Marketing Plan for Hotel Hillock - Case Study Example

Marketing Plan for Hotel Hillock Table of Contents Marketing Plan for Hotel Hillock 1 Table of Contents 1 Executive Summary 2 Introduction 2 Aims of the Project 3 Description 3 Product Life Cycle 3 Ansoff Matrix/Analysis 4 Current Product/ Services: 5 New Products/Services: 6 Markets: 6 New Markets: 7 BCG Matrix 7 Principal Marketing Objectives 9 Brand Positioning Strategy 11 Marketing Strategies 11 Conclusion 13 References: 13 Executive Summary Hotel Hillock has an experience of 50 years in the hospitality industry but now need to modernize and reinvent itself as a hotel that is constantly offering something new. As pioneers they should be the ones to launch something new before its competitors. They should remain new if they want their brand to remain in people’s mind. The problem of customer strength can be reduced if the hotel is at the front. When talking of Mount Abu the name of the hotel should immediately come to people’s mind. The advent of advent of smaller, more reasonably priced hide- outs for tourists, along with branded chains has forced the hotel to think of new strategies to overcome the customer crunch. This Report aims to highlight the core strengths that can be enhanced further with the growing opportunities in the Hotel Industry in Mount Abu as a preferred tourist destination. The weaknesses and the growing threats are highlighted and a key position of the Hotel in the industry as a whole and its future prospects along with recommendations are mentioned after having tracked the Hotel’s current position through the Ansoff Matrix, product and market growth strategy, BCG Matrix, analyse the hotel’s strengths and current market share and growth prospects and Product Lifecycle Introduction According to Poon (1993) new technology, more experienced consumers, global economic restructuring and environmental limitations are some of the challenges that the hotel industry is facing. Because of the development of e-commerce the intangible tourist market needs to be known. It has become necessary to know who the customer is and what the actual customer expectations are. This means an interactive website will enable the Hotel Hillock to plan out a good marketing plan based on the requirement of the customers. The hotel hillock is still marketing itself along traditional lines. It needs to get in touch with what the more travelled customer expects and upgrade its facilities accordingly. “New information and new communication systems will be required to collect and to analyse information and to realize it in the newly developed product/service” (Weiermair 2004, p4) if Hotel Hillock wants to come out of stagnation. Aims of the Project Evaluate the current Market Position of the Hotel keeping in mind its market share and current and future growth rates which solely depend on the new opportunities coming its way and the existing strengths. Evaluate key areas of investment in terms of entering new markets and new product/service portfolios. Description The Hillock Hotel is a forty room hotel which targets the middle and upper segments of the economy. It caters to the weekend and leisure tourist. The sales are sliding as its facilities are getting outdated. What it calls amenities are now ‘basic’ for a regular traveler. The hotel has got type caste as a ‘family’ hotel and needs to rebuild its image if it wants to attract the frequent traveler on the look out for an experience rather than just a place to stay in. Product Life Cycle If we study Hotel Hillock according to this theory we will see that initialing the hotel incurred expenditure on setting up. It provided the facilities that were probably better than those provided by others in the market already. The new facilities and amenities attracted the market share. This led to the growth stage of the product cycle where the customer base probably grew because of the feedback of customers. It also managed to develop loyal customers. Now it has reached the maturity level but is not yet on the decline. To counteract the stagnation in growth the hotel needs to Study all sales data Identify trends and monitor the activities of its competitors and any changes in trends Watch out for the changes that the hospitality industry is introducing. (Reid & Bojanic) Study other hotels undergoing similar stagnation An estimation of the position according to this cycle is that the hotel is reaching stagnation. Based on this assumption it needs to introduce a new marketing strategy which will keep it ahead of its present competitors. It needs to find new customers and reinvent itself yet keep the traditional base. Ansoff Matrix/Analysis As understood from theory, Ansoff Matrix states that in order to grow, any business organization needs to expand its existing market base along with diversification of products/ services. In the Hotel Industry, the basic products remain the same for all hotels; the only variant that differs is the quality of the product. In a broader perspective, one can include such costs as part of Services. The following diagram helps us understand the existing position of Hotel Hillock and the areas it can venture into: Source: http://tutor2u.net/business/strategy/ansoff_matrix.htm In the case of Hotel Hillock, it will apply to two segments: Current Product/ Services: The hotel has a room capacity of 40 rooms which comprise one suite, 3 terrace deluxe rooms, 15 deluxe double rooms, 12 standard double rooms and 9 small rooms (http://www.mountabuhotels.co.in). Added facilities being offered include travel desk, money changer, safety deposit box, doctor on call, car rental, horse riding and trekking options, picnics and parties organized, postal services, indoor games facilities like carom, table-tennis, badminton and safe car park and free accommodation for drivers. . All the rooms have AC with attached bathrooms with 24 hour hot and cold running water, 24 hour room service, television and cable, and telephone facilities with ISD/STD, laundry service. The Hotel boasts of a multi-cuisine restaurant- Mayur a coffee shop- Chit Chat, a bar- Surahi, a banquet and conference hall, a swimming pool, landscaped gardens, the hotel lobby is also landscaped like a garden with waterfalls and a handicrafts and souvenier shop. We see that the market penetration has been adequate. Testing new products in the Product Development