Business Challenges - Report Example

Report Table of Contents Research and Situation Analysis 3 Situational analysis 3 Internal analysis (SWOT) 3 Macro analysis (PESTEL analysis) 5 Microanalysis (Porter Five Forces Analysis) 6 Challenges for Travelodge 7 The structure and size of the market 8 Constructive analysis and creation of proposed marketing strategy 8 Evaluation of current situation with objectives 8 Inclusion of aspects in marketing plan 9 Identification of segmentation, target and positioning approach 10 Market Segmentation 10 Target Marketing 11 Marketing mix (7Ps model) 12 References 15 Research and Situation Analysis This part of the report will conduct situation analysis including business challenges and market size. Situational analysis The situational analysis is a systematic evaluation and identification of existing external and internal elements that can effectively impact the ability of organization. This part of the paper is based on providing situational analysis of Travelodge brand. It includes internal analysis, micro analysis and macro analysis. Internal analysis (SWOT) The internal analysis is referred as process of evaluation and identifying the characteristics of an organization. The selected organization for evaluation of internal analysis is Travelodge hotel chain brand. The internal analysis can be effectively presented by implementation of SWOT analysis. The SWOT analysis is a study of identifying the internal strengths, internal weaknesses, external opportunities and external threats of an organization. Strengths One of the major strengths of Travelodge is affordable room rates. The Travelodge hotel company is the third major hotel chain company and second largest in budget hotel department in the United Kingdom. The introduction of effective Business Account Card by Travelodge Hotel Company offers quick and convenient booking option for business travellers. The Travelodge green program is committed towards the creation of sustainability campaign (Basu, 2012, p.82). This program enables the hotel company to appeal to their environment conscious customers. Furthermore, this sustainability program enables Travelodge Company to create competitive advantage over other competitors in luxury and budget hotel sector. Weaknesses As it is most common with luxury hotel and hospitality industry, the Travelodge Company does not provide varied range of products to the customer. The range of products provided by the company does not create fancy in perspective of aesthetics and decoration. The Travelodge Company does not provide concierge service, porter service and room service. The wide range of customer services and facilities are limited. Opportunity The Travelodge can join with new partnerships to enhance their business reputation. The company is only concentrated on United Kingdom and Ireland. This can make the company to miss out the potential customers in the European market. Therefore, they have the opportunity to expand their market internationally. Threats The positive economic growth in future can increase customers with high income level. It is believed that the accommodation for tourists is vital with their high disposable income and general stay. Moreover, this enables tourists to opt for stay at a higher end hotel company such as Hilton Hotels and Resorts. Furthermore, the Travelodge do not show any future plan towards expanding its business portfolio on international shores (Kotler, 2008, p.89). For example, Premier Inn is continuing to expand their business internationally in India and Middle East. Macro analysis (PESTEL analysis) The PESTEL analysis is an effective tool for evaluation of macro analysis. This part of the paper is based on assessing the market of Travelodge Company by the help of PESTEL analysis. Political factors In the hotel and hospitality industry, the employees are more demanding towards enhancement in production information, consumer protection and working conditions. The current trade unions and legislation states that standard of demanding improvement has to be high. The Travelodge Company provides good working conditions for employees. This means that employees are reliable towards the company and leads to low labour turnover. Economic factors In UK and most of Europe, the slow economic progress has augmented the availability of quality budget hotel for tourists. The accommodation has become elastic demand and income purchasing power has weakened. These factors would prove beneficial for Travelodge Company, as most of the tourists would prefer budget hotels. Social factors According to the guardian, the United Kingdom is an ageing population. These ageing consumers expect more from low prices and create new hype. The Travelodge Company would expect more personal and valued facility. Technological factors The advancement of technology has increased the level of security systems. The use of CCTV camera, burglar alarms and fire alarms enables to protect customer and staffs. Furthermore, it has also helped hotel industry like Travelodge to introduce extra protection on online traction through credit and debit cards. Legal factors The company has to look after on living and minimum wages for staffs. Holiday pay, pensions and sick pay are others things that are needed to be considered. Environmental factors The use of air conditioners in hotels has contributed towards carbon emission and air pollution. In today’s society, one of the serious dilemmas that are required to be addressed is global warming. This makes important for Travelodge to present their industry as environment friendly. This can be achieved by implementation of environmental friendly alternatives and conservative on energy consumption (Egan, 2015, p.48). The usage of recycled materials can be one of the primary solutions. Micro analysis (Porter Five Forces Analysis) The micro analysis can be evaluated by implementation of Porter five forces. This framework allows assessing the level of competition in hotel and hospitality industry. The threat of new entry In the hospitality industry, the threat of new entrants is low. The Travelodge Company uses its brand name to retain old customers and attract new customers. The degree of industry rivalry The intensity of rivalry within the hotel and hospitality industry is very high. The largest competitor of Travelodge Company is Premier inn. The bargaining power of buyers The bargaining