Case Assignment 4

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>cases NCRCC: Teeing Up a

New Strategic Direction

>Abstract

NCR Country Club started out as a benefit for thousands of National Cash Register employ- ees. By the late 1990s, those employees were aging rapidly and the core membership needed to be increased. NCRCC offers two golf courses. One is an award winning, championship- hosting course on the PGA tour. But it wasn’t attracting new members, especially younger families. This case is about a membership study done as part of a larger management initiative to evaluate several strategic directions the club might take to expand its member- ship. www.ncrcountryclub.com

>The Scenario

NCR Country Club (NCRCC) started in 1954 as an employee benefit of the National Cash Register Co. but is now an open-membership club. This country club located in Kettering, Ohio (near Dayton), hosts two 18-hole golf courses. The NCR South course, a par 71 championship course of 6,824 yards of heavily wooded rolling countryside, the site of the 1996 PGA Championship, the 1986 U.S. Open, and the 1998 U.S. Mid-Amateur, is consistently ranked by Golf Digest as one of the top 100 courses in the United States. The prairie-links style of the North course, a 6,358-yard par 70 course, is considered challenging. In southwestern Ohio, the active golf season usually lasts from May through October. Within a 30-minute radius of NCRCC, the avid golfer will find eight other private golf and country clubs as well as 29 public golf clubs and courses.

In 1997, after the purchase of NCR Corporation by AT&T, AT&T provided a $4.0 million interest-free loan to raze the original clapboard-sided clubhouse and replace it with an all-brick colonial-style facility. Boasting both formal and informal, inside and outside eating facilities as well as banquet and party rooms, the members voted that the new clubhouse would be totally smoke-free. The rich cherrywood paneling and the hunter green and burgundy décor mellow the high-ceiling, interior spaces. Golf memberships are $20,000 with social (nongolf) memberships at $1,000 each. NCR employees did not and do not pay membership fees to join. Additionally, each member must spend $150 per quarter in dining receipts and pay $225 (golf) or $160 (social) in annual dues.

Needing to attract new members to support the renovated facility after AT&T divested itself of NCR and given the growing age of its members, NCRCC implemented an aggressive membership campaign in 1998. The goal was to bring golf memberships to 680 and attract as many social memberships as possible. After only moderate success, NCRCC commissioned McMahon Group to assist with strategic planning.

Business Research Methods, 11e, Cooper/Schindler

NCRCC: Teeing Up a New Strategic Direction

>The Research

McMahon Group specializes in providing research and strategic consulting to golf clubs and full-service golfing facilities. “Golf club membership within the United States is perceived as a discretionary luxury of life. NCR faces a similar situation found elsewhere in clubs around the country—an older satisfied membership which sees no reason to change what they perceive to be a good thing,” shared Frank Vain, president of McMahon Group. “With NCR, we faced another wrinkle. Because NCR was once corporately owned, NCR retirees and current employees saw membership as an entitlement, a right.”

After McMahon’s First Impressions visit (a free on-site assessment where a club specialist tours facilities, collects information on membership and operations, and discusses industry trends with strategic planning committees), NCRCC’s board hired McMahon to provide direction and assistance to NCRCC’s strategic planning committee. “Historically, NCRCC has a 7 percent penetration rate among NCR employees. NCR’s employee pool was trending smaller, providing continuing downward pressure on NCRCC membership,” explained Vain. “With membership segments of NCR retirees (1/3 of members) and current NCR employees (another 1/3 of members) getting less numerous each year, only the segment comprised of non-NCR affiliates provides an opportunity for growth. NCRCC needs to become a stand-alone club to survive.”

McMahon Group conducted six focus groups at NCRCC on December 3–4, 1998, involving 43 members, seven nonmembers, and 12 employees. Especially among younger members (under 46) and nonmembers, a golf-only club was less attractive than the full service array that some other area country clubs offered. A consistent theme was that members did not feel they received the overall level of service at NCRCC that they expected from a fine private country club, whether it be in the dining operation or on the golf course. Staff members were frustrated that meeting the board’s profit directive was often counterproductive to a high level of service. The NCRCC board directed McMahon Group to conduct a membership study to explore the feasibility of adding additional facilities, including swimming and fitness facilities to attract younger adults and families with children.

