 3.5 Word Of Mouth (WOM) ......................................................................................... 23 3.5.1 Online vs. Offline WOM .................................................................................. 24 4. PESTLE Analysis .......................................................................................................... 25 4.1 Political .................................................................................................................... 25 4.1.1 Bologna Declaration ......................................................................................... 25 IV SurfScholar Business Plan: Quality Reigns Supreme 4.2 Economic ................................................................................................................. 27 4.2.1 Economic - USA ............................................................................................... 27 4.2.2 Economic - Portugal ......................................................................................... 29 4.2.3 Economic Comparison: USA and Portugal ...................................................... 30 4.3 Social ....................................................................................................................... 31 4.3.1 Events: Music ................................................................................................... 31 4.3.2 Events: Surf ...................................................................................................... 32 4.3.3 Web Summit ..................................................................................................... 32 4.3.4 Demographic