Birchfield Bread and Breakfast Marketing Strategy - Case Study Example

Birchfield Bread and Breakfast Table of Contents Birchfield Bread and Breakfast Table of Contents 2 Executive Summary 3 The long term goal of Birchfield Bed and Breakfast is to be the leading establishment of its kind. The organization wants to create a differentiating experience for its customers capitalizing mainly on its human resource, aesthetic natural surroundings, excellent interior and exterior décor, quality service, delicious food and awesome beverages. The company has been experiencing a slowdown in its guest arrivals. Analyzing the issues, it was found that the establishment has not been doing extensive marketing and promotional activities required in this industry. Hence, Birchfield has been losing on its revenue. After an analysis of its internal and external environment, it was recommended that the establishment must involve itself in extensive marketing programs. Adding to it the establishment must expand and renovate itself to suffice the specific requirements of the tourists coming in Honolulu. As of now, the establishment has been offering a package of bed and breakfast. In this process, it was failed to cater the local and outside patrons who were only looking for fine dining. The establishment is recommended to offer its service beyond its traditional one to extend its customer base at a larger scale. 3 Introduction 4 The Market 4 External Analysis 5 Internal Analysis 6 The Objectives & The Issues 8 The Remedies 8 Enhancing the Service 8 The Structure 9 Lodging and Room Amenities 10 Fine Dining 11 Pricing 12 Marketing and Promotional Activities 12 Expansion Strategies 14 Financial Considerations: The Outcome 15 Conclusion 15 Reference 17 Executive Summary The long term goal of Birchfield Bed and Breakfast is to be the leading establishment of its kind. The organization wants to create a differentiating experience for its customers capitalizing mainly on its human resource, aesthetic natural surroundings, excellent interior and exterior décor, quality service, delicious food and awesome beverages. The company has been experiencing a slowdown in its guest arrivals. Analyzing the issues, it was found that the establishment has not been doing extensive marketing and promotional activities required in this industry. Hence, Birchfield has been losing on its revenue. After an analysis of its internal and external environment, it was recommended that the establishment must involve itself in extensive marketing programs. Adding to it the establishment must expand and renovate itself to suffice the specific requirements of the tourists coming in Honolulu. As of now, the establishment has been offering a package of bed and breakfast. In this process, it was failed to cater the local and outside patrons who were only looking for fine dining. The establishment is recommended to offer its service beyond its traditional one to extend its customer base at a larger scale. Introduction Birchfield Manor Bed and Breakfast is one of the budding establishments of its kind. This lodging establishment offers bed and breakfast package and fine dining in an attractive environment. Birchfield has also made its mark in organizing weddings and award banquets. Located in the outskirts of United States, Birchfield wants to make itself an attractive leisure destination. The establishment aspires to become one of the leading lodging establishments in this region. The organization intends to take on a full-fledged hospitality approach to this ‘bed and breakfast initiative’ and build up an extensive customer base in this competitive market place. However, there are certain issues which are required to be resolved by Birchfield to become one of the leading ‘bed and breakfast’ establishments in this region. This report is an effort to resolve those issues by analyzing the internal and external environment. The solutions and the required steps have been discussed considering both the internal and external environments of the organization. A conclusion has been inferred from the analysis part. For the betterment of understanding, the report has started with an executive summary summarizing the key aspects of this paper. The Market Birchfield Bed and Breakfast, along with other short-term lodging establishments on this Honolulu, have been a substantial part of the tourism. Of the short-term lodgings in this region, twelve are categorized as inns, 25 as long-term lease facilities (rentals, condos, and houses) and fifteen are offering bed and breakfast as Birchfield. Hotels and motels constitute the largest percentage of rental properties in this region. In the last year, on an average the rentals have increased by 20 %. However, the region has been experiencing a modest projection of 30 % increase in the rentals per year. The last year project was less than this average increase. This was done in the wake of recent economic downturn. However, this year the leading establishments in this region are expected to see a 40 % increase in the tourist arrivals than the last year. At the same time, they are expected to increase their rentals by 25 %. The establishments are also expecting a 50 % increase in their revenue amount compared to the previous year. This projection is without any considerable increase in advertising or promotional investments, but is based on the projected increase in the tourism in this region. The major customer segments are tourists from the urban United States who traditionally prefer the cozy and aesthetic environment of Birchfield, and local guests who require the facilities for various events. External Analysis Porter’s Five Force Analysis This segment includes the ‘Porter’s Five Force Analysis’ of the industry. Entry Barrier The lodging and meal industry demands a considerable amount of capital. However, there is no