McMahon Group distributed mail surveys to 1,650 members and their spouses in January 1999 (see Exhibit C-NCR 1–2). A return rate of 57 percent and 48 percent, respectively, netted 886 usable surveys. Data were interpreted at ±3% (or ±0.1) at the 95 percent confidence level. Due to McMahon’s extensive consulting and research experience with golf facilities nationwide, it was able to compare NCRCC’s membership survey results with those of members of 80 other country clubs.

Business Research Methods, 11e, Cooper/Schindler

>Some Results

Overall, 72 percent of NCRCC members were either satisfied or very satisfied. This is slightly less than the 79 percent satisfaction level for other clubs. Only 12 percent are very satisfied, with other clubs averaging 21 percent. The group with the highest dissatisfaction rate (19 percent dissatisfied or very dissatisfied) was the key 55–64 age group, with the under 46 group generating 11 percent dissatisfaction. While members currently saw the club as an “Adult Golf and Dining Club” (63 percent), many believed its future would need to incorporate facilities for children, if the club were to remain competitive for new members. This was especially true for those members under age 46.

Most current members joined for golf (80 percent either important or very important) or dining (77 percent either important or very important). Most members were satisfied with golf (81 percent either satisfied [29 percent] or very satisfied [69 percent]). However, level of satisfaction was lower with the over 65 group when it came to course layout (58 percent very satisfied) and condition (77 percent very satisfied). Fewer members were satisfied with dining (49 percent either satisfied or very satisfied). However, even given some dissatisfaction, 61 percent felt their membership was a good value.

The 37th Hole, the casual dining facility, generated concerns about speed of service (27 percent either dissatisfied or very dissatisfied), professionalism of wait staff (19 percent either dissatisfied or very dissatisfied), and menu variety (36 percent either dissatisfied or very dissatisfied). The same concerns surfaced in the formal dining area, with menu variety and meal-to-meal consistency generating the highest dissatisfaction scores. It is very important for NCRCC to provide casual adult dining (95 percent either very important or important), but less so for casual family dining (78 percent), outdoor dining (69 percent), formal dining (44 percent), men’s grill (37 percent), and women’s grill (22 percent). Dining prices are seen as the same (65 percent lunch, 48 percent dinner) or higher (32 percent lunch, 47 percent dinner) than other clubs and restaurants frequented by members. Members overwhelmingly continue to endorse the no-smoking rule (97 percent formal dining, 94 percent 37th Hole, 83 percent bar/lounge).

“Members think of NCRCC as first a golf club, but the golf wasn’t meeting expectations. Second, members see NCRCC as a dining club, but the members were dissatisfied with the casual dining product and service,” shared Vain.

Survey results offered good and bad news. Additional facilities would not be attractions to most current members, but many members are interested in improving the current facilities. Fully 59 percent, however, were unwilling to pay higher dues (including 43 percent of under age 46) to obtain the changes they found attractive.

Business Research Methods, 11e, Cooper/Schindler

NCRCC: Teeing Up a New Strategic Direction

All Members Members under 46 (% ) (% )

Facility Additions

Swimming pool Tennis courts Health and fitness center Spa

30 60 22 36 30 49 30 58

Activities

For adults For families

For children

26 40

23 53

18 47

Current Facility Alterations

Expanding bar/lounge (Important or Very Important) 41

Improving the driving range (Important or Very Important) 36

Improving short game practice area (Important or Very Important) 40

“New facilities were an attraction for the non-NCR affiliated segment,” summarized Vain in discussing what McMahon Group shared with the strategic planning committee following the completion of the study. “New facilities, especially swimming, fitness, and outdoor dining, provide the best opportunity to broaden the attraction of the club.”

>Who Answered the survey

· 74% golf (single or family) and 24% social, with 2% corporate memberships.

· 65% are (23%) or had been (42%) employed at NCR.

· 55% male, 45% female.

· In each of four age groups:

· Under 46

· 46–55

· 56–65

· 66 or older (33%)

· 74% lived within seven miles of NCRCC.

· 42% had been members for 20 or more years.

· 78% did not have children (under age 21) living at home.

· 41% belonged to a swimming/tennis club (15%) or fitness facility (26%).

· 81% reside in the Kettering-Dayton area year round.

(19%) (23%) (26%)

Business Research Methods, 11e, Cooper/Schindler

>Sources

>Discussion

1. 1 Build the management-research question hierarchy, through the investiga- tive questions stage. Then compare your list with the measurement questions asked.

2. 2 Given the research question, how appropriate were the measurement questions?

3. 3 Describe the sampling strategy. How appropriate were the various sam- pling design decisions?

