Small Business Marketing - Sun Motel - Case Study Example

Name Course Teacher Date Mission and Objectives A mission statement should ideally clearly spell out the organization’s reason for existence. In a nutshell then a mission statement should then answer questions of: What does the organization do? Why was the organization established? Who are its primary stakeholders? And what responsibilities does the organization have towards these stakeholders? (Haschak) The mission statement for Sun Motel should be: To provide reasonable, clean and comfortable accommodation for their customers and thus contributing towards the development of the town and its people. Objectives are ways goals which the firm sets to realize its mission. In short objectives are guidelines which the firm intends on following to achieve its purpose of existence. Objectives can be both short term and long term. Short term objectives are less those whose time frame of actualization is less than a year and long term objectives are those whose time frame is greater than a year. Usually short term objectives help in achieving long term objectives. (Mager) Sun motel’s objectives should thus be: Long term objectives: To gain a competitive advantage in the category for reasonable accommodations Short term objectives: Advertise more on the fact that the Sun motel has a beach area, serves country style meals made from fresh ingredients, is small and comfortable and affordable and has river views. It should also develop the beach area to open a mini beach bar or beach café to increase foot traffic there as well. It can also offer tours of the town. The objective is basically to increase awareness and sell the motel USP as being small, comfortable and affordable. SMART Goals SMART goals are goals which are specific, measurable, attainable, and relevant and time bound. (Doran) The reason why firms should set SMART goals is to ensure that the goals are achievable. Working on the objectives we mentioned earlier, let’s see how the Sun motel can achieve these objectives by setting SMART goals. We know that the motel has debt which will be cleared soon. Two years to be specific. So that means the motel will have more disposable funds then. So any big expenses should not be incurred before two years. We also know that the motel has a good reputation, with the owners being social and friendly people. Further the location of the motel is quite advantageous as it has river views and a clean beach area. Further it offers country style meals made from fresh ingredients. So now what should the Sun motels goals be? We can divide the goals into before debt is cleared and after debt is cleared periods. So short term goals here would be those less than 2 years and long term ones would be greater than 2 years. That is timely. The Sun motel needs to differentiate itself from other motels of same size and similar product mixes. This is attainable. But how? This will form the specific part of the goals. The motel on capitalize on its location and develop its beach area by setting up a café or movie night or some sort of frequent activity there. This is also relevant because the motel can earn revenues from here and plow these into their long term goals. The long term goal can be expansion of rooms or expansion of services. Both would aim to lead to higher revenues for the firm which they can then plough back into the business. Swot Analysis A SWOT analysis is an internal/external audit of an organization. It highlights the firm’s internal strengths and weaknesses and points out any external threats or opportunities. The Swot analysis is then used to minimize the effect of weaknesses and threats and maximize the strengths or utility derived from availing opportunities. (Mehta) The swot analysis for Sun Motel is: Strengths The motel has been in the industry for a decade. Both the motel and its owners have a good reputation. The motel is known as small, clean, comfortable and affordable. The owners are known as social, friendly and knowledgeable. The motel’s location is very strategic too. It has a clean beach area and river side views. It offers country style meals made from fresh local ingredients. It is not located far from the capital city, just a 3 hour drive. The town in which it’s located is a popular vacation destination. The overheads are low and prices are affordable. The number of repeat customers is solid now. Weaknesses The motel’s size is a weakness as it cannot offer many services competitors offer simply because it cannot earn economies of scale on them. The debt though small is still there, meaning the motel’s funds are tied up in repayments. One of the reason’s the overheads are low is because the motel offers limited services. Also one major weakness the motel faces is that it does not have a USP yet i.e. a unique selling point. Something which sets the motel apart from similar motels of similar sizes offering similar services. Opportunities The area in which the motel is located offers many opportunities. For one thing Sun motel can develop its beach area. Another is that since it has river views it can offer tours around the rivers or then plan picnics for its customers there. Further, the town in which Sun motel is located is growing in size, more people means more prospective customers. They are also located on the edge of a farming area which can be turned into a vineyard and people who come to visit the vineyard might just opt to stay at the Sun motel, also the motel can offer special discounts to those who come to the vineyard. The owners can themselves also set up weekly sessions or start writing guides for the out of town people and this will increase awareness about the motel. It could also serve as its USP. An increase in the number of couples wanting weekend getaways and families during school holidays would prove to be an ideal time to advertise new promotional offers such as discounts, bar-b-ques, family picnics and movie nights, among other events they can plan for customers. Threats There is threat of competition from both small motels and the large hotel chain which has opened up and offers many services. SWOT Strategy The motel can further build on its brand image as being clean, comfortable and affordable by advertising not through conventional channels but more unconventional channels like word of mouth and getting ratings in traveler’s guides. Also they can use their existing and solid flow of repeat customers as advertising agents and brand ambassadors for their motel. They can hand out T-shirts, mugs, pens, notebooks, calendars and other merchandise with their company logo or pictures of their motel and the town it’s situated in to increase awareness and create a brand image. Further the USP of the motel can be its owner’s who