MRK 233 Services Marketing

Spring 2021

Case Study: Marketing a New Boutique Resorts: Juveniles Versus RejuvenationTop of Form

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Summary:

This case study is about the Spring 2022 relaunch of Sam and Lisa Bracken's boutique resort, The Foothills located in Lac des Arcs, Alberta. Lac des Arc is in the foothills of the Rocky Mountains and is less than an hour's drive west from Calgary. The Foothills is a day spa that offers fine dining, spa services, horseback riding and yoga classes but limited overnight accommodation (definitely not fancy or luxurious). Sam and Lisa are planning to expand their business to include overnight lodging, with 16 luxury cottage suites. The mission for The Foothills is to leave guests feeling rejuvenated after a day long, relaxing, adult getaway at their boutique resort.

Sam and Lisa have considered including families/couples with children in the relaunched boutique resort but are worried that allowing children to stay overnight will negatively affect the atmosphere, and, therefore, the quality of all the guests' experience. It would also require new services to occupy the children during the day while their parents were enjoying the spa activities. However, Sam and Lisa do not want the resort to come across as being anti-child, thereby damaging their carefully built reputation and image.

Introduction: The Foothills Resort

In the quest to provide a unique experience and earn guests' loyalties, many independently owned hotels and resorts are making decisions to set themselves apart. This case study is about entrepreneurs, Sam and Lisa Bracken, and their resort - The Foothills in Lac des Arcs, Alberta. It's a boutique spa day resort built on land that has been a summer getaway for the past two decades for the Bracken family. Sam and Lisa, above all, are concerned with providing an environmentally responsible option for resort travel. The Foothills has recently been converted to a sustainable model, insulated with recycled denim, painted, and stained with eco-friendly products, and outfitted completely with low impact appliances.

The new cottages for the resort lodging service are spaced around naturally growing trees and have been equipped in much the same way as the main building. The high-end accommodations will provide a very comfortable experience for spa guests at the side of the main entrance there is a helicopter pad for guests' and corporate use.

Just to the side of the main building, the Yoga Barn is fully equipped and ready for use by guests and locals. The northern windows look out over an expanse of untouched land, and the morning sunrise is a favorite time to practice. The heated floors in the Yoga Barn ensure that users can comfortably focus on their yoga. Sam and Lisa want The Foothills to relax and revitalize guests from the stresses of everyday life.

The challenge that Sam and Lisa have now is finding a way to market The Foothills boutique resort as an adult getaway without coming across as anti-child if it is restricted to adults only.

In addition to guest accommodations and activities, The Foothills offers meeting and conference space for a variety of business and personal uses. The area is fully equipped with the latest tech, and the staff offer breaks to teach workplace yoga to corporate groups - a method to improve common aches and pains encountered in most sedentary work situations. This focus on personal health as a means of improving business productivity has proven popular with many companies that use the retreat facilities.

The Foothills has a beautiful restaurant and serves gourmet meals to guests as part of the spa service. Sam is a former chef/restaurant owner and manages this.

Sam and Lisa are familiar with the idea of a dual income, no kids (DINK) families, so they conducted research to determine whether the DINK demographic was one which they could reasonably expect to capture business. Below is some of the relevant, key learning from that research. Some data made Sam and Lisa more comfortable with their strategy, while other data made them a bit uneasy. Some highlights:

Overall, the number of women without children in the North America has risen from 42 % in 2008 to about 59% 2018.

Among those who are choosing to have children, childbirth has taken place an average of 3.6 years later than in 1970's.

The birthrate among women in their 40's has increased to 86% in 2018 - up from 80% in 2006

This corelates to a higher level of education in older women having children later in life

In North America, the average age for first time mothers has risen to 29 years.

Also, the child-free travel trend has started to gain ground over the past few years, with more airlines and restaurants offering special travel programs and packages for couples.

At the same time, the number of families taking time away together as a family is expected to rise by nearly 25% by 2022.

Revenue generated by resort spas (both singles and families has increased 15% since 2017.

Boutique hotels and resorts are a relatively recent trend with untapped potential

A boutique hotel or resort is differentiated by its size (generally fewer than 150 rooms), unique style, theme and intimacy of service

Background Information:

The Foothill Resort opened in 2006 and is situated in a rural, somewhat secluded location outside of the hamlet of Place des Arcs, Alberta in the foothills of the Rockies, about an hour' west of Calgary on the Trans-Canada Highway. The combination of a peaceful, rural location along with the convenience of a major connecting highway provides an exceptional experience for the guests of The Foothills.

The Foothills with new overnight lodging service will open with a 'soft launch' in March 2022 to experiment and work out any issues before the official launch in May 2022. All the new chalets won't be completed until fall 2021 and the uncertainty of the Covid 19 pandemic makes a relaunch in 2021 unreasonable.

