Industry Environment Issues - Case Study Example

Assessment of industry environment: Micro Environment: The customers for the business range between the 30-50 age group and middle to upper management. During weekends, the clientele is mainly the 30-50+ age group, middle to upper management with their families. There is a perceptible, business-leisure mix that the hotel would cater to, given the fact that the year long crowd, swings between being dominantly business to being dominantly leisure seeking. On weekends, this swing is very apparent. During weekdays, 70 per cent crowd is business, on weekends this number shrinks to 30 per cent. A lot of them are inclusive of a network of suppliers and buyers along with shareholders and interested parties that work in the local capacity. In terms of the micro environment, the business is doing well, given the fact that the overall occupancy rates are on the upswing, despite the decreasing rates over the weekday crowd. There is a problem however, with the public awareness index, given especially the fact that this has witnessed a progressive decline over the past quarter. The idea therefore is that there is a need to increase brand recognition and recall. In terms of logistics the firm is doing fine, the retail equations are well laid out and the overall strategy of operations if working well. Macro Environment: These are in essence the political, economic, social and technological forces operative in the country at any given point in time that are not within the organizational control of a given business but have a bearing on the manner in which the business is run and the outcomes of the business practices nonetheless. In this case, the macro environment has its share of challenges and opportunities. The economy is increasingly on the upswing, which means that there is scope for growth. There is a problem of substitutes, and the competition is stiff. The marketing and advertising spends of the competition such as Palace are testament to the fact that there is a growing trend to aggressively market the the hotel. Also, a shrinking hospitality market in the backdrop of the recession is a problem. The biggest problem that the hotel would face in lieu of the competition is with respect to the fact that all three competitors provide conference oom and business grooming facilities. This is a must, given especially, the healthy mix of tourist and business crowd that the hotel is trying to attract. These hotels are all located in the city centre Strengths: 1. Growth in leisure activities in recent times, travel seen as necessity and not just as leisure 2. Government support for industry in the shape of low duties 3. Reviving global and local economies post recession 4. Variety o products on offer: Seven categories in all 5. Location-near sea beach, attracts tourists all year round. 6. Multitude of services provided-pubs, bars, restaurants Weaknesses: 1. Difficult to introduce new products, lower scope of innovation 2. High dependence on domestic demand 3. Stiff Competition from other budget and luxury hotels in the area, 4. Difficulty at single hotel brand creation 5. Strict rules regarding and management and distribution of hospitality business 6. Long period of promotion  7. No leisure activities, usiness Services, Conference Facilities or Meeting Rooms Opportunities 1. Government support to business development and extension 2. Easy availability of raw material, getting consumer attention is easy 3. Well developed supply and logistics chain 4. New industry establishment created large amount of job  5. Booming hospitality market inevitable in recovering economy Threats: 1. Economic climate-economies could be perceived as recovering and not yet completely recovered 2. Large amounts of people are not very open to the idea of hotels, hospitality and its relevant slump of recession is not back to the upswing of previous markets 3. Increasing competition could be a problem if quality is compromised. 4. Problem of finding trained professionals in the sector-manpower crunch-the kind of advertising budget allocated by competition (Palace) would be difficult to replicate. Conclusions from SWOT Analysis: While it would be correct to state that there are a large amount of problems that are currently facing the hospitality segment, it would also be correct to assume that the sector is slate to undergo another cycle of boom, given especially the fact that travel is a habit, and the economic slump had lessened and still not stopped travel. Also, in the current scenario, hospitality, is not just applicable for leisure travelers, there is the instance of the variety of services that a standard hotel would offer-the more varied the nature of the service that the hotel is able to offer, the more would the kind of clientele and business it would attract. The conclusion therefore is that while there are problems, the sector is ripe for fruition. Marketing, sales and pricing activities and effectiveness: A situational analysis of the hotel experience that the business aims to sell would show a number of correlated variables that assume importance simultaneously (Reuters, 2007). These include sale of the products on the menu, targeting audience through appropriate channels, coming up with incentives other than just the drinks being served to attract the crowd. These are factors that are essentially not in control of the hotel audience. The idea would essentially be aimed at the creation of a more personalized experience. The only sustainable source of product advantage is a superior product development process. Advantages based pnm a brilliant design, fortunate timing, a comptitor5’s misstep, or even a lucky break cannot be sustained (Cooper, 2001). Such factors cannot be relied upon to create successful products over the long term. An inferior development process would make advantages based on such factors short lived. The idea here would therefore, be to first and foremost, enhance the availability of the sea-side and pitch that as the USP of the hotel. This would mean that the hotel would be seen as    Individuals with diverse product needs have heterogeneous needs. From the positioning map you can see that Palace, Mariner’s and Park are all positioned very close to each other indicating the enormous amount of competition through price and quality. All three hotels segment themselves towards new and growing families, as they are huge sector of the market, with much money to be made from.  It must be remembered here that one cannot expect homogenous consumer behavior from the members of the same social class. In fact it has been suggested that a diversity of family situations and a nearly unbelievable range in income totals are contained within each class. There is therefore a considerable variation in the way individuals belonging to the same class realize class goals and express class values. The best way to outline a strategy would be to outline the 4 Ps- Product, Price, promotion and Place (Kotler, 2006). First, one needs to outline the basic focus of the marketing campaign. The strengths of the hotel are in its service, the location and the fact that the prices are more competitive that those of its competition. Ideally, the hotel wouold save on advertising through traditional, and the costlier means. The focus of the pricing will be on varied rates during weekdays and weekends. Also, the idea will be to give out complimentary service, for example the usual room would get a buffet lunch free, most of this would end up attracting the leisure crowd. These would be the service which would necessarily need to be quick and friendly, the ambience, which is fresh, uncluttered and inviting and the menu itself, which is different and unique from the run of the mill standardized food experience being offered by the competition operating in proximity (Peppers and Rogers, 1993).   The basic idea behind the marketing program would be to set up the name of the hotel as being distinct and unique (Seth, 2001). The idea is to sell the product as the experience of light eating, and quality food. The product is not just the menu on offer but the facilities add on values that the café would offer the customer. The places to be targeted need to compliment the basic strategy. The second strategy will be to utilize social networking websites like Twitter and Facebook, to attract the young crowd and build up a network with barely any costs. Third, a pamphlet and poster campaign in nightclubs. A Jazz Bar, could be set up within the hotel increase visibility at very little input costs. Comment cards will be at each table and will be collected at the register. Suggestions for new or improved meals will be sought, as well as feedback on service and the staying experience. References: Peppers D and Rogers M, 1993, The one to one future: Building Relationships one customer at a time, pub, New York Doubleday  Seth G, (2001). Permission marketing: Turning Strangers into friends and friends into customers, pub, New York, Simon and Schuster p65 Kotler P, Adam S, (2006). Brown L and Armstrong G, Principles of marketing, Edition 3rd, pub, Prentice Hall Pearson, Australia. Kotler, Phillip, Jain D and Maiscincee S, 2002, Marketing moves: a new approach to profits, growth, and renewal, Pub, Boston, Harvard Business Press, p26  Read More