Travelodge Hotel Advertising Promotion - Business Plan Example

Marketing Plan: Travelodge Table of contents Executive Summary 3 Marketing vision 3 Marketing Objectives 3 Situational Analysis 4 i.Strengths 4 ii.Weaknesses 5 iii.Threats 5 iv.Opportunities 6 Porter’s 5 forces Analysis 6 a.Force 1: Degree of Competition 6 b.Force 2: Threat of new entrants 7 c.Force 3: Threat of Substitutes 7 d.Force 4: Buyers’ bargaining power 7 e.Force 5: Supplier’s Power 7 Marketing Strategies 8 i.Market Segmentation 8 ii.Target Markets 9 iii.Positioning 9 Marketing Mix 10 i.Product Strategy 10 ii.Pricing Strategy 10 iii.Place strategy 11 iv.Packaging 11 v.Promotion 11 a.Publicity 11 b.Advertising 12 References 13 Appendix 14 Executive Summary Travelodge is a fast growing budget hotel that is renowned in UK. The hotel has more than 470 hotels and almost 40, 000 rooms in Ireland and Ireland. The hotel aims to increase the number of hotels within Europe to almost 1, 200 with more than 100, 000 rooms by 2020. Currently, Travelodge seems to have taken the title of the best and largest hotel in London. The company also purposes to increase its customer base by 30%. In order to attain this, Travelodge will increase its awareness through advertising and publicity. Additionally, the company will also increase its customer base through its pricing strategy that will push its prices to as low as £5. This report gives a description of the internal and external analysis of Travelodge and the hospitality industry and the marketing strategies that the company will employ to attain its marketing objectives. Marketing vision Travelodge is a three start luxury hotel that seeks to offer its visitors an experience worth remembering through customer service, aesthetics and luxury. Marketing Objectives The primary objectives of Travelodge will entail communications and impact. i. Impact The rationale in creating impact is not only to attend to the needs of the customer but to create an environment in which the customer is willing to be dared to develop a range of reactions towards beauty. With this in mind, the lodge plans to increase the number of visitors by 30%. ii. Communications In addition to the objectives identified under impact, Travelodge will seek to improve its target markets and the underserved market segments through increasing aided and unaided awareness of the lodge. Other objectives include i. To raise the profile of the lodge and the benefits that it delivers to visitors from United Kingdom and beyond, ii. To improve the strengths and effective use of resources of all the messages and stories told by the lodge directed to the different market segments iii. To increase the number of hotels to almost 1, 200 with more than 100, 000 rooms by 2020. Situational Analysis Travelodge is not new to the hotel and hospitality market. The lodge’s reputation is indisputable and its market control is uncontested. As a leading lodge in United Kingdom, Travelodge has an overwhelming marketing environment with opportunities as well as a variety of challenge both internally and externally. i. Strengths Travelodge’s prices are very fair and good, and its employees are always pleasant. The lodge emphasizes on cleanliness, attention to complaints and conditions of its properties and employee attitudes towards guests that ensure that it is always at the top of its competitors. Moreover, the hotel ensures training and improved benefits to its employees as well as cash incentives and weeklong cruises to the Caribbean for top producers that have encouraged employees to make improvements in their service to guests. Travelodge is one among the huge hotel chains in United Kingdom. The lodge has almost 40, 000 rooms making it the second largest hotel chains (Bridge, 2011). Travelodge has a high market value of 25.7% in UK hotel market (Paton, 2014). The lodge capitalizes on its low accommodation rates that make it affordable to almost everyone. Travelodge stresses on a healthy environment for its clients by restricting smoking within its compound. Additionally, the lodge upholds customer confidentiality and privacy when a client gives out confidential and private information such as credit cards and names during mobile and online transactions. In contrast to its competitors, Travelodge has a user-friendly webpage that utilizes innovative webpage technology making it easy for the customers to pay for their services easily. Additionally, Travelodge has a Travelodge Business Account Card that makes it convenient and easy for the business travellers to book rooms. ii. Weaknesses As opposed to other hotels and lodges within United Kingdom, Travelodge does not offer its customers most of the services that would available in a luxury hotel. Travelodge only offers the basic things that a visitor needs such as tea, pillow and towel (Bridge, 2011). Others such as iron box, toiletries and biscuits are not offered and a client may have to dig deeper into his or her pocket to get them. iii. Threats The other budget hotels and lodges within United Kingdom have more facilities and offer additional services. Therefore, since their prices are relatively low, customers may find the other hotels better than Travelodge. The