Swiss Serenity Hotel Marketing Management - Thesis Example

Running head: Marketing Plan Marketing Plan of Swiss Serenity Hotel Name Institution Date (3777 words) Executive Summary Swiss Serenity located in Zurich city, Switzerland represents Pizza Hut as the first five star hotel in the highly esteemed city, offering 125exquisite rooms. Swiss Serenity is synonymous with the extremely high quality and personal service offered to its customers in a serene luxurious setting as the name suggests. We believe in quality and making each customer feel like a true important guest. We will maximize shareholder’s value and will honor the brand values of quality service and utmost customer satisfaction. Swiss Serenity has 3restaurants, 5spacious lounges, 10conference rooms, 4fully stocked bars, a casino, poolside beverage services, grills, among other facilities that perfectly match its definition as a five star hotel. Swiss Serenity targets upper class business travelers, dignitaries, families, airline crews, frequent individual travelers (FIT) as well as domestic and international tourists. The founders of Swiss Serenity have a high level of excellence and experience in the service industry due to the successful operations and maintenance of over 10,000stores worldwide. Foundation for this Swiss Serenity plan has been built on primary as well as secondary research enabled by involving high-quality expertise. An interplay of these factors is what the marketing strategies of Swiss Serenity have been built on. Interviews and discussions were held in a quorum that includes experts as well as individuals that have succeeded in beginning similar businesses. Such meetings enabled the development of proforma data, the reviewing of market potential and the determination of the market situation in Zurich. As a result, the chances of success for Swiss Serenity are highly assured. Table of Contents Situation Analysis 4 Market needs 4 The Market 5 Market Demographics 5 Zurich Hotel Industry trends 6 Current Zurich Hotel market trends 6 Market Growth 7 Target market 7 Macro environment 8 Mission 9 Marketing Strategy 11 Critical Issues 11 Branding and Messaging 11 Marketing Mix 12 There 4 P’s of Marketing Mix 12 Position 12 Distribution Strategy 12 Product strategy 13 Pricing Strategy 13 Promotion strategy 13 The 6 M’s in marketing mix 14 Mission: 14 Finances and Risks 15 Risks 17 References 20 Situation Analysis The founders of Swiss Serenity are the owners and managers of over 10,000 restaurants in about 146countries in the world. The founders are under the highly esteemed franchise chain Pizza Hut. The group falls under the ownership of Yum!Brands that holds a total asset bank of $7.15 billion. Pizza hut franchise operates on constant profits annually and is therefore ranked as one of the major revenue earners for the Yum!Brands group. The Pizza hut franchise focuses on establishing itself in inner accessible city locations and it aims at serving clients of all ages. Pizza Hut is known for the best pizza dishes in the world and venturing into the hotel industry will be its first true show of versatility. It had once established itself as 6 restaurants in Switzerland but however closed as it was running on losses. Its undying spirit of success however drives Pizza Hut to penetrate the Switzerland market a second time. This time round, it accommodates its renowned restaurant in the Swiss Serenity Hotel. Market needs Swiss Serenity Hotel will offer the superb quality services that Pizza Hut is popular for. It aims at providing its customers with benefits and value that rests above the rates and standards of its facilities. It seeks to provide each of its guests with personal service that is of exemplary standards that meets the levels of recognition that millions have relied on. The environment created by Swiss Serenity is one which accommodates clients of various characteristics laying emphasis on delivering a luxurious and relaxed feel. This environment is one which is personalized, unlike those found with most of our competitors. Swiss Serenity will operate in a city that is known to be a frequently visited location and it is vital for the hotel to be at close range with each of its customers. The Market Swiss Serenity is a five star hotel, comprising 125 guestrooms. It does not only specialize in serving corporate clients but it also specializes on travelling families and individuals that frequent Zurich. The key clients to our hotel are upper class clients that originate from the domestic and international market segments. Swiss Serenity is strategically positioned next to the main airport area in Switzerland and it also enjoys the close proximity to shopping malls, fine Switzerland restaurants and museums to the convenience of its customers. It is also located in a city that is rich in culture and boasts of remarkable pieces of architecture. The life of Zurich is one of high quality, receiving great scores for leisure, housing, work and safety. Key to the success of our hotel is the high level of worldwide customer loyalty enjoyed by the Pizza Hut brand. Repeat business each year will also allow us to project growing profits in the first 5years of operations. We offer services that range from conference rooms to recreational services such as lounges, mini-bars, a pool and a casino to ensure that most needs of our customers are met. The hotel is equipped with adequate staff to allow close relationships to be formed with each customer, adding the value of the hotel in relation to other competitive hotels in the close and far vicinity. Market Demographics Market Geographics: Zurich is the Switzerland’s largest city and its population is 372,047. Market Demographics: The Zurich community consists of primarily households that have two to around four children, either living at home or elsewhere. Market Psychographics and behaviour: Zurich accommodates plenty of international organizations and its service industry is one that employs almost