are well known in the community and know the community well enough to offer advice to out of town people. The owner’s can use their network of friends to advertise their motel and in fact set up sessions at the motel for out of town people to help them decide where they want to stay, places they want to visit etc. They already have a solid reputation in the town as being friendly and social. The motel should capitalize on couples and families who are increasingly vacationing more by coming up with customized packages for them. As for the competition, the motel will minimize a lot of the impact if it can carve a differentiating factor for itself, which sets it apart from others. The owner’s are a good place to start. The location is another, the motel can develop the vineyard, offer a selection of homemade vines, start their own collection of homemade jams made from local ingredients and marketed as homemade jams or other edibles, offer tours around the rivers, and offer custom made activities for couples only like boat rides in the river or horse rides around the town. All these factors should help the motel create a competitive advantage for itself. Their customer is your average middle class vacationer looking for a short sweet time away from home at affordable prices. Marketing Mix In a marketing mix the product is any good or service offered by the firm for a larger customer base and which has specific units. (Shimizu)The current services that they offer are accommodation and dining as well as scenic views of the river and a nice and clean beach patch. Also the owners offer advice on travelling around the town. There is a lot of room for improvement in this area as the motel offers a unique mix of accommodation, dining, scenic beauty and friendly advice. So if the owners use this unique blend of components and highlight that their motel offers all this than they could receive even higher customer turnovers. Further they can offer homemade products like jams, jellies and marmalades and sell them under the brand name of Sun Motel to increase revenues and create a unique selling point for themselves in the minds of the consumers. The current location is a mid size town not far from the capital city but still not urbanized completely. The Sun motel has the advantage of being located in such a position that it offers its customers a river view, is next to a farm area which can be converted into a vineyard and has a nice and clean beach area which is free of dust or weeds. Also since the town is not far from the city, the Sun motel will benefit from the increase in couples travelling to nearby locations for a short vacation or families visiting during holidays. Plus the motel can use this opportunity to further advertise its name via merchandise and word of mouth so that when these people go back home they can tell their friends and family and relatives etc who can then come next time. The owners should also consider developing the farm area into a vineyard and offer homemade vines. The Sun Motel is a small motel with only 12 bedrooms so its promotion budget will also be small. The costs of promotion should not exceed benefits; otherwise the whole point of undertaking a promotional strategy will be lost. The promotional strategy should focus on marketing the motel as clean, comfortable and affordable. At the same time the promotional strategy should highlight that the Sun motel offers country style food made from fresh ingredients and that the owners are both well established in the social scene. Also publicity is always better than advertising. The owners should focus on getting good reviews in magazines and traveler’s guides because they will be more credible for the consumers and they will be free of cost. The owners might have to register themselves in traveler’s magazines though. Also they can distribute merchandise which advertises their firm name. All of these are inexpensive yet efficient promotional strategies. Price is the amount of money charged by a firm for the product or services it provides to consumers. Price directly affects how much of a good or service consumers will utilize, for elastic products. In this case the tourism or hotel industry is a luxury good and hence a change in price will be met by a larger change in quantity demanded. One of the key features about the Sun motel is that apart from being clean and comfortable it is also affordable. So price should not be increased, instead the motel owners should focus on adding services to their portfolio so that they can earn higher revenues. They can also offer discounts during special holidays or customized packages for customers who will come during special times like Christmas or Easter or public holidays. At the end of the day the price for Sun motel should not be altered, or at the very least it should not be increased. Evaluation of Strategies Right now the motel should adopt a low cost differentiation strategy. A low cost strategy is one where the firm aims to reduce costs so as to be able to reduce prices and drive out any competition. One of the advantages that the Sun motel has is that its costs and overheads are quite low and once the debt is serviced in about two years these costs will further decrease. Its should follow a differentiation strategy by positioning itself as a small, clean, comfortable and affordable motel with owners who are well known in the community and who know the town and its people quite well. One way to measure if the strategies are working is to see if the motel has an increased flow of customers. And more importantly how many of the customers are actually coming because of word of mouth or reading about the motel in a gazette or similar promotional sources. Also the owners of Sun motel can check how many people are actually returning. They can also ask for feedback from customers by asking them informally or through comment cards which rate various aspects of the motel. Another way to measure if the strategies are working is to check if the motel gets any favorable reviews. The Sun motel’s owners can ask hotel critics to come and explore the motel and see if the standards are good and then write about them. On the down side critics might give biased opinions which might affect sales and future revenues negatively. Bibliography Doran, George T. "There's a S.M.A.R.T. way to write management's goals and objectives." Management Review. Nov 1981. Haschak, Paul G. Corporate statements: the official missions, goals, principles and philosophies of over 900 companies. Jefferson, N.C: McFarland. 1998. Mager, Robert F. Goal Analysis, 3rd. edition. 1997. Mehta, S. Marketing Strategy. 2000. Shimizu, [Koichi. "Advertising Theory and Strategies,"16th edition, Souseisha Book Company. (Japanese)]. 2009. Read More