global economy, leave alone United Kingdom, seems to be headed for growth and this will offer more income to the clients. However, for the tourism sector, the level of income determines the overall stay and the form of accommodation to take. In this case, this implies that clients with a high income will opt for a luxurious stay in a high-end hotel such as the Hilton. Additionally, the increase in wage rate by 15% by the government is set to increase the costs of production and operation and impede the strategy to offer competitive prices to customers (Travelodge, 2015). iv. Opportunities The primary opportunity available to Travelodge is the growing world economy and globalization that can allow the company to expand its operations outside United Kingdom and Ireland. Additionally, the UK government has provided a favourable environment for the hospitality and tourism sector to thrive. This offers Travelodge an opportunity to thrive and expand operations to all cities and towns in United Kingdom. Additionally, the increasing costs of living may force people to prefer going to budget hotels as they seek value for money. These are social changes that will offer Travelodge an opportunity for growth and expansion. Porter’s 5 forces Analysis The Porter’s five forces were developed to offer a framework for the assessment of the industry and formulation of marketing strategies (See appendix 1). a. Force 1: Degree of Competition The degree of competition assists in identifying the degree to which value generated with the industry is debauched through head to head rivalry. In this case, the degree of competitiveness if high since United Kingdom is home to the busiest airport in the World, the Heathrow, and accommodates more than 50 hotel brands. Among these, there are 20 three star hotels within London, which offer similar services and even better services than Travelodge at an almost similar price. Premier Inn is one of Travelodges competitors that offer more facilities, services and rooms (Bridge, 2011). However, Travelodge’s low price strategy gives it a competitive edge over its competitors. b. Force 2: Threat of new entrants In an industry, the existing competitors exert their influence on the average industry productivity. Therefore, the level of profitability is bound to decrease if new firms enter into the industry. However, unlike other industries, hospitality and hotel industry is least affected by new entrants as brand reputation plays a huge role (Travelodge, 2011). Travelodge uses the brand reputation that it has created over the years to retain its customers and attract new ones. Economies of scale also play a significant role in the industry. A new entrant cannot benefit from economies of scale because of its limited operations. The hospitality industry requires intensive capital and this makes entry almost impossible. c. Force 3: Threat of Substitutes The primary substitutes available for the hospitality industry are recreational vehicles and camping for the clients and tourists and corporate guest houses for the corporate travellers. These are cheaper substitutes compared to the hotels and lodges. However, hotels offer more facilities and services making the clients acquire value for their money. However, Travelodge offers its high standard services at a low price, making the threat of substitutes low. d. Force 4: Buyers’ bargaining power In as much as Travelodge offers its services at a low price, the hotel faces a low buying power. Travelodge has a small customer base and the loss of one customer can drive the buying power down. e. Force 5: Supplier’s Power Because of the low purchasing power of its customers, the supplier power is low. Suppliers of Travelodge include real estate, infrastructure, and customer and labour suppliers. The labour suppliers are many thus face stiff competition among themselves making their supplier power modest. Notably, the hospitality industry in United Kingdom has a high number of suppliers. Therefore, each of the suppliers has little influence in the industry. However, there are few powerful suppliers that are critical in the market. Marketing Strategies i. Market Segmentation It is ordinary for a market to consist of segments due to the numerous mind-sets predominant among distinct groups of customers. Notably, market segmentation is significant because it allows the marketer to identify the distinct variables such as pricing, public relations and advertising that affect the customers. Travelodge employs a multi-stage segmentation plan (Travelodge, 2015). There are numerous ways on which a company can segment its market. Travelodge has segmented its markets geographically, behaviourally and demographically. Geographic segmentation engrosses separating customers according to their geographical positions. Travelodge’s geographical segregation strategy primarily centres on the local penchants within United Kingdom. This means that the company has its hotels in numerous regions within United Kingdom (Travelodge, 2015). Travelodge also segments its customers demographically through numerous variables such as age, gender, life-cycle stage, lifestyle, income and social class. In this regard, Travelodge