four fifths in proportion of all workers. Great investment in education and languages results in the birth of multilingual diligent employees, exactly what Swiss Serenity needs. There is a relatively strong aspect of relating as a community as well as great awareness when it comes to caring for the environment. Zurich Hotel Industry trends Favorable business laws, modern infrastructures, constant production of agricultural products, nice sceneries and artworks are factors boosting hospitality industry in Zurich. It is one of the fast growing cities showing a rise of income and tax revenues in hotel industries despite the effects of recession. Zurich has many hotels targeting different nationalities given the cosmopolitan and multicultural community in the district. The Zurich hotel industry enjoys a strong market due to its numerous tourist attraction sites, museums and ownership of one of the best travel systems in the world. Zurich has a wide variety of 4star hotels spread across the district, and Swiss Serenity will be the first 5 star hotel in the area. Current Zurich Hotel market trends Zurich is a popular destination for corporate guests from both international and domestic markets. Tourists that visit Switzerland for their first time also frequent the attractive and rich city of Zurich. The number of people visiting the existing hotels is almost the same. This shows that none of the hotels offers anything unique to be a clear leader. Across the top three hotels the base of uncommitted customers is significant, showing a weak brand loyalty and almost 50% of people say that they don’t have a preferred hotel they can visit. Conclusion: across all hotels, the identity and offering are almost the same. Zurich market characterized by it lack of differentiation, customer satisfaction and good lodging facilities offer a potential strategic and commercial opportunity for launching a new hotel with a strong identity and unique services. Market Growth Growth rate of the markets that Swiss Serenity targets has been stable and steady in the past 5years. The economic rate of Switzerland reached -0.3% in 2003 due to world events but the hotel industry market has recovered quite remarkably. Target market Swiss Serenity’s targets include people visiting Zurich from various airports. This includes people traveling out of the country as well as those coming in. Attracting this segment is improved by liaising with tour operators. Another target is the airline crews and layovers (airline customers whose travel has been interrupted). Airlines refer their crew to hotels with better service. Swiss serenity is committed to offering superb services that cannot be compared all over Zurich. Sometimes flights are cancelled and therefore there is need to have a hotel that can accommodate a large number of clients and offer satisfying services within a short spun of time, a need that Swiss Serenity can adequately satisfy. Another target is the long distance bus drivers driving to and from Netherlands, Germany, France or Italy. The target market also includes business travelers and frequent individual travelers (FIT), mostly from Europe, Asia and United states. They need to be offered with services including travelling from and to the airport and other tourist attraction sites and shuttle services offered by Swiss Serenity very well handles this. Macro environment The external issues affecting Swiss Serenity include: Political: a politically stable environment that is conducive for businesses to thrive. Economic: business and leisure travel was affected by the recent world recession but the levels have been increasing in the last 5 years. Social: The preference for business and leisure travel that is cost effective has made hotel guests seek more value and benefit for their money, a point at which the added value as well as the differentiation strategy of Swiss Serenity comes to play. Technological: automated check in systems and new business facilities in the market call for one’s hotel to step up in terms of investment so as to sufficiently meet the needs of business travelers. Mission It is the dedication of Swiss Serenity to offer extremely high quality services to its guests above anything else. We believe in value and making each customer feel like a true important guest. We will maximize shareholder’s value and will honor the brand values of quality service and utmost customer satisfaction. Our personnel will be constantly encouraged to be loyal and effective. PESTLE SWOT Analysis PESTLE STRENGTH WEAKNESS Political Stable situation Collaboration to build competencies across the borders Systems of legal rights and government decision making are often unclear, ad-hoc and fragmented. It lacks certain openness and supporting institutions. Economical The close locality of Zurich airport creates and added advantage Low inflation in the country allowing people to spend for leisure. Rising wages Cost of sourcing fresh farm produce Social 80% population is expatriate with a strong need of domestic tourism and relaxation. Reverse migration with economic downturn and high cost of living in a hotel in Zurich Technological Computer programs for financial recordkeeping up –to –date Digitized security and door locks High cost of subscription to broadband and telecom services Legal Reduction of regulatory barriers : moving Zurich economies towards hospitality based economies – hotels being targeted as a priority sector High rates of Liquors licenses High insurance rates Building permits prior to any construction Opportunities Threats Unsatisfying services across the hotels in Zurich, weak branding activities, a big untapped potential in terms of services and promotions activities – Swiss Serenity with customer satisfaction can shift customers preference to a new hotel Strategic marketing ideas of offering services that will lead to referrals. Technical efficiency: fully equipped rooms and dining rooms to offer quality services Innovation and services