requirement of heavy and expensive machinery in the industry. The most significant resource is human resource. As a consequence, the entry barrier in the industry is quite low. As new entrants could enter into this industry, the establishment may have to face an intensive competition in the industry. Bargaining Power of the Buyers There are a number of lodging and meal establishments in the region. The customers can easily switch from one establishment to the other without incurring any switching cost. They have a number of organizations to choose from. So, the bargaining power of the customers is quite high for this industry. Bargaining Power of the Suppliers The suppliers in this industry enjoy low bargaining power. The lodging organizations have the leverage to choose the supplier of their choice from a large number of suppliers. Threat of Substitutes The hotel can emerge as the substitutes for the lodging establishments. Competitive Rivalry A huge no of players are operating in this industry. There is high possibility that new entrants would enter this industry at a regular basis. As a consequence, the establishments compete to fetch the prospective customers of this industry. The competitive rivalry is high in this industry. Internal Analysis SWOT Analysis Strengths The company has a strong management team which is in the heart of the service offered by this organization. The organization offers quality service at an affordable price range. The organization has a rich rustic ambience to attract the tourists. Moreover, Birchfield offers a pleasant stay with a fine dining. Apart from these services, Birchfield also offers banquet hall facilities for wedding and other events. Weaknesses The most significant weakness of this establishment is that as of now the company has no proper promotional strategies. The organization has one advertisement aired on TV. This is one of the reasons that Birchfield has been losing on its customer base. Moreover, the organization has been offering both food and room services a package; as a consequence, the establishment is losing on the guests who are either looking for lodging or dining facilities. Threats The establishment is facing threats from its competitors as well as from the hotels. Moreover, recent recession has reduced the purchasing power of the tourists. As a result, the industry is facing slowdown in the guest arrivals. Opportunities Birchfield offers a pleasant and charming accommodation with light and spacious rooms. The establishment has a delicious and well assorted breakfast. The lodging facility has an opportunity to explore the scope of its services to attract its customers at a larger base. The Prospective Customer Base The region is known for its rustic appeal and natural beauty. The place has been a known as the tourist destinations for the adventurous people. However, it has been seen that the place is also a favorite destination for the corporate professionals who would like to spend their leisure days at utmost comfort. Apart from that, Birchfield can look at the local patrons who need the facilities for various events. It has been noticed that most of the tourists come from the Northern part of United States. However, Birchfield has an opportunity to tap the untapped market of Southern regions of US. The Objectives & The Issues The establishment aims to be a leading establishment of its kind. However, before achieving the same the organization needs to address its internal issues and come up with extensive strategies to beat the competition. Moreover, recently the company is experiencing a slowdown in its customer base. After doing certain investigation, it has been found out that the company does not have any extensive promotional activity rather than having one single advertisement on TV. However, its competitors in that region have been carrying out significant promotional activities. As a consequence, the establishment failed to attract the attention of the prospective customers. Apart from that, the establishment has been offering a package of bed and breakfast. As a result, they were losing on the guests who have been looking either for the accommodation or a fine meal. The Remedies Enhancing the Service Birchfield must try to be more than a great bed and breakfast. The establishment has to create a differentiated experience capitalizing on personal service, its unique location and rustic view of natural surroundings. The organization must put an effort to create an environment of pampered luxury which would attract the corporate professionals of United States. Expanding the exposure through the internet would help to introduce the region to people that are yet to be discovered. This year round paradise would allow the establishment to maintain a higher occupancy rate and enhanced profit amount. Birchfield is required to provide an environment of relaxation, fun and stress management to its guests while on vacation. The establishment will offer a comfortable accommodation with a cozy, family environment. Birchfield will be an establishment offering an environment which encourages its guests to meet people and at the same time maintaining their own privacy to enjoy their vacation. The establishment will create a climate of home, where guests become members of an extended family. Birchfield lodging establishment will open itself to the guests, allowing them to participate and share the luxury of a community, while still allowing the required level of privacy. The organization is required to enhance the taste and quality of its food. Birchfield has been offering a flavorsome and delicious meal to its guests. However, it has been found out that the region enjoys a substantial arrival of health conscious tourists. The organization can present its meal with delicious taste and enhanced food quality. To survive the competition the