target customers in this segment include business class travellers, middle aged professionals, families, middle income business travellers, middle income family travellers and young married couples majorly interested in eco and pocket friendly vacations (Travelodge, 2015). Additionally, Travelodge will segment its market behaviourally by considering how frequent they visit the hotel and how loyal they are to the hotel. The stiff competition in the hospitality industry has triggered the hotel brands top shift their concentration to the frequent guests. ii. Target Markets Every organization requires a target market (Wood, 2013). The target market consists of a group of customers whom marketing and promotional strategies are aimed at (Wood, 2013). Travelodge has adopted a multi-segment targeting that focuses on more than one target markets. Travelodge believes that all clients need a base service level and that they all differ in their willingness to pay for luxury and comfort (Travelodge, 2015). The primary target markets for Travelodge include business professional travellers, families, couples, seasoned travellers, middle class singles and couples interested in eco and pocket friendly vacations. The hotel will also target the frequent visitors. Travelodge will target the frequent guests through a frequent-guest program that will offer discounts to them, giving them a reason to be loyal to the hotel brand. Travelodge will set up cumulative reward points, which are redeemable for a service (Travelodge, 2015). Travelodge will also target the business travellers, families and couples through the low prices. Every person wants to gain value for money and Travelodge will capitalize on its low prices and good services. iii. Positioning Positioning is a technique employed by the marketer in order to create a brand that individuals can identify with (Wood, 2013). This involves the position that a service or product holds in the market. This may be a perception held by people about a service or a brand. Travelodge will position its products through strong and attractive advertising. Travelodge will run promotional campaigns at the start of the peak season in order to create awareness among the customers and prospective customers. Travelodge will also sponsor some sports events, a move that will ensure the brand is visible to spectators. Travelodge will also come up with a memorable slogan. Additionally, the discounts and the reward points will assist in retaining the current customers and attracting new customers. Marketing Mix i. Product Strategy The predominant product offered by Travelodge is hotel accommodation to its customers in more than 10, 000 rooms across UK and Ireland. Travelodge offers accommodation to the business travellers who want to be close to the business hubs and families and couples who desire short vacations and short stay breaks while on long journeys (Travelodge, 2015). Travelodge also offers an amalgamation of outstanding facilities and value for money. These facilities include a swimming pool, room phone, a cable TV carpeted floors and coffee and tea pots. Travelodge offers family and en-suite rooms. The family rooms have two rooms that can accommodate two adults and two children (Travelodge, 2015). The rooms are suited with a satellite television, coffee and tea making facilities, a newspaper and a luxurious bed. The business traveller’s rooms are suited will almost all facilities. This allows the business customers to wake up rejuvenated and ready for work. Travelodge plans to offer conference facilities for business meetings. ii. Pricing Strategy Since its establishment, Travelodge has been renowned for its low product and service prices (Travelodge, 2015). Travelodge slashed its prices as compared to its rivals in order to encourage more customers to use Travelodge as their preferred destination. This makes Travelodge customers get value for their money for with cheap prices they can get a luxurious stay. Travelodge plans to offer its rooms at a cheaper price of £25 or even less (Travelodge, 2015). Additionally, Travelodge plans to reward the customers that book their rooms a month earlier with lower room rates of £20 across its hotels (Paton, 2014). Travelodge also plans to offer the lowest room rates to anyone who books online. This is because the company anticipates low costs of production if the customers book earlier. Travelodge also plans to offer one hundred thousand rooms for £5 each. iii. Place strategy Travelodge has operations in UK and Ireland with more than 400 hotels with 40, 000 rooms. Travelodge plans to extend its operations beyond UK and Ireland to other cities and towns in Europe and later in America (Travelodge, 2015). Travelodge plans to extend operations to other cities through franchises. iv. Packaging Since the impression that a company creates is essential, Travelodge creates an outstanding first impression through the ambience at the reception and in the rooms. Travelodge hotels are colourful with decorations and portraits on the wall. Additionally, the employees are amicable and approachable (Travelodge, 2015). Additionally, the employees are always smartly dressed. The brochures have numerous pictures