lacking in the Zurich hotel market Intense competition from the indigenous hotels Marketing Strategy Our market strategy aims at communicating the uniqueness of our quality services to potential guests. It aims at directing the focus of our customers to the value and quality for their money and not merely on the costs that are incurred by their stay. Consequently, our brand values are popularized, close relationships are formed and the specific needs of guests are effectively identified. New market targets will also be sought with time. This is in line with our goals of growth and differentiation. Critical Issues How to continue differentiating our services from those of our competitors and providing customers with added value. Developing higher levels of customer loyalty in the competitive market we operate in. Attracting new market sectors to enhance growth. To be regarded as social responsible in the Zurich community. Branding and Messaging Pizza Hut holds worldwide recognition as providers of pizzas of the best quality. In the same way, Swiss serenity aims at being known for its extremely high quality and personal services offered in a serene luxurious setting. The brand will be communicated on brochures printed on high quality material with excellent photographs to ensure that customers have a taste of the ‘high quality’ that Swiss Serenity offers. Marketing Mix Generally, the environment is suitable for Swiss Serenity Hotel. The forces that drive market demand, mainly economic, location and technological, are strong and positive, with more people yearning to tour Zurich and enjoy the hospitable Swiss culture. Most of them are used to staying in five star hotels whilst on holiday. The fact that there are only four star hotels gives the Swiss Serenity a competitive advantage over the other service providers in the vicinity. On the contrary, there is competition, particularly from the Allegro Hotel, Airotel Rumlang and other established hotels operating in the region. This is challenging because of market inertia advantage of the existing service providers. The goodwill built is indeed a gigantic tower to bring down and as such it will take the Swiss Serenity Hotel a little while for it to become established in the market There 4 P’s of Marketing Mix Position For the Zurich community, Swiss Serenity Hotel will pose as a new, beautifully landscaped, serene, nature-filled, unique atmosphere hotel; the only one of its kind offering five-star classic service in the market niche. Professional yet personalized service offered will be one with a touch of the rich Swiss hospitality. Business services offered include room phones which are Internet enabled, automated telephone answering for every room and available meeting space (cabaret room and lounge area). Swiss Serenity Hotel will aim at attracting business guests and their partners who need to hold planning or strategy sessions or conferences away from the office in a new and comfortable surrounding. Distribution Strategy The Swiss Serenity hotel management shall embark on an outreach program to reach the greatest number of potential guests. Swiss Serenity Hotel will ensure the presence of one or two front office members on 24/7 basis so as to ensure the questions asked by guests are timely answered and their needs effectively satisfied. Such flexibility is what attracts most business travelers. Clients will be able to contact Swiss Serenity Hotel by telephone, fax, face book and e-mail. This is in the quest to keep in touch with trends and technology. Product strategy Using the Kotler’s Product model (check exhibit 1), there are assorted products that the hotel shall use to ensure provision of the satisfying goods and services to the target persons. The hotel should be aimed at providing the highest quality service in the industry since most of the services like restaurants, teleconferencing, bed and breakfast, are already being offered by the companies already in the market. Pricing Strategy Rooms per night fees will be developed with the current market situation in consideration. Peak and off-peak tourist escalation will determine seasonal rates. For business gatherings and other functions attracting large groups, pricing will be discounted in accordance with reserved rooms they desire. Grill delicacies and lounge pricings are noted as extra costs to an individual. Promotion strategy Various market segments call for different promotion strategies. Key segments in the industry are layovers, business travelers, families and the airline crew. This shall be enhanced by special quality service that is personalized when offered to individual guests. The management will also design very unique Zurich-made T-shirts which have the name and company logo imprinted thereon and given to any customer who spends a certain number of nights in the flamboyant Swiss Serenity Hotel. Besides cost-effective campaign-focus on a guest reward program, publicity, direct marketing as well as advertising will go beyond the proposal stage into enactment. The 6 M’s in marketing mix Mission: To impact the hotel industry by providing extremely high-quality service Means: The resources to capacitate this mission will come from the founders, credit from suppliers as well as loans from banks. Message: Critical choice of the advertisement whereby the services promised in the message are the same offered in real-time. Offering some free outside catering gives the potential customers the chance to know the products well. Moment: The best time to approach the prospective customers prior to the start of the project. This calls for use of media such as magazines, radio and television to sell the good name of the hotel. The best time to approach international tourists is during their check-in and festive seasons like Christmas. Media: The best media to pass this information is television because of the audio-visual impact. Besides television as a means of passing the information reaches many people, an