HRM 240 Marketing Plan The Four Steps of the Marketing Plan No matter what approach is taken, a marketing plan consists of four basic steps (see Exhibit 2): Conducting market research Selecting target markets and positioning the property Establishing objectives and action plans Reviewing and monitoring the marketing plan To ensure a better understanding of these steps, we will be using the fictitious Rolling Green Resort as a case study (see box titled \"The Rolling Green Resort Case Study\"). 1 Step #1Conducting Market Research Before you sell any product, you must know its strengths and weaknesses in order to determine how to best promote it. This is where the first step of the marketing plan, conducting market research, is invaluable. In selling the hospitality product, it is not enough to know what your property has to offer; you must also determine what competition you face and what trends in the marketplace may affect future sales and marketing efforts. In order to determine how to best position your property in the marketplace, it will be necessary for you to gather research information so you may conduct a: Property analysis Competition analysis Marketplace analysis The findings from these three types of research will be used as the foundation to plan the most effective marketing strategies for your property, and will set the stage for the targeting of specific market segments and the development of marketing strategies designed to sell the property to each. Property Analysis. A property analysis involves an honest appraisal of exactly what a property has to offer. Since this analysis will form the base of information from which virtually every marketing and advertising decision will be made, any error in judgment here will almost certainly result in mistakes in your marketing and advertising strategy. In order to most objectively judge a property, input can be solicited from a variety of sources, including employees and guests. You might also try to picture the property as if you are seeing it for the first timebecome a guest yourself and experience the property from a guest's perspective. Later, as you analyze other parts of the property, put yourself in the place of a meeting planner seeing the property for the first time. Strengths and weaknesses analysis. While it may seem superfluous, this analysis should always be done in writing (even if you feel you know the property inside and out), and should include all of the property's revenue centers. This analysis should detail the property's strengths and weaknesses, provide columns for comments on areas that need improvement, and specify cost estimates and completion dates (see Exhibit 3). 2 3 The first place to start is with the property's physical appearance. Since customers, including meeting planners, form a negative or positive first impression from the appearance of the property, and appearance often plays a large part in sales promotion, a hotel with a neat eye-catching appearance (see Exhibit 4) is a step ahead of a more lackluster competitor. First, the entrances, grounds, and exterior construction should be assessed with a critical eye for improvement. What is the overall general appearance? Is there ample parking? Are outside areas well-lighted and secure? The exterior of the property should be evaluated in terms of traffic flow, accessibility, eye appeal, and compatibility with local surroundings. Next, make a detailed, room-by-room and facility-by-facility inspection. Are rooms clean and in good repair? What type of dining facilities are offered by the property? Are kitchen facilities modern and up to code? Do you have an on-premises lounge or nightclub? Does it offer entertainmentand what type? What is the condition of the common areasare they clean, inviting, and well-lighted? Put yourself in the place of the meeting planner. In terms of facilities, what do you offer? Location? Adequate transportation? Ample meeting space and up-to-date audiovisual equipment? Meeting rooms that are free from distraction? A highly trained staff? A welllighted and secured environment that will make women attendees feel more comfortable? Hotels vying for convention business should assess their function space and what equipment they have available or can obtain from local suppliers. It is wise for a hotel to prepare a printed list of its group-function business equipment, including the kind and quantity available and the locations of the specific pieces of equipment. This itemization can serve both as a selling tool when presented to a meeting planner and as an inventory list for the property. In some cases, properties wishing to target a specific market segment, such as the meetings market, have designed special facilities to appeal to their target markets (see box titled \"Facilities That Meet the Needs of the Meetings Market\"). While this type of renovation may not be practical for all properties, the property analysis can give valuable clues as to what property modifications are needed to attract specific business. And what about recreational amenities? Do you have indoor/outdoor swimming pools? Do you offer easy access to golf and tennis? Do you have an exercise facility? How good are your recreational amenities in relation to those of your competitors? Your inspection of the Rolling Green Resort has shown the exterior to be charming and in good repair, although the wide veranda could be made even more inviting with the addition of comfortable chairs. The guestrooms, ballroom, and kitchen facilities