that depict some of the rooms with wonderful testimonials of few clients who visited the hotel. v. Promotion Travelodge promotes its products through advertising and publicity. a. Publicity The overall objective of public relations will be to heighten the frequency, quality and the number of media mentions (Hoffman & Bateson, 2011) of Travelodge in United Kingdom and the global media, leading to a varied blend of articles, stories and features in consumer magazines, newspapers, broadcast news programs, radio talk shows and online sources. In order to accomplish these goals, various publicity programs will be designed to elicit positive media coverage (Hoffman & Bateson, 2011). These include aggressive media relations within Ireland and UK Media market, and across and creative publicity programs to provoke positive media coverage of Travelodge. b. Advertising Travelodge plans to use print, audio and visual advertising and the internet. i. Print Advertising Print advertising will involve the use of billboards that will be located in certain places in UK and Ireland, particularly within London. Print advertising will also be used in magazines and newspapers where a full page colour advert will be displayed. Both the newspaper and magazine adverts will be similar to the billboard since they will all have the same images. The primary newspapers to be used will include Evening Express, City Life, and the Press and Journal Newspapers. ii. Audio and Visual Travelodge has over the past years used visual and audio adverts. This made it the first budget hotel to appear on television within the nation and increased its awareness by 70% (Hoffman & Bateson, 2011). Travelodge plans to increase awareness by 15% to 85%. The local radio stations to be used will be the NorthSound 1, Northsound 2, North East Community Radio, Slick FM and Stations House Media Unit. On the other hand, Travelodge will use Grampian Television, STV and BBC. iii. Online and Web plan Travelodge recognizes that its presence on the internet is an opening to spread its market reach in a way that is coherent with its mission. Travelodge has a website that offers its clients numerous features (Travelodge, 2015). Currently, Travelodge webpage allows the clients to book their stay and pay for their rooms. In order to support this, the company has a reservation sales centre with more than 250 employees on the standby waiting to pick calls and sell the rooms (Travelodge, 2015). So far the team sells up to 2 million rooms annually. This tea offers unified online accessibility and booking facilities. Currently, Travelodge is a crucial edge player in e-commerce market in UK as it offers inclusive packages. The hotel’s internet service allows it to develop personalized associations with clients (Travelodge, 2015). Additionally, its wide customer database allows the company to offer personalized information when customers are booking and to make promotional offers to the clients. The company’s website allows the customers to select accommodation and to select their current location from a drop down list and the lodge required. The website offers the clients a look into the rooms as there are numerous pictures that depict inside the rooms and the services and facilities offered (Travelodge, 2015). Travelodge will design its website for the visitors to set a virtual tour through the hotels and allow the visitors to get answers to all their questions. Visitors will also allow the customers to create their visitor accounts where a confirmation email will be sent to their respective email addresses. This will also allow the customers to interact with Travelodge personnel who will answer their questions. This is to show the visitors that Travelodge cares for them and offers personalised services to every individual. This will also cut down on the number of reservations cancelled. To add onto this, Travelodge will set up a company blog referred as the “Astounding luxury” that will engross contents from episodic email newsletter about the definition of hospitality and luxury, far beyond particular tales on Travelodge. This blog will also offer testimonials from customers on their experiences with Travelodge. This blog will also offer a platform where visitors can view the management team. The blog will be updated daily with distinct customer concerns. References Bridge, S., (2011). Battle of budget beds: Travelodge branded as childish by angry rival Premier Inn. [online] Available at:< http://www.dailymail.co.uk/money/article-1351715/Battle-budget-beds-Travelodge-branded-childish-angry-rival-Premier-Inn.html> Hoffman, K. D., & Bateson, J. E. (2011). Services marketing: Concepts, strategies, & cases. Mason, Ohio: South-Western Cengage Learning. Paton, N. (2014, March). Travelodge adopts low-cost price strategy. Retrieved April 12, 2015, from https://www.thecaterer.com/articles/52331/travelodge-adopts-low-cost-price-strategy Travelodge. (2015, January). Travelodge | Cheap hotels throughout the UK & Ireland. Retrieved April 12, 2015, from http://www.travelodge.co.uk/ Wood, M. B. (2013). Marketing Plan Handbook: Pearson New International Edition 5 ed. Harlow: Pearson Education Limited. Appendix Appendix 1 Read More