Threat of Substitute Products
Under Porter’s model the threat of substitute products refers to the competition created by similar products in different industries. A general review of the theme park industry demonstrates that marketing and consumer choice theory has favored the idea that consumer preference for theme parks remains consistent over time (Kemperman, Brogers, Oppewal and Timmermans, 4). Even though this basic theory has provided a foundation for marketing and promotion in the theme park industry, Kemperman and coworkers go on to note that shifts in this theory have been noted when examining consumer behavior (4). While consumers were once believed the maintain their loyalty to a particular theme park, with more choice for leisure time activity, consumers are now seeking addition opportunities for expanding their range of tourism destinations and activities (5). In addition to the fact that preferences of consumers appear to be changing as the number of leisure time activities increase, research also suggests that cost issues may also play a significant role in shaping consumer behavior and attitudes toward theme parks and other leisure events. For instance, Zanola reports that ticket prices have played a significant role in shaping consumer behavior with regard to visiting the circus (159). Even though costs for circuses have increased over the course of the last several years, this event is one which provides entertainment at a cost of the fraction of theme parks (160). Families seeking more economic forms of leisure activities may begin to eschew the high costs of theme parks in favor of other venues for their leisure time spending. This issue is one that is of notable concern given the current economic downturn in the US. Increasing costs of theme parks coupled with the inability of consumers to manage the costs may place increased pressure on theme parks to remain the viable choice of consumers for their leisure spending. Finally, a review of the theme park and tourism industry provided by Lai, Yu and Kuo demonstrates that while theme parks continue to do well as an integral part of the tourism and leisure industry, there are specific variables which continue to impact these organizations and their ability to retain customers over the long-term (509). In particular, Lai and coworkers note that customer service in theme parks has emerged in recent years as a prominent issue of concern; one that has been primarily overlooked by theme park developers in the efforts to capture the attention of consumers (510). Poor customer service in a theme park can and has resulted in the inability of the theme park to retain customers and negative word-of-mouth advertising that can impact the organization. Overall assessment of the threat of substitutes on the theme park industry does suggest that the threat is increasing. As theme parks struggle to meet the changing demands of US consumers, increased costs and lower-cost alternatives for leisure activities continue to direct consumers away from large theme parks. If these trends continue over time, the end result will be an overall decline in the revenues and sales of theme parks as they attempt to effectively compete with companies outside of the theme park industry itself. Intensity of Competitive Rivalry
Considering next the intensity of competitive rivalry in the theme park industry, a review of what has been noted in the literature suggests that competition within the industry itself is reaching a fevered pitch. Researchers examining competition among theme parks in the US indicate that beginning in the 1960s with the explosion of leisure culture in the US, the number of theme parks has exploded (Raluca and Strutzen, 641). When theme parks first become part of American culture, they were novel experiences for consumers (642). Theme park owners were able to capitalize on this novelty and, as a result, the number of theme parks in the US...
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