are modern and adequate, but you are determined to make better use of the wasted space on the lower level. Your tour of the grounds has shown that the driveway to the property is in need of minor repairand perhaps wideningand that parking facilities are minimal. The pool area is large and clean, but is probably underused; its size and convenient proximity to the kitchen facilities offer excellent possibilities for food and beverage functions. In addition to taking stock of the physical aspects, the property analysis also takes into consideration such intangible factors as the property's reputation and quality of service. Reputation includes how the property is perceivedis it classified as an inn, hotel, or resort? Is it considered upscale, budget, or family-oriented? How would guests describe the 4 atmosphererelaxing, bustling, or business-like? As far as the Rolling Green Resort's reputation, it is perceived as modern yet charming, butunfortunatelythe property seems to be a well-kept secret. Aside from a directional sign on the highway, nothing has been done to promote the property. There is a definite need for you to get the word out. A property's location can also be a selling point. Is it within easy access to major highways or airports? Are there other historic or scenic attractions or major amusement centers close by? Are there annual events that draw people to the area? The Rolling Green Resort has the advantage of being located in a particularly popular vacation areaand can capitalize on a number of scenic attractions. Its location on the river can also be a selling point. Two drawbacks come immediately to mindit is a considerable distance from the nearest airport, and, because of its location off the highway, may not be accessible year-round in inclement weather. Business status and trends summaries. The last part of your property analysis helps you assess your property's current position in the marketplace by examining the property's sales history and current guest base. This part of your research, known as the business status and trends summaries, traces the property's past, present, and potential operating statistics, including sales patterns over a three- to five-year period (see Exhibit 5). Such analysis helps to track the \"soft spots\"low business periodsinherent to hospitality sales, and can disclose sales areas that need improvement. These charts show the history of occupancy and activity by month for all profit centers. Without this, it is difficult to determine objectives and action strategies for the coming year. In addition to looking at room statistics, it is also necessary to determine the makeup of your property's business mix. How old are your guests? Are they singles, married couples, families? Middle-income, high-income? Sports-minded? Drinkers? This information, which is extremely useful in planning marketing strategies, can be obtained by designing a guest questionnaire and perhaps offering an incentive (a free dinner for two, a week-end at the property, etc.) to ensure guest participation. The box titled \"A Guest History Analysis\" illustrates a sample guest registration card that is typically used to obtain guest information, but more extensive surveys can also be developed. This type of analysis of guest history and future prospect information is referred to as consumer research, and it can take many different forms. At the Conrad International Centennial in Singapore, Theresa Choo, director of sales and marketing, says part of her research includes talking with current guests, an often overlooked source of ready information. She says: In the elevator, I introduce myself and try to find out what the guest needs. I invite ten guests a week to have tea with me and ask them if what we are giving as value-added perks is actually what they want.2 Another key area for research is the geographic origin study. Not only is it important to know who your guests are, but also where they come from. Identifying \"feeder cities\" or \"catchment areas\" can result in a more effective use of time and money. The smaller the geographic areas used as categories, the better. It is more useful to know, for example, that a guest came from Chicago than to know that a guest came from Illinois. This breakdown by 5 cities and even zip codes can help the property to direct advertising to those areas which are most likely to produce guests. Geographic and zip code information can come from a number of sources, beginning with the guest registration card. Other sources of information include responses from advertising or direct mail campaigns. This information should be updated regularly to avoid having to deal with thousands of guest registration cards at one time and to ensure that the correct areas are being targeted. Competition Analysis. In addition to analyzing your own property, it is of prime importance to know your competitors and evaluate their strengths and weaknesses in comparison with your own so you can emphasize your strengths in areas where you know competitors are weak. It is not enough to be customer-oriented; you must also be competition-oriented. Generally, your competitors are comparable properties in the immediate area that offer similar facilities and room rates and service similar markets. In the case of large convention hotels, however, the nearest competition may be hundreds of miles away (for example, the Rosen Centre Hotel in Orlando might be competing with the Cloister Sea Island in Georgia for an East Coast meeting). Your