4. 4 What, if any, problems did you find with the questionnaire as a whole? Consider structure, directions, question order, question phrasing, appropri- ateness of response strategy chosen, etc.

5. 5 If you were McMahon Group, how would you present the findings of your study to the NCRCC board? Explain the rationale for your chosen method.

6. 6 Given the data presented in the case:

7. 7 What would you recommend to the board of NCRCC with respect to

adding facilities like tennis courts, a swimming pool, a spa, a fitness

center, and a year-round driving range?

8. 8 What would you recommend to the board of NCRCC with respect to

adding or changing programming activities like social activities for adults,

families with children, and children?

9. 9 What would you recommend with respect to changing current operations?

Frank Vain, president, McMahon Group, provided the instrument and data with the permission of Larry Appleby, general manager, NCR Country Club in November 1999. Used with permission of Pamela S. Schindler and Donald R. Cooper, Business Research Methods, 7/e, Burr Ridge, IL: McGraw-Hill, © 2001.

Business Research Methods, 11e, Cooper/Schindler

NCRCC: Teeing Up a New Strategic Direction

EXHIBIT C-NCR 1–2 NCR Country Club Membership Survey*

INSTRUCTIONS:

Please complete the questionnaire, answering all questions that pertain to your interests at the Club. If you do not par- ticipate in a particular Club activity and do not feel qualified to respond to the questions regarding that activity, please leave those questions blank or indicate “No Opinion” and move on to the next question. Note: Space is provided at the end of the questionnaire for your written comments and suggestions.

Completed questionnaires should be mailed in the enclosed postage-paid envelope by the date printed on the cover let- ter directly to McMahon Group at 884 Woods Mill Road, Suite 201, St. Louis, MO 63011.

IMPORTANT: Completely fill in the ovals that correspond to your answers for each question with either a pen or a pen- cil. The surveys will be electronically scanned. Please do not make extra marks on the questionnaire except in the space provided for written responses at the end of the survey.

1. Pleaseindicateyour“overall”satisfactionwithNCRCountryClub:

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2. Whichofthefollowingbestrepresentswhatyoufeel(1)iscurrentlyand(2)shouldbetheprimarypurposeofNCR Country Club? (Please mark only one per column.)

Fill in your answers like this G N o t l i k e ❍ o r ❍✗ o r

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(5) Very Satisfied (4) Satisfied (3) Neutral (2) Dissatisfied (1) Very Dissatisfied

A family oriented, full service country club with activities for children. An adult oriented, full service country club with limited activities for children. A golf and dining club primarily for adults.

A golf club primarily for adults.

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3. Usingascalefrom“5”(VeryImportant)to“1”(VeryUnimportant),howimportantwereeachofthefollowingto you in your decision to join NCR Country Club?

(1) Currently (2) Should be (1) Currently (2) Should be

(5) Very (4) (3) (2) (1) Very Important Important Neutral Unimportant Unimportant

To meet new friends Club location

—in relation to home

—in relation to work Club social functions

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(continued)

*This survey has been reformatted from its original design to fit the specifications of this text. Neither the questions nor the essence of the design has been modified.

Friends were/are members Parents were/are members Exclusivity of club’s members Affiliation with NCR Corporation Competitive initiation fee

Private parties/banquets

Reputation of club

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Dining ❍❍❍❍❍ Golf ❍❍❍❍❍

Availability of 36 holes of golf “Top 100” ranking of golf course

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4. PleaseindicateyoursatisfactionwiththesecharacteristicsofyourClub’sBoardofTrustees,Committees, and Management:

BOARD

Communication with the membership

Degree to which board is representative of membership

COMMITTEES

Effectiveness of Club committees

MANAGEMENT/STAFF

Effectiveness of Club management

Responsiveness to member questions and suggestions

Overall level of service provided by Club’s management & staff

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5. PleaseindicatehowimportanteachofthefollowingClubactivities/servicesistoyouandalsohowsatisfiedyouare with each:

(5) Very (4) (3) (2) (1) Very Important Important Neutral Unimportant Unimportant

(5) Very (4) (3) (2) (1) Very Satisfied Satisfied Neutral Dissatisfied Dissatisfied

Rating scale: 5 = Very satisfied, 4 = Satistifed, 3 = Neutral, 2 = Dissatisfied, 1= Very dissatisfied, N.O. = No opinion Rating scale: 5 = Very important, 4 = Important, 3 = Neutral, 2 = Unimportant, 1 = Very unimportant, N.O. = No opinion

Golf Dining Clubsocialfunctions Private parties Children’sactivities Family activities

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SATISFACTION IMPORTANCE

5 4 3 2 1 N.O. 5 4 3 2 1 N.O.

