El Paraiso Hotel Marketing Plan - Case Study Example

Marketing Plan xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Name xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Course xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Lecturer xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx Date Executive Summary For the past eight years, El Paraisso Hotel has been providing hotel services and products to customers in Spain and Europe at large. The hotel has been striving to create a unique accommodation and other hotel services different from other services in the market. In doing this, the El Paraisso Hotel have expanded its operations, renovations and upgraded its products purposely to reach out more customers. El Paraisso Hotel is the only hotel in Barcelona with SPA services and serene environment thereby standing above the competitors. The hotel has been successful in expanding its market share and customer base in the European market and hence it is an international hotel. Nevertheless, El Paraisso Hotel has not been able to penetrate well the United Kingdom market. El Paraisso management considers this market to be very strategic and with potential considering the number of British persons visiting and spending time in Spain. There are usually many citizens visiting Barcelona especially during the cold seasons in the UK. As such, El Paraisso Hotel is considering massive marketing campaign in the UK market. Based on the hotels experience in the hospitality industry, it is looking forward to entering this market. The hotel is facing huge competition both from Spain and abroad from the competitors who are also looking to tap the United Kingdom market. With the hotels unique and exclusive services and products, it will be able penetrate the market without much difficulties. Essentially, El Paraisso Hotel has drawn objectives, action plan and marketing strategies to help it in marketing in this UK market. Table of Contents Table of Contents iii 1.0 Introduction 1 2.0 Situational Analysis 2 2.1 Customer Analysis 3 2.2 Competitor Analysis 4 2.3.1 Strength 5 2.3.2 Weakness 5 2.3.3 Opportunities 6 2.3.4 Threats 6 3.0 Marketing Objectives 7 4.0 Marketing Strategies 8 4.1 Raising Sales Revenues through Entering New Market 8 4.2 Building a Market by Introduction of a New Product 8 4.3 Use of Promotional Campaign to Publicize Brand Awareness 9 4.4 Building market share by introducing a product with low price 10 5.0 Action Plan 10 5.1 Product and Services Marketing 11 5.2 Brand Marketing 11 5.3 Pricing 12 5.4 Promotional and Communication Decisions 12 5.5 Financial Details and Forecast 13 5.5.1 Sales Forecast 13 5.5.2 Pro Forma Profit and Loss 14 6.0 Contingency Plan 15 7.0 Conclusion 15 8.0 References 17 1.0 Introduction El Paraisso Hotel is used in this marketing plan. El Paraisso is a hotel operating in the city of Barcelona, Spain. This hotel is operating in the hospitality industry and in the hotel sector of the industry. It is a five star hotel located in the outskirts of Barcelona city. As such, it provides a unique experience because of its serene and secure environment. Besides serving the local market, the hotel has recently expanded its marketing to make its presence felt in other European nations. Notably, the hotel is heavily involved in tapping the United Kingdom market. In essence, this report provides a comprehensive marketing plan to help the El Paraisso Hotel to tap the UK market for year 2014. 2.0 Situational Analysis El Paraisso hotel has been operating in Barcelona for the last eight years. The hotel has been very influential in the hospitality industry. This is because the services provided have been satisfying their customers’ needs. The hotel offers accommodation, conferences facilities, entertainment and food and beverage, spa, massage and pool facilities. The hotel has about 100 rooms that facilitate provision of accommodation services. The hotel management has good information about the market for their products and their target customers. Their customers have been impressed with the services provided in Barcelona, this has motivated the management to anticipate expand their market to the UK. The analysis of the company’s market reveals that the hotel has been experiencing growth in its sales and the potential customers. The hotel has also been able to introduce new products in the hotel over the year which has expanded the variety of services available in the market. To better the market and future of the hotel marketing is an essential aspect which will enhance innovation and increased demand for the company’s products (Brotherton 2012). The market trend of the hotel has indicated growth in service provision. This has been facilitated by growth in technological level of the hotel. This has enhanced efficiency and cost effectiveness in the hotel making it possible for the hotel to access large market for their services. The performance of the market has been steady over the last 8 years resulting to 6 per cent growth in their market performance. The hotel also ensures quality services and is committed to enhancing creativity within the organization. This has been enhanced through employment of well equipped staff and carrying out trainings to enhance innovation in the hotel. The management of the hotel is targeting expanding their market to the UK in the next financial period. According to Hassan (2000), the objective of the move is to explore other market so as to increase the sales and profitability of the hotel. 