advertisement missed will be captured at another time. Measurement: The promotion will be a success if there are tangible results such as improved stock turnover, increased applications or booking of reservation. Decline in the service delivery of the arch rivals can also be a yardstick to vet success of the promotion. Finances and Risks The major expenses incurred in Swizz Serenity are costs incurred due to labor, food and guest room facilities or amenities. Swiss Serenity hotel is one that focuses on exceptional quality for its services as its competitive advantage. This is mainly because as a hotel, high-quality service is one of the most valuable and important assets it can have. Below is a summary of the funds needed for setting up the first phase of the hotel: Project Funding Summary Construction and Cost on improvements $26,206,000 Fixtures, furniture and build-out $411,056 Development Start-up Expenses $123,000 Working Capital (5 months) $53,798 Total $26,793,034 Construction costs are high mainly because the quality of the hotel’s structure, design and facilities has to meet the requirements of a five-star hotel. The hotel also incurs additional expenses due to the existence and operations of the three restaurants: for the excellently cooked indigenous foods, for wine and dine and Pizza Hut offered open to casual customers as well. 5 Spacious lounges, 10 conference rooms, 4 fully stocked bars, a large pool and a casino will also be included. The following list clarifies and highlights the development costs that the hotel anticipates: Liquor License $72,000 Architect Fees $8,500 Accounting $1,500 Marketing, PR & Advertising $13,000 Engineering & Permitting $6,000 Office Expense $3,000 Founders Draw (Gen. Contractor) $16,000 Legal $3,000 Total $123,000 Funds for bringing up the hotel will constitute equity (20%) and a five-year mortgage with a 3% annual rate (80%). A standard depreciation of 5% is estimated. Development amounts of the second phase will be sought after at a future date according to the expansion needs determined at that period of time. Outsourcing of laundry and cleaning as well as the catering services for the indigenous restaurant will allow the reduction of costs incurred by the Swiss Serenity. Other luxury expenses include extra-comfort mattresses, temperature regulation, free internet access, banquets, magazines, free snacks and wine, excellent customer relations all in a bid to make each customer feel like a true special guest. On the revenue side, the major profit drivers are the occupancy rate (rooms sold in relation to rooms available) and the average revenue earned from each room. With the industry benchmarks as our basis, the occupancy rate is 72% (ranging between 78-65% depending on the season). Occupants are 42% groups (lowest revenue), 31% business, 21% individual tourists (highest revenue) and 6% others. The average room revenue resulted to $10,735,129 each year. Other revenue sources include commissions from credit cards, conference rooms, casino returns, mini-bar profits, parking fees among others. Projected profits before tax are estimated to be $5,336,950 which is about 20% annual return of the $26.8 million invested. Some of the financial assumptions include the fact that all revenues earned will rise by 5% annually and all variable employee costs and fixed cost rise by 2.5% annually. There is also the amortization of development start-up costs over a period of 5years. When it comes to the revenue growth of Pizza Hut, the rise of a Swiss Serenity Hotel leads to increased monetary returns in the long-run. The wide-spread recognition of the Pizza Hut brand paves way for the recognition and success of Swiss Serenity Hotel as well. Visitors to the Swiss Serenity will go to the hotel with increased confidence and reduced doubts and uncertainties due to familiarity with quality of the brand. Risks Venturing into the hotel industry is accompanied with numerous risks. The first of these risks includes the financial risk. This is the risk that Swiss serenity will have no more money at hand for its operations or the money invested into the hotel will be mismanaged. This could arise if Swiss Serenity has established poor and ineffective investment policies. The success of the investment policies put in place can only be evident when the hotel has completely been set up and profits are realized. The lending policies we have taken part in may also turn out to be bad and investors may pull out of the project, heightening this risk. Another risk facing Swiss Serenity is market risk. This may arise when the market trends of the hotel industry develop differently from the manner that was anticipated. Swiss Serenity may expect customers to respond to its services by a certain time after the opening of the hotel, but the customers may fail to do so. The hotel may run out of its money or even operate on growing losses because customers in whom the hotel saw potential in fail to turn up. Competitive risk is also incurred as there are many other existing hotels in Zürich that are largely successful with a mature goodwill. The risk at hand is the fact that competitors to Swiss Serenity are already a step ahead because they have the competitive advantage of customer loyalty. There is also the possibility of your competitors lowering their rates so as to threaten your entry into the industry. This may lead to great losses and it may as well frustrate the hotel in terms of establishing itself in this new market. Swiss Serenity however has put in place measures to counter these risks such as sound insurance policies, extensive research and expertise from risk management firms already on board. Exhibit1:Product.Strategy References McDonald’s Adventure in the Hotel Industry, TB0109-PDF-ENG.pdf Mplans.com, (http://www.mplans.com/hotel_marketing_plan/situation_analysis_fc.php) Reference for business, Encyclopedia of business, 2nd edition, (file:///C:/DOCUME~1/Admin/LOCALS~1/Temp/Hotel-Resort.ruth.html) Read More