6. Pleaserespondtothefollowingstatement:“IreceivegoodvalueforthecostofmymembershipatNCRCountryClub.”

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7. Pleaserespondtothefollowingstatement:“Thereareasufficientnumberofsocialactivitiesattheclubthatappealto my age and interest group.”

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8. DoyouhaveaccesstotheInternet? ❍ Yes ❍ No Are you aware the club has an Interent website? ❍ Yes ❍ No Would you like e-mail notifications from the Club on a regular basis? ❍ Yes ❍ No

9. PleaseindicateyoursatisfactionwiththefollowingaspectsoftheClub’snewsletter,TheMulligan,andalsoClub communication in general.

(5) Strongly Agree (4) Agree (3) Neutral (2) Disagree (1) Strongly Disagree No opinion

Newsletter Content

Notification of upcoming events

Membership activities and stories

Club business (reports from board committees)

Newsletter appearance/format Newsletter timeliness Club communication in general

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(5) Very (4) (3) (2) (1) Very Satisfied Satisfied Neutral Dissatisfied Dissatisfied

Section II. Golf

IF YOU ARE NOT FAMILIAR WITH THE GOLF FACILITIES AND OPERATIONS, PLEASE SKIP TO THE NEXT SECTION OF THE QUESTIONNAIRE.

10. Please indicate your satisfaction with these aspects of the SOUTH and NORTH golf courses:

Rating Scale: 5 = Very satisfied, 4 = Satisfied, 3 = Neutral, 2 = Dissatisfied, 1 = Very dissatisfied, N.O. = No opinion

Course layout

Overall course condition

Course landscaping (flowers and plantings)

Tee box condition Conditionoffairways Conditionofgreens Conditionofbunkers

Irrigation Drainage Condition of cart paths Course restrooms

Availability

Condition

Availability of drinking water

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SOUTH COURSE NORTH COURSE

5 4 3 2 1 N.O. 5 4 3 2 1 N.O.

SOUTH COURSE NORTH COURSE

5 4 3 2 1 N.O. 5 4 3 2 1 N.O.

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Beverage cart availability 11. Please indicate your satisfaction with these aspects of the golf operations at the Club: (answer survey for question 11 on the following page)

(5) Very (4) (3) (2) (1) Very No Satisfied Satisfied Neutral Dissatisfied Dissatisfied Opinion

Golf Pro Shop

Interior appearance Pro Shop cleanliness Merchandise selection Pro Shop service Pro Shop prices

Pro lessons Bag drop service Bag storage and club cleaning service Cart service Cart cleanliness

Practice range

Condition Size ❍❍❍❍❍❍

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Range ball condition Speed of play

Tournaments

Quality Value for price Format of tournaments

Adult golf programs (i.e., leagues) Junior golf programs Tee time reservation system

Halfway House

Hours of operation Service Menu variety

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12. How do you feel about the overall use of the golf course as it now exists at the club?

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Amount of time available for casual, open member play ❍

Amount of time permitted for guest use ❍ Amount of time available for junior play ❍

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(5) (4) Somewhat (3) (2) Not Quite (1) Excessive Excessive Fine as Is Dissatisfied Not Enough

(continued)

Number of member-scheduled events/tournaments

Number of nonmember outings on Mondays

Number of nonmember outings on days other than Mondays

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(5) (4) Somewhat (3) (2) Not Quite (1) Excessive Excessive Fine as Is Dissatisfied Not Enough

13. Please respond to the following statement: “If the Club had a caddy program I would support the program and use caddies on a regular basis when I play golf.”

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14. Please indicate your satisfaction regarding these aspects of the dining in the 37th HOLE, the MEMBERS’ DINING ROOM, and for PRIVATE PARTIES:

(5) Strongly Agree (4) Agree (3) Neutral (2) Disagree (1) Strongly Disagree No opinion

Rating scale: 5 = Very satisfied, 4 = Satisfied, 3 = Neutral, 2 = Dissatisfied, 1 = Very dissatisfied, N.O. = No opinion

Service:

Staffappearance

Speedofservice

Friendliness of wait staff

Professionalism/ training of wait staff

Food:

Quality—Food well prepared

Food presentation (visuallypleasing)

Meal-to-meal consistency

Menu variety

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(continued)

MEMBERS’

37th HOLE DINING ROOM PRIVATE PARTIES

5 4 3 2 1 N.O. 5 4 3 2 1 N.O. 5 4 3 2 1 N.O.

