The External and Internal Environment Pertaining to the Logan hotel - Case Study Example

Type the company name] The Logan Hotel Marketing Plan Report Student Name: 5/3/2010 Executive Summary The Logan hotel will delve into the business of hospitality and for which an initial phase of marketing planning is reported through this draft. The hotel chain which is proposed to be located at major sites in an airport district has a very distinctive positioning of being a ‘Best cost provider’ as its business strategy. The sole criteria of providing an indeed word class experience in terms of excellence in service and ambience along with reasonable pricing will put it on the map of competing brands in the hospitality business. The infrastructure and interior decor of the hotel will represent an up market trend combined with convenience of availing its facilities and at a reasonable price, will make it a luring prospective choice among most business travellers as well as regular family visitors. The management at The Logan Hotel is quite radical and supportive of the diversification strategies and innovations. Also, its leadership truly believes in innovation and takes pride in serving the customers. The competitor analysis suggests that the hotel will do well amongst a plethora of either high end or low end hotels such as to strike a median between the two. The marketing activities consisting of a mix of promotional exercise as well as outdoor advertising has been depicted keeping in mind the target market of the Logan hotel. The total marketing budget would stay within the prescribed limit of $30,000. Table of contents Introduction.......................................................................................................... 4 SWOT Analysis.................................................................................................... 5 Strengths................................................................................................... 6 Weaknesses.............................................................................................. 6 Opportunities.............................................................................................. 7 Threats....................................................................................................... 7 SWOT Table............................................................................................... 7 Market Segmentation Strategy.............................................................................. 8 Business positioning in respect to competitors’ analysis....................................... 9 Marketing Mix......................................................................................................... 10 Marketing Activities.................................................................................................11 Conclusion............................................................................................................. 12 Recommendation....................................................................................................12 Introduction The Logan Hotel is a new venture in the hospitality industry at a small scale initially. The mission of The Logan Hotel is to ‘Serve People’, and not just products. Their vision is to continuously utilize its brand’s huge potential and diversify (extend hospitality) to other foreign countries also. For The Logan Hotel, their aim is to provide a quality experience to their customers at affordable prices. They will make their prime offerings as ESH&V which is Excellence in service, hygiene and value for money, therefore signifying up-market Positioning while offering good and reasonable prices as they intend to keep their Check-in tariffs as low as US$114 for travellers and US$102 usual single occupancy. The symbols used by them such as its logo ’h’ to be highlighted at places like entrance, fountain, a swimming with the sigh ‘h’ and hotel chairs will create a strong marketing communication. Right now, it is in ‘Introduction’ phase of product life cycle. The infrastructure of the Hotel and the entire complex is highly contemporary in design with an obvious focus on convivial functionality throughout. One will observe that public spaces such as the lobby/reception area, the bar and the lounge have been decorated with soft furnishings, neutral colours and natural textures such as wood, leather, glass and stone. A room can be booked at the lobby entrance itself by using one of the automated self-cheek-in stations in the lobby, or one can have it pre-booked by phone, fax, e-mail or on the Web - www.loganhotel.com - for slightly less money. All rates are fixed. Since this is a service industry, the product (deals with a service of providing room) on offering is perishable in nature. Here, the revenue is lost when the hotel room is left empty for a night. The Logan hotel aims at adopting a ‘Revenue Management System’ so as to address this issue. Revenue management technique (Kumar, 2006) will solve the challenges of segmented market, fixed capacity, perishable inventory, low marginal cost, advanced sales but no shows and demand fluctuations. This will be attained through market segment identification, demand forecasting, allocation and overbooking. SWOT Analysis In order to determine the external and internal environment pertaining to the Logan hotel, SWOT analysis is to be used as this is one of the most reliable tools in assessment of the same. The following portion of the report will illustrate the application of SWOT analysis on our company (The Logan Hotel). The company is yet to start its operations. Strengths: The biggest strength of The Logan Hotel is its business proposition of being the ‘Best Cost Provider’. It is going to be positioned as although an upmarket hotel but with pricing that offers value for money. It will also increase its efficiency through a proper revenue management system (as elaborated in the business description segment above). Its other strength is its location near an airport district which increases their accessibility. It will offer guests the choice of 50 well-furnished rooms but rooms and suites which are comparatively bigger in size at the same cost. The choice of locating the hotel near an airport district is basically