2.1 Customer Analysis El Paraisso targets customers from Barcelona and the UK as well as any visitors to their target market area. Their range of services allows them to target people holding meetings so that they can use their conference rooms, people on holidays or retreats. The hotel also targets households who may be in need of a retreat or time out for meals or drinks. The hotel has both group and individual customers since both have the potential of enjoying their services. This defines their market demographics for the hotel. In Barcelona the hotel has been serving many tourists from the UK and these tourists are so much pleased with their services. Best (2013) suggests that, this has been one of the factors that have made the management see the need for expanding their market to the UK. This will facilitate provision of services to these customers in their home country as well as reach to other customers. The current customer population is about 15,000 people in Barcelona, the hotel is also targeting to access to about 10,000 people in the UK as their customers. The hotel targets both male and female customers from 20- 60 years as the 60 per cent of their market position since they are cognizant with their health, have incomes and tend to go out often. The targeted group tends to enjoy so many meals made in restaurants, a lot of partying with friends. Since most of them are working may also need to meet with colleagues. They also have less health concerns that they are keen about when making orders (Reinhardt & Gurtner 2011) The customers are in need of quality customer services, this is because they are able to pay for them and have been used to excellent customer services. The customers also need convenience in accessing to these services that is why establishing the hotel in the UK is important since it makes it convenient for the customers to access to these services. The market for the hotel has being growing steadily by about 6 per cent in the last 8 years. The expansion in market the market growth is forecasted to increase to 10 per cent. This been indicated by the ever growing revenue and profitability for the hotel. This growth can be attributed to the quality of their services and more so the meals. The management has also been keen on enhancing good health for its customers by providing health meals. The hotel is in operation for twenty-four hours with the employees working in shifts. This factor has contributed to the growth of the hotel. The fact that people who are employed have very many hours working has also contributed to the growth since they also find it worthy for them to go out for retreats , dinners and even massages. People spend much time away from their family due to the nature of their work schedules make it important to spend time out with their families for meals or recreation. The targeted market in Barcelona gives the hotel a chance of increasing its market segments. 2.2 Competitor Analysis El Paraisso hotel faces competition from other businesses in the industry who are direct competitors and other businesses in other industries but also extending their services to offering some services like massage and pool facilities. There are competitors in Barcelona and other cities in Spain as well as in other countries in Europe. As supported by Kotler & Armstrong (2010), the stiff competition makes it possible for the company to enhance quality services as one of the strategies to gain competitive advantage. The company has also adopted differentiation of its services to enhance its competitiveness. Branding of services in the hotel makes their customers prefer their services to any other in the industry giving them a competitive advantage. Since the hotel has various segments, the management values feedback from the customers about each segment so that they can incorporate it in any developments they launch for the enhancement of competition (Shankar 2010). 2.3 SWOT Analysis The SWOT analysis evaluates the hotels strengths, weaknesses, opportunities and threats in relation to the United Kingdom market. 2.3.1 Strength They also have a range of resources to exploit The hotel employs well-trained staffs who are give quality services to their customers They also enjoy the high customer loyalty that they get from their customers They have quality services that make their customers contented with the prices they give them The staffs in the hotel have good relationship with their customers Effective communication channels between the segments 2.3.2 Weakness Lack of accountability among the managers in each segment may results to low performance in the company Investing in the UK may affect the business due to language barrier The learning curve due to entrance to a new market Over reliance on external investors to effectively fund their activities may limit the hotel especially if there are factors limiting external investment. Budget constraint in the business may make the organization to initiate developments in service delivery in the organization. 2.3.3 Opportunities New customers in the new market explored Steady growth in the business Technological advancement in the business gives the business an opportunity for innovation. 