power of buyers is low. The Travelodge Company has large number of customers. The loss of any single customer would not create any impact on the company (Fill, 2009, p.98). The threat of substitutes In hospitality industry, the threat of substitute is low. The prices of man substitutes such as recreational vehicles and camping is high. Therefore, the cost of switching is very minimal. The bargaining power of suppliers The bargaining power of suppliers is low. This is because the main customer attractiveness of the company is cheap accommodation. Challenges for Travelodge Tactical pricing choices. Sustainability in hospitality industry. Changes in business environment. Small team handling rapid growth of business portfolio. The standard operating processes are outmoded. The structure and size of the market The hospitality sector in United Kingdom has 12 different sectors like gambling, memberships club, hostels, holiday parks, self-catering; visitor attractions, tourist services, travel services, events, hospitality services, pubs and night clubs. In the year 2006, the total turnover in hospitality industry is 65 billion pound. In United Kingdom, the third major hotel chain and second largest discounted hotel chain brand is Travelodge (Keller, 2008, p.92). The innovative strategies of the company makes them set apart from other competitors in the UK. Constructive analysis and creation of proposed marketing strategy This part of the report will propose a marketing plan considering the following factors. Evaluation of current situation with objectives In the e-commerce market, the Travelodge Company is a leading player and offer effective internet service experience for customer to enhance customer relationships and loyalty. There are some opportunities that can be focused to grow revenue share of Travelodge Company. The prime objectives of the company are to create tactical pricing choices and maintain sustainability. Furthermore, Travelodge Company wants to maximize their opportunities for creating seamless booking services and online ticket accessibility for customers. It is vital for the company to keep hold of current client base customer by creating affordable and appropriate priced rooms. The application of effective revenue management strategy can benefit Travelodge Company to establish effective cost breakdowns, improved merchandising on food and beverages, offering incentives and up-sell suite improvements. The use of revenue management technique can be maximized by implementation of reservation systems and STR report. In case of STR report, the report based on 28 days basis is evaluated to know whether the company is outperforming. If the company is outperforming then it is crucial to notify what steps are required to strengthen the position of the company. One of the steps that can be introduced by the Travelodge Company is cost effective marketing strategy. This enables the company to experiment and be creative with different rate packages and plans enhance market share. Inclusion of aspects in marketing plan The prime purpose of implementation of effective marketing plan is to develop close working relationships with customers, brand values and continued growth. Several aspects of marketing plan include tactical programs, sales promotion model, marketing strategy, situation analysis, budget control, strategic planning and value proposition. The value proposition is providing best personalized service for customer. Some of business essentials of the customers are internet connection, nice desk, wireless rooms and meeting rooms. The implementation of effective sales promotional tool is vital for extending revenue options for Travelodge Company. The use of survey is one of the beneficial sales promotional tools that would enable Travelodge Company to know specific needs, information and demands of customers. The company can introduce new offers and advance purchase offers to the customers. The pricing strategy adopted by the Travelodge Company providing cheap deals to the customer acts as beneficial for revenue generation. The Travelodge Company can drive their growth in hotel and hospitality industry by introducing new different brands. The advertising plays critical role towards the promotion of hotel industry. The company must focus on mobile marketing channels to promote their brand (Proctor, 2014, p.42). The Travelodge Company must create new mobile application for connect with customer easily. The creation of new mobile application can make easier and efficient for booking any rooms. The increased sales of mobile devices are becoming perfect replacement options notebook computers and desktop. The future of marketing activities and advertising lies on mobile marketing. Therefore, it is crucial for Travelodge Company to recognize the importance of communicating with customer on social networking sites and mobile application. Furthermore, this would benefit the company to receive real time feedbacks from customer. These are certain aspects of marketing plan than is required to be effectively implemented to maintain sustainability. Identification of segmentation, target and positioning approach The STP method is an important theory that demonstrates how company competes in the certain market environment and validates to link between the complete market segments. Market Segmentation This part of the report will conduct different types of market segmentation analysis. Demographics The demographic segmentation is done by focusing on lifestyle, gender, age and occupation. The age of customers in hospitality industry can be above 18 years. In perspective of gender, it can be both male and female (Pringle, 2008, p.12). The occupation of these travellers can be embassy, government and corporate employees. The lifestyle of the people has become fast and independent. This makes importance of introduction of effective on-line reservation system for customers. Psychographics The psychographics segment is categorized by focusing on social interest, values and activities of customers. The consumer activities and values are more concerned about price, comfort, facilities, good service, efficiency, location and security (Peter and Olson, 2005, p.41). The local customers are budget conscious and want to expect good service and room from the Travelodge Company. Behavioural The behavioural segment includes occasion, loyalty, usage, benefits and