Coleman Art Museum: Case Study

Executive Summary

The Problem:

Coleman Art Museum has reported a loss for its three consecutive years and is now reconsidering alternatives to improve the financial position. The museum is heavily reliant on endowments and grants. Financial resources are now depleting, and the museum is also facing an image problem. Furthermore, the museum also has moved six blocks which could impact it to change its target market. The museum has been incapable of reanalyzing their market demographics and understanding its effect on its revenues. Currently, it is also unable to showcase all of its art and history pieces effectively because of the space problem. They are focusing on attracting more visitors; however, this does not necessarily mean more memberships. Memberships come with interest. Thus, interest in the Museum should be raised.

Situation Analysis

The facts of the Case

Coleman Art Museum is a non-profit Museum. The museum lacks any core identity in the eyes of its community. The museum is also witnessing losses on its auxiliary activities of Skyline Buffet and Gift Shop. The personal and corporate memberships are offered to range from $50 to $5000. The core activities of the Museum include the permanent art and historical items along with the rotating special exhibitions. The museum does not charge any fees for visitors paying visits to the museum. The museum has been experiencing financial loss for the last three years consecutively, and before that, it either made a profit or made it break even.

Strengths

• The museum is currently located in a populated area
• The museum has a good relationship with the media
• The museum has a dedicated staff of around 185 employees
• The museum has over 15,000 works of art in the permanent collection
• Around 475 Volunteers work for the museum in various capacities
• There is ample parking to accommodate high-turnover events
• The staff is willing to work hard to rectify this financial loss situation
• Free Admission for visitors
• Several membership alternatives available
• Public Transportation Access
• The Special Exhibitions proportion to total attendance has increased over time
• Visitors willing to pay a nominal fee for visiting of the museum
• Gift Shop and Skyline Buffet Restaurant are also the main strengths and income sources for the museum

Weaknesses

• The limited space of the museum, which causes problems with the display of the artworks, is one of the main weaknesses.
• The museum has more than 15,000 permanent artworks; however, it cannot display it all at the same time.
• The museum has a big problem with its image; the brand image of the Museum is non-existent in the eyes of its visitors. The building of the museum does not give any signs of being a museum or art center. The new building is often referred to as the marble box by the critics.
• The decline in the new memberships and its renewal
• The efforts of the staff for membership renewal through mail, internet, and telephone solicitation are another internal weakness for the museum
• Lack of focus on one area of art

Favorable Conditions

• Through an increase in brand awareness and identification, the museum can gain more visitors and members
• The use of increased benefits for the memberships can also provide more membership revenue
• The use of brand image and its projection of the target market
• The exploration of the marketing tactics can also provide a favorable condition
• The alternative for mail solicitation can also be considered as an important favorable condition
• The improved opinion of the public for a museum can also provide a favorable condition for the museum
• Use of all display items simultaneously for all the artworks at the same time can also enhance the visitor rate

Threats

• The declining availability of grants, gifts, and financial support for the museum
• The competition from other museums is high and can become a threat to CAM
• The approval process for the needed changes for the improvement of the financial position of the company is very lengthy and non-supporting
• The decline in the renewals of the memberships is another threat for the museum
• The poor reviews on the online platforms are a threat to the museum brand image
• The negative critics are also similarly threatening for the museum
• The Board of Trustees cannot let every recommendation to be implemented which can be a threat for the company as it needs these changes to be implemented immediately

Overall SWOT Analysis

Coleman Art Museum is a struggling non-profit museum, which has long neglected its brand image and has not developed as per its mission. This has resulted in the consequences of accumulated loss of around $794,066 for three consecutive years.

The main strength of CAM is its collection of 15,000 art pieces as without this it cannot compete in the market. The reason this is considered as the main strength of CAM is that visitors come to the museum for the art pieces. Thus, this strength should be used for the purpose of creating new members and renewing old members i.e. the second most important strength of the museum. Membership is the second important strength for the museum because it is the main recurring income generator. This is evident from the Summary of Income and Expenses of the museum which shows that the highest income generating operations is memberships.

