What is a Dive Industry Marketing Mix analysis?
A marketing mix is defined as “as a set of controllable marketing tools that the firm blends to produce the response it wants in the target market” (Source: Kotler 2008, page 49). In our case, we’ll twist the analysis to work on an overall look of the dive industry.
And what is marketing? One commonly used definition is: Putting the right product at the right place, at the right price, and at the right time. And there you have your four 4 Ps of a dive industry marketing mix analysis!
- Product (including services)
- Promotion (including timing)
This Dive Industry Marketing Mix analysis based on the 4 Ps is strictly focused on marketing, not on the rest of the business. It doesn’t mean that the rest of your business activities are not necessary. Even if you have a great marketing mix, if you don’t have the right people or enough capital to deliver on your marketing plan, you’ll be going nowhere fast.
The 4 Ps of the Dive Industry Marketing Mix have to be analyzed and considered in relation to one another. As Kotler stated, these four elements must be blended. Therefore, it doesn’t matter in what order we look at them.
Quick clarification: Everything you sell is a product. It doesn’t have to be a physical product. A service (like a scuba diving course) is also a product.
Let’s start our Dive Industry Marketing Mix analysis with what we sell.
For the most part, products sold to consumers in the dive industry are the six products defining the Six Businesses in One: The 3 Ts and the 3 Rs.
- Training Courses & Material: Scuba Diving, First Aid, etc.
- Toys (Gear): Snorkeling, Scuba Diving, Outdoor, Apparel, etc.
- Travel: Day Trips, Fly-Away Trips, Charter Boat Trips, etc.
- Rental Gear.
- Refills: Air, Nitrox, Trimix, etc.
- Repair & Maintenance.
Over the last few years (and decades), there’s been very little change in the products offered by the dive industry.
Of course, dive regulators and BCDs are better and more comfortable. And the course material changes all the time. The training agency wants to sell you a new version and get you into a dive instructor update at the DEMA Show. But take a step back. Dive stores look the same. When you walk in, you see an ocean of black neoprene.
Trimix fills, and technical diving gear are relatively new. Yet, they are not for the masses. It’s a niche inside a niche.
Surf manufacturers sell more surf apparel to non-surfers than surfers – because surfing is cool and aspirational. You feel good wearing a surf t-shirt while using an iPhone cover with a surf brand – even if you’ve never been surfing and never will. In the dive industry, what do we sell to the masses of non-divers? Nothing. Why is that? It’s because we design equipment by divers for divers, to be sold within traditional dive stores. It keeps us small. As an exception, there’s snorkeling gear being sold through other retail stores – but that does not represent scuba diving to the people using it.
To get the dive industry on track to success, we should redesign dive gear to be significantly more fun and appealing. And we should also evaluate how we promote scuba diving – so that it becomes of interest to non-divers. We’ll discuss that, below.
Otherwise, product differentiation is what you usually try to achieve in any industry. Is there much of a difference between different dive stores, dive training agencies, and scuba gear manufacturers? Very little. And since there is no consistency in the quality of the experience from one Brand X Dive Store to another Brand X Dive Store, how can we expect a consumer to trust any of the brands in the dive industry? Or see more value in one brand over another?
Training courses have become a commodity.
There’s a bit more differentiation on the travel side – between high-end resorts and inexpensive getaways. Yet, even at a well-reputed resort, you can experience awesome service one week, and awful service the next week. Staff turnover is high, and quality assurance processes are lax.
Until the dive industry enterprises start taking the management of quality assurance and the consistency of the experience around their brands seriously, most dive products and services will remain a commodity.
In marketing, this is a bad position as it usually leads to price wars.
The lack of product differentiation in the dive industry leads to regular price wars.
In the Dive Industry Marketing Mix analysis, pricing is not something you should take lightly. Proper pricing can give you healthy profits – just like lousy pricing can bring you to bankruptcy.
Proper pricing is highly dependent on both internal and external factors. Is the consumer price sensitive? Is there a lot of price elasticity? What are your real costs for this product? Is your product differentiated? And so on.
In the dive industry, unfortunately, we usually see pricing based on what the competitor charges, which means that quite a few products are sold below acceptable profitability levels.
For instance, traditionally, air fills have been cheap, based on the theory that people will buy something when they come in to refill their cylinders. It’s not a practice that makes much sense anymore. Scuba divers can buy products online and visit you only for refills.
Providing fills to the local community of divers is one thing that will never be available online. Therefore, you should be making much higher profits on this local service.