own competitive set will usually include four to six properties that are the most important competition for your hotel. Two key forms that are used to assess the competition are the competitive rate analysis form and the competitive analysis need fulfillment by market segment form (see Exhibits 6 and 7). To completely and effectively assess your competition, fact sheets should be prepared to compare: guestroom and function room rental rates; banquet menu pricing; function room square footage and quality of meeting space; typical number of guestrooms allocated to groups (called the group room allotment); and services offered to meeting groups, i.e., audiovisual, airport shuttle, express check-in, and so on. A competition analysis should be done at least quarterly, and information gathered from a variety of sources. The most useful source is a firsthand look at the competitor. Walk the properties of competitors. For an even clearer picture, actually staying at competitors' properties is essential. Converse with their guests, talk with competitor's employees, pick up their literature, and study their advertising. Also, check your competitors' reader boards every day (some hotels display \"welcome\" messages on their outside signage; others have listings of the day's meetings on boards near the lobby or meeting areas of the hotel). Tracking your competition's meetings business provides an opportunity to prepare a game plan to land these groups in the future. If it is not possible to check the competition's reader boards on a regular basis, a reader board service is offered by the Knowland Group (www.knowlandgroup.com). You can also get literature from convention and visitors bureaus and your local chamber of commerce. Check the telephone directories, hotel chain directories, and travel guides to try to determine just what features are being promoted and to whom. Internet searches can also yield extensive information. Most convention hotels host Internet sites that you can access for a fast, comprehensive analysis of competitive properties. Smith Travel Research is another site that can be used to provide competitive intelligence and historical trends. For a fee, the firm will provide industry data customized to your local market and competitive set. This analysis of the competition can help to point out market segments that are not being serviced at your property and can provide valuable clues as to how you can change 6 your own marketing strategies to generate additional business. As far as the Rolling Green Resort is concerned, there is obviously no local competition for rooms, but this is a rare case in the hospitality business. In most locationseven small townsthere is at least one other competitor (and oftentimes many more) that may offer a different type of product or may target a market segment that your own property is overlooking. The Rolling Green Resort has identified the Arrowhead Conference Center and the Hilton Inn as competitors. Both are located in the outskirts of St. Louis. Marketplace Analysis. The marketplace analysis, also known as a situation analysis, evaluates the environment in which the property operates (see Exhibit 8) and the property's operating status in that environment. The marketplace analysis identifies factors that can affect business, such as the cost of travel and government regulation, and also includes research on the environment around the property. This latter research can include the population and projected growth of the local community, the economic trends being experienced by local industry, the traffic counts for nearby highways and airports, recreational amenities and attractions in the area, and unique area activitiessuch as fairs, festivals, rodeos, etc.that attract crowds. Not all of these factors will affect your property the key is to recognize those that do impact you, and, where possible, capitalize or counteract them. Data for the marketplace analysis can be found in census information, industry reports, periodic updates from the chamber of commerce, and even the local newspaper. Becoming involved in community affairs is another way to learn what is going on in the area and how trends may affect business. In the case of the Rolling Green Resort, the marketplace analysis may reveal that there is little going on in terms of population growth and projected changes in the economy. If you were to find out that a light industrial park was proposed nearby, however, that information would greatly impact your property. While the research phase of the marketing plan is very important, the crucial exercise is not to merely collect data but to interpret property, competition, and marketplace information. Bill Watson, former senior vice president of marketing for Best Western, advises that \"researchers must put less emphasis on data and more on the interpretation of the data. They must work toward turning data into useful information. Collecting data for its own value is like collecting stamps. It's a nice hobby but it does not deliver the mail.