Operations In Dollars ($)	2004	2003	2002
Appropriations by Fannel Company	1786929	1699882	1971999
Memberships	2917325	2956746	3134082
revenue	6657644	6009864	6606190
Membership Contribution	43.82%	49.20%	47.44%

 

The museum is lagging behind because of its lack of brand image. And this is the main weakness that it should be working on. This weakness is considered as the main weakness because of three apparent reasons; there is no interest in the community, the museum is criticized and given bad reviews, and consequently it has been incurring financial losses for last three consecutive years.

	2004	2003	2002
Net Loss	$-383715	$-183818	$-226553

 

The Museum has a collection of 15000 artworks for which the community (strength) is not showing much interest. This is entirely because of the non-presence of the brand image of the museum (weakness). The museum also has no significant presence in the community. Where there is a weakness, any improvement in this weakness can turn into an opportunity for the museum. For exploitation of the main opportunity (brand image), the museum needs to use its main strength of collection of Art and History pieces of around 15000. The brand image is considered the main opportunity because of these reasons; it can help create more interest in the community, it can increase the memberships consequently increasing the revenue, it can provide CAM with a USP against it competitors. The museum can aim for creating a brand image which interests people and provides financial stability to the museum. There are numerous accompanying steps which can be considered in order to better exploit this opportunity and use its strengths. The Gift Shop, Parking lot, Restaurant and membership are the income generators for the museum (strengths). For building its brand image (opportunity), the museum needs to promote its membership and its benefits in terms of discount on the restaurant, and gift shop. Membership should be made the main tool for the brand identity of the museum as it is the main source of income as well. The membership benefits should be advertised and promoted using mail, telephone, and social media marketing. Social Media marketing is not a costly method of promotion. Thus, it can be used for the museum brand identity.

However, the membership and its renewal are declining. The focus on several visitors rather than on building the brand identity has caused it to lose its membership. The museum is facing competition from its competitor, and thus it should work on improving its financial condition by building its brand image. The decline in the grants, funding, has significantly affected its potential. However, the volunteer staff and permanent staff are dedicated to working hard for its financial position improvement (Alexander, 2018). Other than building the brand image, the museum can charge a nominal fee of $2 for admission in the museum on its visitors which offers one opportunity.

Furthermore, it can also look at the advertising of its brand for better brand awareness and increased bookings for specialized events. The opportunity of providing a new membership for Students and elders for $30 is another option. The discount on membership and restaurant can also be looked into to improve the market interest better. The increase in the volume of the members would consequently help in increasing the revenue of the museum as well. The nonmembers would also be encouraged to get membership to create new visitors to the museum. Providing members with new benefits can be another opportunity for the museum to provide interesting benefits to its existing customers and value them. However, the main opportunity is the brand image, without which the museum would not gather the interest needed to increase its memberships (Proctor, 2014).

The use of a marketing campaign is another step which can be utilized for creating the awareness of the community in the museum and building the brand image. The community can be educated on the brand identity of the museum. The putting of the sign outside the building can also work for the brand identity of the museum. With further funding, in the long run, the building can be painted and renovated to make it look more like an arts center and not just a marble block. The parking fees can also be charged higher after the museum has gained some market share. However, this can turn out to be negative for the museum as well. For the implementation of the charged admission, it is important to include free admission in the museum as one of the many “benefits” of the membership to the members. All in all, utilizing the strength of 15000 Collection of the artwork, the museum can work on its weakness of financial losses by exploiting the opportunity of building a new brand image for the museum (Kerin & Peterson, 2013).

References

Alexander, C. (2018). Strategic Marketing Management (9 ed.). Cerebellum Press.

Kerin, R. A., & Peterson, R. A. (2013). Strategic Marketing Problems: Cases and Comments (13 ed.). New York: Pearson.

Proctor, T. (2014). Strategic Marketing: An Introduction. New York: Routledge.