Other:

Ambiance/décor of rooms

Winelist/selections Valuefortheprice Partyplanningassistance Partyfollow-upbystaff

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15. How important is it for the Club to provide each of the following dining styles?

Casual adult dining Casual family dining Formal dining (coat & tie required) Outdoor dining Men’s grill Women’s grill

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16. How do the Club’s prices compare to the prices charged for similar meals at other clubs and restaurants you visit regularly? Please compare similar dining experiences (i.e., dining in the 37th Hole should be compared to dining in a casual, grill-type restaurant and dining in the Members’ Dining Room should be compared to a more upscale-type restaurant).

The Club’s prices are . . .

Lunch Dinner Private parties Social events Wine Cocktails

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MEMBERS’

37th HOLE DINING ROOM PRIVATE PARTIES

5 4 3 2 1 N.O. 5 4 3 2 1 N.O. 5 4 3 2 1 N.O.

(5) Very (4) (3) (2) (1) Very Important Important Neutral Unimportant Unimportant

(5) Much (4) (3) About (2) Somewhat (1) Much Lower Lower the same Higher Higher

17. Please respond to the following statement: “The clubhouse should remain a totally nonsmoking facility.”

(5) Strongly Agree (4) Agree (3) Neutral (2) Disagree (1) Strongly Disagree No opinion

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Section IV: The Future

18. Listed below are examples of new facilities or additional services the Club may consider adding in the future. Using a scale from “5” (Very important) to “1” (Very unimportant), please indicate how important you feel each item is to the future of the Club.

Add a swimming pool

Add tennis courts

Add a health/fitness facility

Add paddle tennis courts

Add a bowling alley

Add spa facilities (sauna, steam room, Jacuzzi, etc.)

Provide more social activities Provide more family activities Provide more children’s activities Add a year-round driving range

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19. Listed below are examples of improvements to the existing Club facilities that may be considered in the future. Using a scale from “5” (Very important) to “1” (Very unimportant), please indicate how important you feel each item is to the future of the Club.

Enlarge the bar/lounge

Enlarge the banquet room to better accommodate large functions such as weddings

Provide better pedestrian access

Improve the golf driving range

Improve the golf short game practice area

Modify the North Course where possible to make it more challenging

Modify the South Course where possible to make it more challenging

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(5) Very (4) (3) (2) (1) Very Important Important Neutral Unimportant Unimportant

CASES 743

20. a.

Please respond to the following statement: “I would be willing to pay somewhat higher annual dues in order to make the Club more private and provide a higher level of service.”

b. How much of an annual dues increase would you be willing to pay to make the Club more private and provide a higher level of service? (Please mark only one.)

❍ Nothing ❍ 5% ❍ 10% ❍ 15%

❍ 20% ❍ 30% ❍ 40% ❍ 50% or more

21. At present, the Club allows nonmember outings on the golf course on Mondays as well as other days of the week. These outings generate substantial revenue for the Club, which helps to keep member dues lower than they would be without this revenue. However, these outings also reduce member access to the courses, add wear and tear to the courses, and limit the amount of time available for course maintenance.

Please respond to the following statements.

1. “The Club should eliminate outings on days of the week other than Mondays, and I would be willing to pay an additional $100 in annual dues for improved course access and to make up for this lost revenue.”

2. The Club should eliminate half the outings on Mondays and all outings on days of the week other than Mondays and I would be willing to pay an additional $300 in annual dues for improved course access and to make up for this lost revenue.”

3. The Club should eliminate all outings, both on Mondays and other days of the week, and I would be willing to pay an additional $500 in annual dues for improved course access and to make up for this lost revenue.”

22. Please respond to the following statement: “One of the golf courses should always be open for member play on Mondays.”

23. Some clubs include additional fees such as locker rental, bag storage, shoe-shine service, and driving range in the annual or monthly dues. At NCR Country Club, additional charges such as locker rental and shoe-shine service are optional services and fees and are billed as separate items.

Please respond to the following statement: “Over the next few years NCR Country Club should move in the direction of bundling all fees and charges (such as locker rental and shoe-shine service) into one dues amount to be paid annually.”