establishment is required to offer a pleasant, comfortable and luxury stay to its customers with a fine and healthy dining. The Structure The structure selected for Birchfield is both aesthetic and visually striking. The building of Birchfield is large enough to build a structure which is both architecturally and technologically sound. This building is in the central area of that region and already comes fully equipped with natural charm and plea. As a result, Birchfield do not need to incur huge cost while refurnishing the same. The interior will be done completely in knotty pine with open, split-level staircases. The rooms are huge enough to make enough arrangements for a comfortable life style. The guests will be welcomed with plenty of natural interior lighting. There is a small hill behind the building which also offers a support to its structure. The guests staying at the second floor can have a complementary walk in at the back of the house. Floor Planning The first level of the establishment includes front desk and lobby, a large kitchen, one housekeeper suite with bathroom, and one generic guest suite which is fully accessible by the physically disabled people. A main storage room with proper hygiene and equipments can also be considered at this level. The second level is supposed to include theme oriented guest suites along with the more generic ones. At this level there will a dining room, lounge, play station and a juice bar. The third level includes a number of theme oriented guest rooms which are mostly decorated keeping the adventurous people in mind. At this level, there will be a fully furnished lovely area of restaurant and bar. Alcohol can only be served at this area or else can be taken away to the rooms. However, wine can be served at the dining place and will be kept available for separate purchase in the gift shop section of the hotel. This has been done to diversify the customer base and attract the local patrons. Lodging and Room Amenities Birchfield bed and breakfast will specialize in exclusive theme-oriented rooms catering to explicit parameters of decor and luxury. Architecturally, the building is capable of more than twenty guest rooms in addition to the living space required by the operators. However, for the necessary ambiance for a premium experience the rooms should be of a specific size and living capacity. Birchfield bed and breakfast will be a true getaway to escape hectic urban lifestyles of and a place where fantasies and dreams can come true. Each of the following rooms will have specific themes completed with matching lightings and music. Each room will be attached with a private bathroom area and contemporary hot tub amenities. Each room is also designed for a simulated gas operated fireplace to give the place a distinguishing look and a perceived value-added interior. Fine Dining Dining at Birchfield will be an experience, not merely an amenity. The kitchen will be supervised by an experienced chief chef with a number of qualified assistants. However, the menu will be decided by the chef by taking assistance from the head of food and beverage department. All the guests will be served complimentary breakfast. However, it has been noticed that there are a large number of local and tourist patrons who may look for fine dining. Considering these guests, along with traditional bed and breakfast package the establishment is recommended to offer its rooms and food individually. Birchfield can extend its customer base by offering a fine food experience to the local patrons. The rooms are sound with modern technology. The guests can avail the internet facilities from their rooms. Apart from this, the rooms are furnished with modern technology and furniture. Apart from these all, the establishment has been offering their banquet halls for wedding and other events. For this offering, the organization has focused on the local patrons as they are most likely to take rent of these halls to perform their own events. These banquet halls are of modern decor to meet the requirements of the customers. Charming accommodation with light and spacious rooms with television and internet access is required to be at the central of the hotel’s attraction. A delicious and well assorted meal is provided individually by the hosts of this establishment. The lodging establishment can also arrange some adventurous sport events specifically for its guests. Apart from that, the guests can avail transport facilities at competitive pricing by contacting the front desk staffs. The hosts are ready to help them out with travel related queries and assistance. Birchfield will create a ‘home away from home’, a home more beautiful and lavish than their originating destinations will ensure the rerun of many customers. Pricing The pricing of the rooms have been done in the following way. For the theme oriented rooms, the price has been kept between $ 300- $ 400 per night. However, for the generic ones, the price range is bit less $150 - $ 250 per night. The pricing for special events and holidays are priced at a different price range. The additional revenue of the hotel is supposed to come from the gift shop section, sales of crafts and specialty wines. Marketing and Promotional Activities Service and ambiance at Birchfield are expected to set the establishment apart from the competition. The establishment is required to be a leisure destination, not simply a place to stay. Solid marketing will surely help the bed and breakfast establishment to accomplish that goal. The customers expect quality service and will evaluate the service with a fairly high level of expectation. Generally the bed and breakfast lodging industry is accelerated by word of mouth, and repeat business is the most significant requirement of any business in the hospitality sector (Reid & Bojanic, p.54). The establishment is