\" The key is to \"boil down\" the statistical information gathered in order to select appropriate market segments and to help form strategies for reaching them. In the case of the Rolling Green Resort, for example, your research has shown that you could indeed service at least some portion of the meetings market if you were to formulate a plan to better utilize the \"wasted\" space on the main level. It may be viable to turn one or two rooms into attractive conference rooms, or to add a business center or other facilities such as an exercise room or child-care centerto attract this additional business. As you can see, the research step of the marketing plan can be an involved and timeconsuming process. Therefore, some hotels hire outside experts to assist with the research step of the marketing plan. Outside consultants provide an opportunity for you to get a fresh look at what the property is doing to maximize sales. When the Ritz-Carlton Kapalua on Maui wanted to validate its sales strategy, for example, it brought in David Brudney, a hotel industry consultant. 7 He reports: I spent an hour each with every member of the sales and marketing team and half a day with the GM; I spent a full day visiting the competition.... Then I came back and did a report on why group business had dropped. I interviewed incentive houses and validated why incentive business had dropped. 3 Brudney says his evaluation included questions dealing with account coverage, handling the SMERF market, and group sales strategy (whether proactive calls were made, how many sales calls, how many site inspections). He also evaluated where leads were coming from, what hired parties the hotel was using to generate leads, and whether or not salespeople were receiving proper direction. 8 Sample HRM 240 Case Study: Tartine Bakery Tartine Bakery is located in a bustling neighborhood in the Mission District in San Francisco. The area boasts historic storefronts and the bakery is on the corner of a busy intersection. While the bakery holds national acclaim, they do a great deal of business with people who live in the immediate neighborhood. The current bakery boasts a large amount of bread orders, but they would like to increase their orders of other products. Also, they do a good business for lunch, but they would like to increase the amount of traffic for people coming in to have a pastry for breakfast or snacks. The current property has great visibility and the location is well known locally. The centralized location is easily accessible from many parts of the city. There is currently no outdoor seating to take advantage of mild weather. The kitchen is big enough to handle the current baking needs, but would need improvement or expansion if the business were increased significantly. The current owners would like to expand their business and customer base and are open to ideas for improving their current location, or opening a new kitchen for catering orders if they feel it can be profitable. Be sure to only use it as a guide and not copy the ideas. Sample HRM 240 Property Analysis: Tartine Bakery AREA STRENGTHS Exterior Good visibility from street Big inviting windows No outdoor seating Exterior could use paint/sprucing up Dining Room Minimalist design is aesthetically pleasing Easy to maintain seating and flooring Display cases encourage spontaneous purchases Well organized kitchen is up-to-date and clean Demonstration-style window to street allows customers to see how the bread/pastries are made and how clean the operation is National acclaim with James Beard awards Considered a local treasure Centralized within the city in a popular neighborhood Seating is not as comfortable for people to stay and lounge Kitchen Reputation Location WEAKNESSES Limited growth potential in current kitchen Neighborhood location makes it less visible to tourists Not particularly accessible from other parts of the city Be sure to only use it as a guide and not copy the ideas. RECOMMENDATIONS Look into city regulations for outdoor seating. Revamp exterior with new signage/paint Convert a small area of seating with more comfortable chairs to encourage guests to linger and order another pastry Research feasibility of renovating/expanding current kitchen facilities vs. creating new catering kitchen space Consider targeted advertising to draw tourists, especially food-centric travelers Research feasibility of catering kitchen in a different neighborhood that could supply orders to those who cannot easily access current location Your Marketing Plan Assignment One These are the four steps to complete your Marketing Plan. Each week you will work on a portion of your plan. At the end of the semester a complete product. What to do and where to startSelect one out of three of these places. (You may pick your own place if you wish but you may need to \"create\" some details to make it work for this class.) Hotel: http://www.theseagatehotel.com/ Restaurant: www.trippsrestaurants.com in Raleigh, NC Bakery and shop: http://www.sugarandplumm.com/about-us.html or http://www.sugarandplumm.com/ Events and Catering: http://www.mitchellscatering.com/ Read in detail the factors to consider when creating a marketing plan in PDF file name Hospitality and Restaurant Marketing (pages 11 to 14) You will create your own mythical marketing plan for this class. You will work on it week by week and at the end of the class you will have an awesome marketing plan. Read World document name Part One of Marketing Plan HRM 240 Marketing Plan and read pages 1-5 (stop at Business status and trends summaries). Create a case study like that of the Rolling Green Resort on page 1. Note- You will have some information online but you will have to create or invent information too. Prepare a Property Analysis on your place of business like the one on page #. Note- You will have some information online but you will have to create or invent information too. Submit the case study and the property analysis is the assignment area