Expanding Hotel Business Market Plan

Expanding Hotel Business

Market plan

Marketing refers to developing and implementation of a plan to identify customers' demands and satisfy them. The major contents and focus of the plan is to carry out research to identify the demands of customers and designing an appropriate marketing strategy to meet these demands. The plan provides direction for marketing and promotional activities that aim to boost sales of the business. A marketing plan for hotel business will help to define and analyze past internal marketing decisions and their impact. The marketing plan will also provide a full understanding of the external environment in which the hotel business will be operating.

Situational analysis

Long beach, California hotel provides hotel and restaurant services to the local people and tourists visiting the beach. The hotel targets the increasing number of tourists in the area and other people both middle to high-level family market group. The target group for the hotel also includes younger to older generations looking for adventure in downtown long beach to Disney land. The current network of distribution covers a small area around Long beach to central Loss Angeles. Expansion of the business aims to cover a large geographical area within Southern California and beyond. With the growing number of tourists in South California, The hotel business develops a new marketing plan that would incorporate and accommodate a better portion of the market. Current sales are low in comparison to the growing number of visitors. The number of services and quality of services offered do not meet the expectations of customers to the maximum. With these in mind, the hotel business develops a marketing plan that will cater for the demands of customers and ensure increased sales and revenues. The situation analysis answers the question, "where are we?" And "where are we going?" (Green & Williams, 1996)

Market summary

The hotel business operates and offers its services in Long beach California. The hotel is strategically located at the beach, which is a one-hour drive to central Loss Angeles. This strategic position of the hotel provides easy access to tourists in Southern California and people seeking adventure in Disney land. The population of southern California, which provides a market for the hotel business, is composed of both young and older generations. The young generation makes up a good portion of this population. This market demographic provides a ready market for the services of the hotel especially for the young generation looking for adventure at the beach and Disney land.

The market demographic consist the increasing number of tourists of all ages who tours Southern California. These demographic variables provide certain characteristics that describe customers according to their respective needs and purchasing power (Moore, Pretty, Palich & Longenecker, 2008). The needs of the market are growing and ever changing depending on trends, taste, and preferences of customers. Current market needs vary from one generation to another. The needs of the older generation vary from those of the younger generation. New market research on the needs of the customers looks forward to meeting the expectations of customers. The hotel business market has high capacity for growth. This positive perception towards the growth of the market relates to the growing number of tourists in South California and people looking for adventure in downtown Disney land. Growth of the market is high due to the strategic location of the hotel from central Loss Angeles.

SWOT analysis

This gives a determination of the hotel business success based on its strength, weaknesses, opportunities and threats. The plan seeks to identify the best opportunities to pursue and weigh the business' ability to handle the identified opportunities. According to Dibb and Simkin (2008), an honest assessment of strength and weaknesses helps in decision making about which opportunities and markets to prioritize. SWOT analysis combines both the internal and external factors under situation analysis. The business counts strength as an internal factor and the business capability. This capability creates a competitive advantage over other hotel businesses. The strength of the hotel includes a good reputation and brand name in the local marketplace, access to distribution networks and qualified workforce. In SWOT analysis, weaknesses are also part of the internal factors.

Weaknesses in the Long beach hotel include poor customer relations, and high costs of operations. Opportunities and threats constitute the external factors in situation analysis. Opportunities in the external environment come through research and market analysis. Desire for development and constant research leads to various opportunities that are beneficial to the business. Opportunities may arise through adoption of latest technologies of carrying out tasks. Unavoidable and at times unpredictable external factors can present threats to the business. Factors such as internal terrorism and insecurity in the region are threats to tourists and a threat to the business. Emergence of a new competitor with efficient ways of doing business is also a threat to the business. The business has little or no control over external threats.

Competition

Long beach hotel faces competition from various hotels operating in the same region. Brand name and market share give Long beach hotel a competitive advantage over its competitors. Strategic location and good staff to customer relation are also advantageous to the success of the business. Research by Berry and Wilson 2001 indicate that the most classic of the competitive edge is the one based on proprietary technology and protected by patents. The business creates a unique service delivery methodology that can keep its services and product relevant to the market for a long time.