2.3.4 Threats Stiff competition in the industry may make the company incur additional expenses leading to increased operational costs and eventually reduce the profitability of the organization. The employees in this hotel may be draw by other businesses due to their experience and skills Language barrier between the staff and the customers is also likely to affect the revenue of the hotel 3.0 Marketing Objectives These objectives outline where the hotel wants to be in a specific period, they translate the hotels mission in an understandable statements that are to contemplate, (Cohen 2005). The objectives relate to the sales revenue, the market share, total revenue/profits, satisfaction of the customers, hotel growth and hotel aims. These objectives will be pursued using the promotional mix thereby asserting the importance of the promotional mix in setting the objectives and achieving them as well, (Wood 2008). As required of objectives, these objectives are specific, realistic, achievable, and measurable and are in a timeframe. The objectives focus on the financial and marketing parts of this hotel. These are the objectives for this hotel; To provide a unique and positive hotel experiences to the customers To provide service based hotel with a primary goal of exceeding customers expectations To considerably increase customers from the united kingdom by 30% for the 2014 year through offering superior services and products To identify new markets and expand the existing markets for our services and products To achieve the growth targets within the budget and period To reach the customers through the strategic means To increase revenue generation by 10 per cent on the past revenue made by the hotel Accomplish growth within the budget frame costs Increase the customer’s confidence in the corporate and travel markets from the United Kingdom Provide the most convenient holiday and hotel services for customers Increase the market share by 10 percent in the internal market and be the preferred hotel by customers from the United Kingdom Increase the hotels profit by 15% Make the best investments with the maximum returns Increase the market share by 11% Develop services and products specific for customers from the united kingdom Increase customer enquiries from the united kingdom by over 5,000 every month Appoint marketing agents to market the hotel in the united kingdom before start of year 2014 4.0 Marketing Strategies 4.1 Raising Sales Revenues through Entering New Market The company seeks new market in UK to increase its revenue sales as well as keeping increasing revenue growth. The company’s management wishes to give employees tools and necessary information about cost reduction and revenue growth for new business. The new market will provide an opportunity for new customers to enjoy company’s services and products resulting to more sales. The company intends to achieve this through several strategies like logistics, sales and budget strategies. Logistics department may assist stores escape out-stocks to ensure customers are satisfied thus increasing sales revenue. Then, salespeople after getting market intelligence from customers communicate to operation, product development and service departments for implementation process (Haydu & Hodges 2008). To achieve revenue sales increase the company needs to analysis everything new business does as well as its current state of resources. Revenue sales budget need to be implemented in order to increase company’s sales revenue rather than talking about it. Innovation is required in order to shape ideas into products prototypes and introduce them into new market. In addition, disciplined daily routine of cost productivity improvement is necessary for company’s increase in sales revenue, market competitive and future growth (Liabotis 2007). 4.2 Building a Market by Introduction of a New Product Company’s value and vision is to provide standard services and products to satisfy its customers and become a world-leading hotel. To achieve this company will ensure that customer’s needs and desires are catered for. Company will conduct a survey to determine current preferences and taste of customers. The survey needs to address specific products customer’s desires or needs in order to be satisfied. Businesses are faced with common problem of satisfying their Customers because customers taste and preference changes every time. In order to offer relevant and updated services and products to customer’s hotel management will keep in touch with its customers. New technologies like website, face-book and twitter will be used in order to get customers feedback on time about their expectations and preferences (Markmann et al. 2013). The survey will be taken quarterly to analysis the performance of the existing services and products and whether their met customers expectations. It will also establish what service and product they like to be introduced in the market. Then management will use design thinking, creativity and innovation strategy in shaping a unique value proposition to them (King & Tucci 2002). 