to attract the guests at the very onset. Attractive and inviting premises will work as a perfect magnet for tired guests looking for a convenient, luxurious stay at affordable cost and without having to travel much to reach the hotel. Its location will be one of its competitive advantages. Its unique brand communication in the form symbols used by them such as its logo ’h’ to be highlighted at places like entrance, fountain, a swimming pool with the sign ‘h’ and hotel chairs will create a strong marketing communication. symbols used by them such as its logo ’h’ to be highlighted at places like entrance, fountain, a swimming pool with the sign ‘h’ and hotel chairs will create a strong marketing communication. The above is accompanied by an infrastructure which is highly contemporary with an obvious focus on convivial functionality throughout. Thus, its word class infrastructure, plethora of facilities and affordable cost structure are its strengths. With its reasonable cost structure, diversification strategy and a franchise mode of operation, it can attract a wide range of middle income developing nations with huge tourist potential. Apart from this, Logan hotel will also house its own brand restaurant promising good quality food, dining room and coffee bar. Weakness: Its lack of room service and mini-bars can turn out to be one of its weaknesses. As per Qu, Ryan & Chu (2000) who conducted a survey of travellers all over the world so as to explore those attributes of hospitality industry which affect their quality of service. In this study, one of the major attributes was also the quality of staff performance and quality of room service provided. After the advent of globalisation, the emphasis on providing personalised services to the customers has become one of the crucial areas of competition (Recklies, 2001). Similarly, absence of bar facility might also disappoint visitors as the emphasis these days is on providing everything under one roof. Thus, the inconvenience to be caused to travellers/visitors in terms of no bar facility would be one of the weakness of Opportunities: The Logan Hotel is targeting is targeting business travellers during week and families, young adults on weekends. The Hotels around the location chosen for the hotel majorly consists of either very grand or exclusive hotels which charge $34,000 per night and, in terms of the cheapest hotel would be those which charge as low as $55 per day but which does not provide the facilities of a good service. Thus, there is huge opportunity for The Logan Hotel to capture the huge market of middle income tourists and travelers who look for good staying experience at reasonable prices. Threats: The location of the airport district as finalised for the Logan hotel is very useful from the business perspective. However, since such areas are still into the development stage in terms of residential accommodation and other necessities and provisions like schools, hospitals etc., it would be difficult to attract the staff and manpower for the Hotel. There would be apprehensions among those migrating from other areas to this place for employment in the Hotel owing to the still crude nature of the locality. Thus, the money to be spent to attract talent and skilled staff would also be on the higher side. SWOT Table: Therefore, the above elements can be listed in a tabular format as below so as to provide a summary: Strengths Weakness Upmarket facilities but with value for money Lack of room service Nearby airport district Lack of Mini-bars Good Infrastructure and restaurant   Revenue Management System Opportunities Threat Opportunity to capture the huge market of middle income tourists & travellers looking for good staying experience at reasonable price Difficult to attract talent or skilled manpower due to the location being non residential thus, making it difficult for them to migrate Market Segmentation Strategy Since marketing segmentation basically aims at segregation of market certain commonality or affiliation (Thomas, 2007), we have also followed a segmentation strategy so as to redirect all our marketing forces towards our targeted market segment only. We focus here on business markets as well as consumer markets. The Logan Hotel will usually target the following as their core Target Market: (a) Business travellers during week and (b) Families and young adults on weekends where Attractive 'family adventure weekend' and 'summer' rates are made readily available. At the very onset we have divided our target market into business travellers and families (middle income groups) with focus on weekdays and weekends respectively demonstrating a time based segmentation. For the focus on business travellers (might be in large groups for corporate visits) on week days, geographic segmentation with an urban inclination is to be proposed. Media segmentation will also be done so as to reach the target groups only. Also price segmentation in terms of a slight price variance on weekdays and weekends will solve our price segmentation strategy also. Business positioning in respect to competitors’ analysis The Logan Hotel has its business proposition as that of being the ‘Best Cost Provider’. It is going to be positioned as although an upmarket hotel but with pricing that offers value for money (offering Excellence in service, hygiene and value for money. It basically refers to providing value for money to the customers by integrating good product attributes at a cost lower than the competitors aiming towards best (lower) costs and prices compared to rival’s offering products of comparable attributes. The Logan Hotel is up-market while continuing to offer good value for money. The Logan Hotel in order to position itself as the best cost provider will have to strike a balance between the above two extremes. The major competition that The Logan hotel will be up against in terms of the most expensive hotels will be ones like four seasons which charges $34,000 per night. And, in terms of the cheapest hotel would be those which charge as low as $55 per day. The Logan Hotel in order to position itself as the best cost provider will have to strike a balance between the above two extremes. Its strategy for gaining competitive advantage (Porter, 1990) over its rivals is that of ‘Best Cost Provider Strategy’ (Porter, 1985) where it offers differentiated products at a price which is affordable and provides value for money. It basically refers to providing value for money to the customers by integrating good product attributes at a cost lower than the competitors aiming towards best (lower) costs and prices compared to rival’s offering products of comparable attributes. The following map will summarise our projection of Logan Hotel against its competitors: Marketing Mix The 4ps of the marketing include Product, Place, Price and Promotion. As far as The Logan Hotel is concerned, the business of Hotel management is the Product they identify with. More so, it is a service industry which requires the other Ps like People, Process and Physical Evidence. The Place here denotes the location of the hotel. The Logan Hotel has planned its location to be situated near an airport district. Its Process which is well taken care of right from offering guests the choice of 50 well-furnished rooms but rooms and suites which are comparatively bigger in size at the same cost to the facility which boasts a four-star rating from the Swiss Hotel Association, reflects a desire to move The Logan Hotel up-market while continuing to offer good value for money and takes care of the third ‘P’ of Price also. The choice of locating the hotel near an airport district is basically to attract the guests at the very onset. Attractive and inviting premises will work as a perfect magnet for tired guests looking for a convenient, luxurious stay at affordable cost and without having to travel much to reach the hotel shows that the Physical evidence of the hotel will also stand as its strength. The focus on affordable price clearly shows their concern for people; however, they do not provide room service, so it is one of their weaknesses. Marketing Activities (based on SWOT & Target Market Analysis) As analysed from the SWOT, the major strengths of The Logan Hotel are its Upmarket facilities but with value for money, nearby airport district, and Good Infrastructure, own brand restaurant, dining room & coffee bar. These strengths are to be highlighted through the marketing activities keeping the target audience in mind. Advertising and promotion expenditure is necessary within regular intervals since the hotel is in the initial introduction stage of the product life cycle. This will aid the process of creating awareness about the facilities and services offered by ‘The Logan Hotel’ and in what way it is different from both high-end costly hotels and low-end low quality hotels. The investment in increasing the awareness about our hotel and creating its visibility in the market will give us return on investment. Expenditures will be varied base on economic environment, competitor action and the strategies of the hotel in each period. Investing correctly in this regard would enhance our overall periodic sales. Promotional exercise would be to provide package offers on weekends so as to attract vacation travellers. These are mostly families and we are targeting the middle income families. They thus fall in the category of price-sensitive customers and package offerings which provide discount options in case pre-booked at a conveniently prior date serves our purpose of both managing demand fluctuation as well as forecasting (Kumar, 2006). On the other hand, the business travellers who are time-sensitive (ready to pay extra price but for the flexibility of booking room on an urgent business in the last minute) can be accordingly charged a premium for instantaneous service providing. Advertising for visibility is required for the Logan Hotel in the form of outdoor advertising such as signage and billboards. The logo of the hotel can be effectively utilised to communicate the brand identity as is already being done in the physical evidence by using several symbols which denote the hotel logo, in and around the hotel for example swimming pool, entrance arcade, chairs etc. are all in the shape of the logo. The location of the billboards (Wysong & Beldona, 2004) will be of prime importance so as to attract the right customer. Since their cost per thousand is quite low, also they reach thousands of people every day, it is the best advertising option for the Logan hotel so as to stay competitive. Special signage can also be used in strategic locations such as airports and on the highways around the hotel so as to bring into the consciousness of travellers, the existence of the Logan hotel in the vicinity. Conclusion This report has created a platform for the marketing activities to be initiated for the Logan hotel. The description of business of The Logan along with an analysis of its strengths, weakness, opportunities, threats, competitor’s analysis and location analysis, aided the development of certain marketing activities that may be undertaken within the ambit. The hotel chain which is proposed to be located at major sites in an airport district has a very distinctive positioning of being a ‘Best cost provider’ as its business strategy. The sole criteria of providing an indeed word class experience in terms of excellence in service and ambience along with reasonable pricing will put it on the map of competing brands in the hospitality business. Recommendation The suggested marketing activities in the paper are a result of the analysis of several environmental factors governing the existence of the Logan Hotel. However, a pilot test is essential so as to ensure the viability of going ahead with the marketing plan on a large scale. Also, apart from the business environment study of The Logan Hotel, it is also required to carry out a cultural analysis since cultures and lifestyles are one of the most prominent areas in which countries differ as identified by Hofestede (Hofstede, 1980). Further, a strong Business Plan needs to be developed for The Logan Hotel which should consist of a thorough analysis and documentation of its products to be offered, financial feasibility (after making all the expenses will it be able to recover costs and the investment required), its operational details (especially the hotel crew in a foreign country), the legislations and government rules in the market it is planning to start its operation in. Read More