Keys to success

The keys to success in the hotel business are offering of quality hotel and restaurant services to the locals and tourists of South California.

Critical issues

Internal factors

In order to penetrate into the target market, Long beach hotel should use various promotional tools like personal selling and attending trade shows in order to promote the image and the name of the business. Advertisements through trade magazines and tourist guides will also facilitate penetration into the target market. It is important to manage and maintain a good relationship with the clients of the business. Critical factors for the management and maintenance of customer relationship include a good understanding of the business needs of the customers. Disclosure of the objectives and goals of the hotel will also help to maintain a good relationship with customers.

Good internal relationships between the management team and subordinates are also critical for the success of the business. The methods of communication and integration of technology are fundamental. Ability to reach consensus on matters of importance also facilitates a good relationship with customers. A good understanding of the needs of customers enhances this relationship.

External factors

Macro environmental factors likely to affect the Long beach hotel include a rise in internal terrorism. This will interfere directly with business activities due to a reduction in the number of tourists. A poor economic situation that leads to an increase in the costs of leaving affects movement of people and ability to afford the business services. There is also intense competition in the hotel industry with each striving to promote its brand name and services.

Market strategy

Goals or objectives

The objective of the Long beach hotel is to provide quality and efficient hotel and restaurant services in a serene and peaceful environment. Under the market plan objective, business needs to build awareness of its services and products by introducing itself as a customer centric hotel and service provider. All energy targets focus on pulling clients to the business and increase sales. Promotion and advertising activities should target potential clients. Strategic form of advertising and promotion is the objective of the plan. Advertising through specific channels that directly reach the target market helps to reduce unnecessary expenditure on media that are not effective. According to Gilligan and Wilson (2003), effective marketing reflects on the ability of the management team to embrace the changing market structures and then reflect it in the marketing strategy. To be effective is to do the right thing while to be efficient is to do the given thing right.

Financial objectives

The focus of the plan is to gain exposure in the market place for hotel and restaurant services. Long beach hotel financial year begins in April, giving enough time to pursue the marketing activities before the peak of the season. The goal for 2013 is for the Long beach hotel to reach a target of 40,000 visitors spending a minimum of 2 to 3 nights at the hotel. This aims to make total revenue of $10,000,000 and $80,000 in marketing and promotional expenses. This will be a 5% increase in sales revenue from the year 2012 and a 4% increase in profit margins.

Target market

The Long beach hotel focuses on targeting the increasing number of visitors in Southern California and other people looking for adventure in downtown Disney land. The aims of the hotel are also to cut down the prices of its services in order to capture a larger percentage of and greater range of customers. The hotel seeks to promote its strategic location and incomparable services to boost its sales to the majority of people and tourists visiting Southern California. Its proximity to central Loss Angeles also gives an advantage to the hotel to target the urban dwellers seeking recreation facilities outside the central city.

Marketing programs

Pricing of services and products offered by the Long beach hotel is under management and control of market conditions of demand and supply. Prices are elastic depending on the season of the year. During peak periods, prices for accommodation services range from $100 to $400. These prices aim to meet the demands of a bigger range of people. The prices vary depending on the capability of a customer. Price charge depends on the facilities available in the hotel rooms and other services that a customer may require such as dinner and breakfast. Charges such as $400 per night are inclusive of dinner and breakfast. The market plan is keen on the pricing strategy adopted bearing the impact it may cause to the business. Pricing mechanism considers the rates of charges by competing businesses and formulate a pricing system will create a competitive advantage. Pricing decisions that are strategically or even tactically from a position of strength are highly rewarding (Stapleton & Thomas, 1998).

The distribution channels for Long beach hotel include the use of online channels such as social networks and websites. Online channel of distribution is fast, cheap and covers a wide geographical area. Getting feedback through online channels is also easy. The hotel has a website in which it describes the services and products offered.

Advertisement

Long beach hotel targets to use billboards that offer direction and information about the location of the hotel. Advertising will also make use of monthly magazines and articles especially in the tourism sector. Personal agents will use brochures and posters that give detailed information about the services and products of the hotel. In a bid to expand sales and capture a wide market, television and radio advertisement will assist to create this awareness.