4.3 Use of Promotional Campaign to Publicize Brand Awareness Use of promotional campaigns is an excellent way to increase brand awareness in the market as well as maintaining good rapport with customers especially the regular ones. Market visual include advertisement, trade shows, brand building, store display, promotions and creating public relation ensures customers interacting with company. The company expects to use these tools to promote its products especially to new customers (King & Tucci 2002). The hotel will use new technologies like website, face-book, twitter and mobile phones to provide basic information about its services and products to customers. This new technologies will offer fast and effective means to advertise hotel’s products to new and existing customers (Gotter 2013). 4.4 Building market share by introducing a product with low price In most cases, forces of demand and supply in the market determine pricing. Price increases with increase of demand caused by market forces. The company will classify its services and goods into two kinds, which are; price insensitive and price sensitive to remain competitive. The company will aim at price sensitivity because often customers go for price sensitive and low priced products. Haydu $ Hodges (2008), points out that, products sold volumes increases with products price decrease which shall be company’s core objective. In addition, shopping decisions on price insensitive products mostly is determined more by appearance, quality and uniqueness rather than by products prices. As pointed out by Haydu $ Hodges (2008), the classification of service and products depends on customer’s needs and wants on a certain service and product. Therefore, company management will ensure that prices are fair and reasonable with product’s unique quality. To set the low prices to attract more customers will be determined by last year’s prices and what the customers expect to pay. The costs of production will also determine how low prices should be to services and products. Nevertheless, the prices must be fair to customer’s value (Charan 2006). 5.0 Action Plan These are the set of approaches of what the hotel wants to achieve as well as how it is going to achieve them, (Moriarty 2009). This action plan outlines what is to be done, by whom, when and the cost of the actions. To easily follow the actions, a time table has been set, this timetable indicters everybody responsibilities in execution the plan of actions. This avoids misunderstanding and every person in the hotel will be aware of his or her roles in implementing the marketing plan. The plans sets out the coordination of marketing programs especially in designing the services and products, pricing, distribution and communication to customers from the United Kingdom, (Westwood 2013). 5.1 Product and Services Marketing The El Paraisso hotel provides various distinct services and products at exclusive levels. With the products upgrade and renovations that were completed in 2011, El Paraisso hotel wants to tap the United Kingdom market. As such, the hotel plans to promote and market itself to the United Kingdom market for the financial year 2014, (Cateora & Graham 2005). With the developed interiors and unique and established service levels, El Paraisso hotel will gain a big share of the United Kingdom market. El Paraisso will cover the following aspects; The subjects of the media release and advertising will primarily focus on the exclusive services and products together with the upgrade and expansions carried out. New brochures will be printed and distributed across the United Kingdom sales offices and in major potential business sources. Organizing trips in the UK for familiarization with employees in sales offices in the different locations across the UK. This will also display the hotels product offerings. 5.2 Brand Marketing Enhancement of the hotels brand value will be done in line with the laid down marketing strategies. Owing to the products upgrade, the brand value will be revamped in the year 2014 in order to maximize the revenue from the rooms division, (McDonald & Wilson 2011). El Paraisso hotel will be associated with hospitality magazines, shopping malls and hotel exhibitions in the United Kingdom as part of promotional activities. This will enhance the brand value of the hotel. 5.3 Pricing While observing the hotels marketing strategies, the hotel will charge affordable prices for its products and services. The rates will be made available to the customer’s convenience so that they know in advance in channels and online. For corporate rates and prices, El Paraisso will provide prices that are negotiable depending on the magnitude and nature. To predict the nature and future trends of the United Kingdom market, El Paraisso have prepared expected demand depending on the customer purchase rates. Accordingly, dynamic prices will be discounted depending on the day and time of the year. These rates will be loaded online and will be available in all channels of distribution simultaneously. The rates and prices will be subject to change by the hotel as need calls for, (Neves 2007). 