Stage is an ongoing process and for a hotel, this process needs to be updated regularly since competition is high. New Products/Services: The Hotel can introduce new services to its customers which may include Organic Spa: Weekend customers have different requirements. A spa is something that many customers will look forward too particularly those on a leisure trip. This leads to initial investment but one can limit this to the organic theme and introduce an Organic Spa and create a marketing buzz and for the start up days, keep the costs enough to only break even and allow the customers to appreciate the service before escalating the prices. To add to this facility, include a signature ritual. For example every guest can be given a head massage and feet wash as part of a package deal. A Beauty Saloon: This is something which the targeted market that is the upper crust of the economic bracket expects. A sales shop selling exclusive ingredients not available anywhere else will be an attractive addition. As a marketing strategy samples of this in house product can be placed in the hotel rooms. Customers will definitely love these add on. A Gym or Yoga: These facilities will definitely boost the image of the hotel. Meditation in these wonderful surroundings will help in long stay bookings. Here differentiation in prices will work as a competitive advantage. Prices for the new facilities should vary and the comfort being provided should equate to the monetary value. In a hotel industry services offered serve as basic amenities, however it is sometimes the “physical evidence, the appearance of your employees and the premises can affect how customers see your service” (http://www.azot.gov/documents/Marketing_Tool_Kit.pdf) Markets: The markets entered into include customers from middle class and upper middle class bracket and tourists from mostly, Delhi, Gujarat and local areas. If the Hotel aims to improve its customer base or diversify it, it needs to introduce more facilities and gain competitive strength. New Markets: The Hotel should aim to diversify in its customer base with higher end as well as more upper middle class tourists. It needs to attract the foreign tourist that makes Rajasthan a popular tourist destination. This way the already existing facilities will be used to the fullest and the middle income tourists will enjoy a four star experience at a reasonable rate as well. The existing conference room facilities should be upgraded to include a computer; projector and screen so corporate are attracted. The external opportunities like the initiation of the Government towards eco-tourism, the approval of the Salegaon Dam Scheme, the declaration of Mount Abu as an Eco – free zone, invites tourists. In order to take advantage of the coming opportunities, the hotel needs to ensure added facilities are introduced on board and the tourists prefer Hotel Hillock to any other Hotel in the area. Along with the introduction of new services, what requires utmost importance is to make the customers aware of such facilities as soon as possible. The internet is the only way that information can be dissipated immediately. “ignoring and underutilizing ITCs can generate significant disadvantages” (Buhalis 2011, p-263). BCG Matrix The underlying assumption of the Matrix is that the cash inflow of any enterprise increases with the increase in market share. Market growth includes the industry attractiveness. Considering that, the Market Growth Rate shows an ascending pace (positive growth). With the new opportunities in the industry, this segment sees continuous growth. The Market share segment includes the competitive advantage of the firm. Some of the opportunities in this industry include: a.) Eco- tourism being supported by the Rajasthan Government b.) Declaration of Mount Abu as an Eco- Free Zone Hotel Hillock should ensure that it frames its policies in line with the new government policies and gain additional marketing advantage. It should focus more on eco- living, eco- habits and eco- friendly environment in the hotel. Added to this should be a touch of adventure tourism and outdoor activities like treks, hikes and conducted tours. Customers now look for an experience rather than a holiday. Hotel Hillock according to the study falls in the Question Mark Box. (Heavy market growth rate with a relative low market share). This implies that there is heavy cash consumption. This stage is often referred to as the ‘Problem Child.’ In this Stage, the enterprise has to be very careful with its investments, since the investments may have a two sided effect. On the one hand, it may succeed and move to the next stage to become a star, which means that the market share has increased, thereby pushing results or the investments have failed, leading to a decline in Market Share and reaching the Dog Stage, where the only option available is to sell of the remaining assets in order to save some investment or lose all the money. Hotel Hillock key strengths include its fifty years of experience in the industry, strategic location, eco-friendly theme, added benefits like excursions, safaris and various in-house facilities. However, the guest inflow has still remained moderate. The reason why it has not touched low yet is largely due to the above mentioned strengths. However, it is to be noted that the amenities have now become common among all hotels in the area and a customer in any case will expect the amenities, some of them now fall in the category of ‘basics.’ Thus, the Hotel does not have any significant competitive advantage. Hotel Hillock is amongst those 25% of the Hotels that do not use the internet as a medium of marketing. This leads to loss of potential customers. It is very convenient for customers to find the hotel details online and reserve a room of their choice. With the availability of other hotels online, Hotel Hillock loses a large chunk of the market share. The aim of the Hotel should be to widen its investments in areas of marketing in order to gain customer share. At this stage, the Hotel needs to focus on building long term customer relationships in order to gain customer base. The Hotel needs to build good brand image buy building competitive advantages on the basis of price or certain services (example : use of only organic materials in the hotel, to ensure that if a customer comes again, he/ she gets a free meal or a 50 % off on a spa for two). At the same time, the Hotel needs to analyze the areas where there is unnecessary investment, like in technology and where such expenditure can be shifted to other cash generating areas. Principal Marketing Objectives Product Portfolio: More products/ services need to be introduced like the Spa, Fitness Clubs, and Meditation Centers as mentioned above. This would improve the overall competitive advantage of the Hotel and indirectly give a marketing lead as well. Along with the wide product base, there needs to be diversification in products as well. Example: A spa using certain ingredients would be more expensive and would cater to the needs of the higher end customers, whereas a similar but slightly less exotic experience would be available to a lower end customer. Wider Customer Base: The objective of wider customer base is important since currently the customers come from a middle to upper middle class segment. If the Hotel is aiming to attract more corporate crowd, foreign tourists, off-season tourists and move towards a five star status, it needs to ensure that the transition takes place gradually with the requirements of all segments of customers being met. Use of e-Marketing: One of the most important marketing objectives to be included should be the use of internet to advertise the hotel as much as possible. It makes room reservations, hotel details, room options more easily available to the customers. This would increase the weekend crowd and the off-season crowds as well. It is the fastest way to communicate any change in product portfolio and new investments and an easy an attractive way to release new offers. To get information to the consumers as soon as possible it is important to enhance internet visibility. A targeted list of consumers needs to be readied to send out the list of new facilities. With an active e-mail service this is immediately possible. The internet is the easiest way of providing regular updates. Moreover interaction with the hotel on the internet can lead to the customer asking for specific information. The global reach of the internet cannot be ignored either as markets are targeted regardless of location. The more comprehensive the website the better the chances of making bookings immediately. Brand Positioning Strategy Brand Positioning is done on the basis of the Customers or the Competitors. The brand represents the relationship that the customer as well as the “consumer’s experience with the organization” (O’Neill & Mattila, 2010 p28) this can be strengthened by offering deals at the same prices so a slightly lower end customer can afford the four star facilities. Special group prices for a corporate can be introduced. Brand Positioning through competitors focuses on highlighting how one’s products or services being offered are better than the services being offered by the competitor. It is very difficult in the hotel industry to do such a positioning since all the hotels in the same category follow similar product lines and make changes according to competitors changing product lines. However, Hotel Hillock has an advantage here since they can call themselves pioneers of the industry in Mount Abu. They are the ones who have the ‘pioneer’ tag. Every time they promote a new product or introduce a new service, they can leave an image of “innovators in every aspect” “pioneers of every idea” when using competitive brand positioning. Marketing Strategies Product: The Hotel Hillock is a stand alone venture and so the need to market its infrastructure which includes the well laid gardens and conference facilities cannot be ignored. The present location being close to the market yet far from the madding crowd should be highlighted. The fact that the hotel is in a natural environment is an added advantage. Out door recreation like horse riding and picnic arrangements need to be emphasized. The marketing message that is sent out should be natural environment with modern facilities. Price: The room charges that the hotel offers along with the off season discounts must be in keeping with what the other hotels offer. A competitive price with value addition should be the hotels policy. A welcome drink is always appreciated. A free beauty treatment at the hotels new beauty salon or breakfast free if all meals are taken at the hotel. Incase the hotel needs to increase its price then there should be a visible justification in the hotels facilities for the increase in price, like a complete revamp of its kitchen and cutlery or an additional facility. Promotion: The promotion should come in the form of advertisements in newspapers where the targeted market exists. Travel agents and tour operators which Hotel Hillock is partnering with need to be regularly updated on the hotels additional facilities. There is a need in the hotel to offer a package deal at discounted rates to increase occupancy. If it wants to target the weekend leisure tourist then the hotel should offer a package deal which includes room charges, some free meal and an activity. The internet is the cheapest option for advertising its products and services. Place: The hotel is strategically located in the heart of the tourist market in Rajasthan. There will always be visitors here the hotel needs to prioritise its market to get its market share. If it wants to increase sales through a foreign tourist then its global visibility can increase only through the internet. The hotel right now is family oriented, but would like to have a corporate presence. For this the hotel needs to upgrade its information communications technologies. They need to train employees who will be able to effectively use the new technologies. Conclusion The Hotel Hillock already has a market and all it needs to do in an effort to get more customers and not lose the existing ones is to highlight its strengths, which are many including, the infrastructure and location. Clearly it needs to upgrade its internet presence so customers can feel it is the “one stop shop”. It needs reinvent the hotel stay as a memorable experience with activities like eco-tourism thrown in especially for families. This will ensure customers use the hotel not just as an overnight stop but for holidaying. More packages need to be worked out for the customer senses a bargain and is quick to do the booking. 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