features. The Travelodge Company provides two market segments for hotel accommodation such as business customers and family customers. For business people in United Kingdom, the company offers access to fax machine, telephone and in-room facilities. The sophisticated internet site developed by Travelodge Company is to offer customers benefits and features on discounted rooms and on-line room booking (Panda, 2009, p.88). The company also offers inclusive internet packages with seamless booking facilities to create personalized relationships. Geographical The geographical segment includes climate, size, region and population. In United Kingdom, the Travelodge Company has more than 25 percentage of market share in hotel and hospitality industry. Some of the global climatic concerns that are related to the hospitality industry are acid rain, pollution global warming and climate change (Mohr, 2010, p.18). Target Marketing After segmentation approach it is vital to choose targets in hotel and hospitality industry. Multi-segment targeting strategy The multi-segment targeting approach is regarded as crucial for selecting target market in hotel and hospitality industry. This approach can be critical for Travelodge Company to focus on more than one market segments to develop effective strategy. The Travelodge Company should focus on multi market segments. This strategy can be well implemented by focusing on customer loyalty (Keegan, 2002, p.48). The development of customer loyalty can be enlarged by focusing on multi-segment targeting strategy. This strategy requires increases promotional strategies, increased market research and costly management. But this would benefit Travelodge Company to extend their global portfolio. The company can promote discounts on hotel to appeal people in more than one locations and cities. Positioning approach This approach is developed to create brand and product image to improve perception of customers about the brand. The Travelodge Company can implement cost based pricing strategy to consider both target marketing and market segmentation. The application of cost effective pricing strategy can benefit Travelodge Company to provide attractive design and superior quality to the customer (Havaldar, 2005, p.52). The hotel room and services will be positioned as reasonable priced and high quality. Marketing mix (7Ps model) The 7Ps marketing mix is an extended marketing model which is used to create competitive advantage and develop potential marketing approaches for Travelodge Company. Place The Travelodge Company will depend on supply chain management agencies and develop centralized supply chain network. The Travelodge Company is primarily located near motor ways. This is primarily due to the fact that the company wants to target road side users (Hamilton and Wewbster, 2012, p.45). Furthermore, the Travelodge hotel and hospitality company is also opened near Zoos, theme parks, shopping centres, seaside, museums, galleries and airports. Price The cost based pricing strategy is implemented by the company to provide quality and reasonable pricing choices for tourists and local customers. The pricing approach implemented by Travelodge Company is friendly and low prices which make customers to enjoy their vacations and stay bit longer (Fyall and Garrod, 2005, p.19). Therefore, it means that customer can spend more time on reason they have visited rather than focusing less on accommodation. The company introduced new distinctive pricing system to provide customer opportunity to check prices per room online. Promotion The traditional and online promotional strategies are implemented by Travelodge Company. The company provides internet offer like is a customer books any room 12 months in advance then they would get special discounted prices on selected rooms. The strongest promotional and advertising tool is internet (Dibb and Simkin, 2013, p.38). The company used radio, TV, magazines and newspapers adverts to persuade customers. Product The Travelodge hotel and hospitality company is a budget hotel with comfortable and clean rooms. The company promises to provide every lavish and quality experience for customers. the company offers 24 hour reception, remote control colour TV, fast check out, breakfast, accessible facilities, drinks vending and family rooms (Devashish, 2011, p.98). The online website of the company offers seamless booking facilities and online availability with leisure segments and dedicated business. Furthermore, the Travelodge Company can offer several inclusive packages to develop effective personalized relationships with consumers. People Employees and consumers are people and important part of an organization. The Travelodge Company can develop bottom-up and top-down communication strategy to motivate employees. On the basis of expectation level and nature, it is vital for Travelodge Company to develop effective service marketing strategy and business operation to satisfy the needs of customers (CIA, 2011, p.18). Furthermore, the company will try to recruit friendly and local staffs who know the area better than any other. Physical evidence The new brand entity can be enhanced by alteration in the external signage. Moreover, Travelodge Company will try to design an extensive internal maintenance program to keep consistent products standard (Blythe, 2012, p.32). By the end of year 2010, the total number of bedrooms provided by the Travelodge Company is 31,600. Each of these rooms is required to be refurbished to maintain high level of décor and comfort. Process The management of Travelodge Company can develop different PR team to take care of online quarries. Furthermore, this strategy can benefit the Travelodge to enhance high and effective customer loyalty (Armstrong, 2002, p.18). The flow of activities and level of customer involvement must be enhanced by the company to maintain effective organization process. References Armstrong, G., 2002. Global Marketing Management. New Jersey: Pearson. Basu, P., 2012. Marketing management. London: Routledge. Blythe, J., 2012. Strategic Marketing. London: Kogan page. CIA., 2011. The World Factbook 2011. Virginia: CIA Publications. Devashish, D., 2011. Marketing. Stamford: Cengage Learning. Dibb, S., and Simkin, L., 2013. Market Segmentation Success. London: Routledge. Egan, J., 2015. Marketing Communications. London: Sage.
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