expected to live up that reputation and several creative-marketing ideas have been thought of to accelerate the business. Networking and referrals are pretty significant for the organizations operating in the service industry. It has been noticed that the competitors of this bed and breakfast establishment have been involved in extensive marketing and promotional activities. In comparison to the same, Birchfield has only one advertisement aired on the television. This is why recently the establishment has been losing on prospective customer base. An aggressive marketing is required to communicate the pros of this lodging establishment to the prospective customers. There are few ideas outlined below. These ideas are feasible enough and can be accomplished with comparatively little effort using resources already at the disposal of Birchfield. Birchfield is expected to develop strong advertisement and promotional activities to make it more visible to the prospective consumers. The organization can organize certain sports and adventurous events especially for the guests. The establishment will focus on the local media to cover the events. Press releases and sample stories will be provided to local media outlets to intensify the advertisements. Selected celebrities can be given free stays on a limited basis to help generate word-of-mouth. The establishment will perform cross advertising in the local attractions to spread awareness about the services. The promotional activities will take both print and digital media into account. The establishment will also flaunt off its services on the local cable and radio spots. Telemarketing agents will be considered to sell of their services to the local patrons and the outside tourists. These all are supposed to be able to attract the prospective customer base. This is era of telecommunication and information technology. The establishment is recommended to develop its own internet site. Heavy internet presence will be developed through its own site as well as through other famous sites mostly surfed by the prospective customers. The establishment will be in close contact with selected travel-writers and travel agents. Even they can be given free stays on a limited basis to aid the referrals. Bookings will be aided by connecting with tourist and convention bureau, brochure distribution programs to aid the booking programs. An affiliation with the professional association of Innkeepers will be encouraged for better media coverage. The online confirmation system of the establishment will be used to secure reservations. As the establishment has been experiencing a considerable tourist arrival from the urban areas of United States, Birchfield is required to frame up its marketing and promotional activities keeping in mind the urban people. The establishment can advertise its services by distributing leaflets in the corporate or shopping malls. Apart from that, the organization is required to manage its relationship with the travel agents, tour and travel organizers to accelerate the tourist arrivals. Overall, the organization is required to carry out an extensive marketing plan to make people aware about their services and offerings. It has been noticed that a considerable number of tourists come from the Northern regions of United States. However, the Southern region of US is yet to be untapped. The bed and breakfast establishment put its efforts to tap this untapped market, while carrying out more aggressive promotional plans for the Northern region. Expansion Strategies There are some small lodging facilities in this region which have the blessings to be established in the beautiful places of Honolulu. Birchfield can acquire these to expand its business at a large scale. This has been recommended considering the projected increase in the tourist arrivals in the next years. Moreover, in such a way Birchfield would be able to remove some of its competition. At the same time, by acquiring these small lodging establishments it can compete against the large establishments in this region. Financial Considerations: The Outcome Birchfield has a strong financial condition. For the renovations and expansion this bed and breakfast facility will require $1, 00,000. The estimated average fixed cost is estimated to be $ 60,000 annually. The establishment is recommended to optimize its inventory level to minimize the inventory handling expenses. With the expansion and renovations, the establishment is expected to earn a profit of around $ 1, 50,000 annually. In the next year, 60 % growth has been anticipated in the number of guest arrivals. However, peak and off-season will have significant impact on the annual earnings. As Birchfield is recommended give enough effort to build its market position among the local patrons, it is expected that off-season revenues will be enough to break even during that season. Conclusion Birchfield Bed and Breakfast has been in operation for the last two years. However, recently it has been experiencing a slowdown in its guest arrivals. As a consequence, in the last year the company experienced a considerable amount of loss in its operation. It is high time for the company to pull off all its resources to enhance its services by offering its customers a comfortable luxury experience with all required amenities. Moreover, the establishment is required to be more focused on its marketing and promotional activities as the competition in this industry is real high. It is very much important to make people aware of the quality services, delicious food and beverages offered by Birchfield. The establishment must drive its resources to carry out a well developed marketing plan to retain its customer base and at the same time to ensure new arrivals. Reference Reid, D. R. & Bojanic, C. D. Hospitality Marketing Management. John Wiley & Sons, 2009. Read More