Of course, it would require all dive stores in a geographical market to realize that.
Low pricing becomes a problem created by dive store owners and managers who are not trained in business management and blindly rely on repeating the mistakes of the other players in the market. It’s even more mind-boggling when considering the typical socio-demographic profile of a scuba diver – it’s somebody with money!
Training is another product we sell at abnormally low prices. Traditionally, in the dive industry, we were selling courses as a loss leader. The concept behind this practice was that people would come in to get their open water diver certification because of the low price, and then we’ll sell them all of the essential gear not included in the cost of the course (fins, mask, snorkel). And we’ll sell a full set of dive gear to a fair percentage of these divers.
Isn’t it evident that this model cannot survive in today’s environment? The model worked when divers were dependent on the dive pro at the local dive shops to be informed about scuba diving and scuba gear. If you haven’t noticed, it isn’t the case anymore. People go online to inform themselves (it’s being called “the democratization of scuba diving”) and, often, they will buy gear online – sometimes because of a better price, and mostly because the local dive shop doesn’t have it in stock.
On top of that, dive gear sales per diver are down.
Selling a course as a lost leader in the hope of making big profits on selling gear is a practice that should have died years ago. Courses need to provide healthy profits by themselves.
In other words, the “school” part of your business needs to be sustainable by itself.
Each one of the six businesses you run inside your dive center needs to be profitable and sustainable. That is the proper way of doing pricing.
3. Place / Pipeline
What is the best way to make our products and services available to consumers? What are consumers expectations on where they can find these products and services?
“Place” refers to the spatial location where your products are available (including online for downloadable products, for instance). “Pipeline” refers to the distribution channel.
Before the advent of the internet, scuba diving products were offered through the traditional channel of local dive stores.
Nowadays, years after the internet has changed both the retail and education industries, the dive industry continues to use the same antiquated pipeline designed decades ago.
I’ve participated in many dive industry strategy discussions. In all of them, it’s always assumed that the dive shop is the main mean of reaching consumers. Many dive industry high-level executives accept this statement as gospel. The question that remains unanswered to me is: Why do you expect to thrive in the years to come while using a 1980s business model while businesses in the retail and education industries have changed their business model?
Consumers behavior and expectations have changed drastically.
When they shop, consumers expect all brands, all models, all sizes and all colors to be available to them, today or tomorrow. The local dive shops are too small to be able to offer this.
If your business cannot deliver what consumers want… It’s a red flag!
As we’ve seen in Porter’s Five Forces analysis of the dive industry, suppliers to the local dive shop are much larger companies, well-capitalized, and in a position of strength versus the dive shops. Meanwhile, the local dive shop is in a tight spot on all five forces. And we’re relying on the weakest link in the chain to satisfy dive customers.
We’ve been asking for troubles, and now we’re in it.
4. Promotion (including Timing)
For promoting scuba diving to the masses and getting them to engage, it would make sense for course videos and material to be readily available online, free. We’ll make our profits selling the in-water part of the courses (and dive charters, dive gear, rental gear, etc.)
There’s one problem with this approach: The training agencies rely on selling course material at hefty profits – and they are in a position of strength versus the local dive shops.
The training agencies are the main force keeping the dive industry in its prehistoric business model.
Otherwise, promotion in the dive industry is often done by preaching to the choir. We promote scuba diving to scuba divers! At the same time, we don’t manage quality around our brands, making pretty much everything a commodity.
Most dive industry studies are focused on understanding the “current diver.” That’s fine. However, what we need the most is understanding the “non-divers” who are interested in scuba diving but haven’t done it yet – and promote scuba diving to them.
Once we've completed our review of the scuba diving industry, we will summarize key trends and strategic analysis findings before moving on to the next section where we'll work on drafting strategies for the dive industry.
Meanwhile, please contribute to the development of this analysis by providing feedback, below. Let us know changes, additions, and retractions you deem valid and valuable. Together, we can put the dive industry back on a path to growth.
The “4 Ps of Marketing” is just one of 5 methods we use for analyzing the dive industry.
Porter's Five Forces provides us with a snapshot of the current competitive forces in the dive industry. It helps predict profitability. A SWOT Analysis helps us identify if any of our weaknesses should be fixed to prevent going heads up with one of the external threats, and what opportunities match our strengths. The 4Ps and the 4Cs are focused on the marketing of our scuba divig products and services. And finally, the PESTLE Analysis looks into the external macro-environmental factors impacting our industry. It is a tool to identify threats and weaknesses for the SWOT analysis.