5.4 Promotional and Communication Decisions El Paraisso hotel will apply different promotional and communication decisions in the market these are; Advertising: the hotel will use advertisements to market its products and services. These advertisements will appear in print and broadcast media in the United Kingdom market. The 2014 advertisements will primarily focus on enhancing product features especially those that were added during the renovations. Public Relations: press meetings will be conducted at intervals and when there are food promotions, these will include publications from Barcelona and El Paraisso hotel. The renovations will be showcased during the press meetings; this will open El Paraisso to the public. In addition, the football season of the UEFA champion’s league and the domestic La Liga in Spain will be a very good opportunity for the hotel to attract more customers from the United Kingdom, (Pitta et al. 2006). Sales Promotion: As indicated, sales promotion will be conducted, though the channels selected. Familiarization trips have already been put in place to display the hotels rooms and accommodation facilities. Personal Selling: El Paraisso has created various teams to spearhead sales promotion in this market segment. This sales team will visit corporate houses and host events to promote the hotel in UK. The teams will also be responsible for maintaining existing customers (retention accounts) as well as counter the competitors measures in the market (hit accounts), (Pickton & Broderick 2005). Customer Service: customer feedback system has already been put in place; the system is in accordance to corporate office guidelines. This practice will be followed keenly for this market. 5.5 Financial Details and Forecast The El Paraisso forecasts the sales forecast and the expenditures to generate the sales. The United Kingdom market is enormous and the only limiting factors in this market are time factor and spending limitation. The hotel has been able to manage growth in new customers; this indicates commitment and great efforts in marketing, (Kotler & Armstrong 2010). 5.5.1 Sales Forecast Sales Forecast   Year 2014 Room Sales $ 456,374 Accommodation $ 375,643 Conference Sales $ 98,764 Meals $ 213,456 Bear and Beverages Sales $ 436,744 SPA and Massage Sales $ 64,532 Entertainment Sales $ 98,674 Total Sales $ 1,744,187 5.5.2 Pro Forma Profit and Loss Pro Forma Profit and Loss   Year 2014 Sales $ 1,744,187 Direct Cost of Sales $ 174,830 Other Production Expenses $ 56,442 Total Cost of Sales $ 231,272 Gross Margin $ 1,512,915 Expenses   Payroll $ 236,574 Marketing Expenses $ 243,847 Payroll Taxes $ 14,500 Other Expenses $ 67,440 Total Operating Expenses $ 562,361 Profit Before Interest and Taxes $ 950,554 Tax Expense $ 285,166 Net Profit $ 665,388 6.0 Contingency Plan El Paraisso hotel will take these strategic actions when adverse results will be obtained. They are the measures that the hotel will take if the results it targets to achieve deviates from the targeted results. When the sales results, the revenue generation and the marketing expenditure deviates considerably from what was forecasted (Kotler & Keller 2012). As such, the company has documented risk awareness, monitoring of conditions, competitors assessment, internal control system and rapid response team, (Tompkins 2010). In these measures, they will help avoid the El Paraisso from losing its market share and its management will be able to assess the deviations in time to avoid further negative effects. The measures will as well help the hotel to make the most out of the unexpected market conditions, (Neves 2007). 7.0 Conclusion The most important thing in the beginning of a business to its successful endurance in the market requires that a clear, well organized and predictive business plan. That business plan should inculcate in itself the various factors that are paramount in ensuring a powerful thrust in the market space. The powerful thrust cannot be achieved unless the positive forces are gathered in one to ensure they found a powerful forward projection into the partly certain and uncertain future. On the other hand, the negative forces that can cause the collapse of the business organization should be, if possible, be premeditated to ensure a proactive interference with the plans of the business. El Paraisso Hotel attempts this by ensuring that the various key market players are in place. This has been indicated by the selection of the prospective markets, the action plans, the contingent plans, the business promotional plans among many other factors that have been discussed. The UK market that has many other players in the hotel industry is not an easy one to establish a business that is not founded on strong grounds. This business plan faces these prospective hard lines with anticipation that will anchor it making it easy to realize the projected targets. Owing to this fact, this business plan explores the various playing grounds in the huge UK market while keeping in mind the maximization of profit that will lead into successfulness in the operations of El Paraisso Hotel. 8.0 References Best, R, J, 2013, market-based management, strategies for growing customer value and profitability. Brotherton, B, 2012 international hospitality industry, Routledge. Cateora, P, R, & Graham, J, L, 2005, international marketing: McGraw-Hill/Irwin. Charan, R, 2006, profitable growth is everyone’s business, crown business. Cohen, W, A, 2005, the marketing plan: Wiley. Hassan, S, S, 2000, determinants of market competitiveness in an environmentally sustainable tourism industry, Journal of travel research, 38(3), 239-245. 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