Owner and Company Background:

Sam was a professional chef who had previously owned a restaurant and Lisa became involved in yoga due to a back injury. As part of Lisa's recovery, she became immersed in the lifestyle that accompanies serious yoga practice. Lisa's interest and training in yoga led to opening the Yoga Barn with a restaurant - The Foothills. The first part of The Foothills that was constructed was a Yoga Barn to serve local yoga practitioners. As popularity for the Yoga Barn grew, Sam decided to pursue a full business in this area and added a restaurant, a spa, stables and riding and other amenities, and for years considered the option of expanding with lodging.

Sam and Lisa were fully committed to providing an eco-friendly resort offering the best in sustainable, local, organic, and fair-trade options. Additionally, Sam and Lisa worked to make the resort an important part of the Alberta economy by hosting frequent events in partnership with nonprofit organizations, offering open classes at the Yoga Barn, and doing special dinners and cooking classes. In terms of competition, Sam and Lisa considered competition for their resort competition close to zero as possible - there just wasn't anything to compare to Foothills in the area.

The Foothills catered to a clientele looking for a relaxing, country experience. Although there are hotels and motels in area, most would be considered rest stops, and none are in the same category as The Foothills will be. The closest competitor might be the Banff Springs Hotel, but Lisa and Sam believe that the Banff Springs is appealing to a much different and broader international target group.

Specific Areas of Interest:

The Brackens are a middle-aged, couple (no children) who value the atmosphere created by serene, calming environments. After living through the daily struggles of working high-stress jobs, they appreciate the opportunity to unwind and reset.

According to research that Sam and Lisa conducted, the additional cost of managing children in this facility would be a significant financial expenditure. With the impending expansion into lodging, the cost would exceed their budget. However, Sam and Lisa do not want to risk their image and potential sales by making a decision that could lead to the perception they are not a family-friendly organization.

Sam and Lisa are undertaking a large expansion of their business and cannot afford to alienate existing or potential customers; however, they must be realistic about the demographic they wish to serve. Their target of appealing to guests who need a break from everyday stressors lends itself to a different demographic than that of a resort that serves as a budget friendly option in a tourist town.

Decision Options:

Sam and Lisa Bracken have successfully built loyal clients with The Foothills, and a relationship with the surrounding community, including Calgary. They believe they are ready to expand into a full boutique resort offering food, lodging, spa treatments, conference rooms, riding, and a walking trail. But before The Foothills starts accepting overnight guests, Sam and Lisa must make a decision about their marketing plan, and the options:

1.Marketing the resort as an "adult, child free retreat" that does not provide any childcare or children's activities:

Marketing and promoting the resort in this manner would reduce the potential prospects. Allowing children overnight is something that Sam and Lisa could consider, but it goes against the vision of The Foothills, and they fear it would negatively impact their ability to provide their guests with the adult getaway relaxing experience they deserve.

2.Marketing the resort as an adult getaway, but also allow children 16 and over to stay overnight with their parent(s) and participate in programs during the day that all ages are welcome to attend:

The concern is this will deter couples without children and singles who want a truly adult getaway.

Questions:

As a paid consultant to Sam and Lisa you need to:

1.Provide your Marketing Plan Option Recommendation (which of the above 2 options - #1. Adult, Child Free Resort or # 2 Adults & Children 16 and older) along with your rationale about why you've chosen this option

2.In line with Question # 1, Recommend and describe the ONE PRIMARY target market segment in detail - Demographics, Psychographics and Behaviour.

3.Following up on your answers to Q 1 above, make a Positioning Statement for The Foothills as a full boutique resort. You can use the statement or the template style (remember if you are using the statement format you are not writing ad copy and it needs to include all three elements and be brief - don't make a paragraph).

4.To be successful Sam and Lisa need to develop a marketing plan that is specific about what Marketing Goals and Objectives they need to establish at the outset.

Outline 2 relevant Marketing Goals for the first 2 years with new accommodations (what are you trying to achieve for the first 2 years

and 2 relevant Marketing Objectives - (what do you need to achieve in the same time period to achieve your Marketing Goals)

-to help I have added some examples of general Marketing Goals and Marketing Objectives unrelated to this case as an Exhibit at the end of this document along with a link to a very brief article about Goals and objectives. Also use your class lecture notes (week 12).

5.Outline your Marketing Mix Strategy - The 7 P's for The Foothills. For each element briefly state the following:

1.Core Service Product: State clearly and concisely what the Service product is. Provide details about this service and what the package would include in the future - any changes, improvements, upgrades recommended in your plan

2.Price: State clearly and concisely what the price strategy is - economy pricing? Value pricing? premium pricing? competitive pricing (vs competition) all-inclusive pricing? Free?, extra charges for upgrades? Free trials etc. also identify any changes that you are recommending

3.Place/Distribution: State clearly and concisely what the distribution access points will be - e.g. how can customers book a stay

4Promotion:

a)State clearly and concisely what the communication strategy will be e.g - use a combination of traditional and digital communications/advertising platforms or Social media only, or PR + Influencers campaign, along with sales promotions, or employee training and education programs, etc. How do you intend to promote The Foothills.

b)Identify if you also need to communicate with any support/trade audiences that might have influence on your organization's service - e.g.tour operators, airlines, media, publicists

5People: State clearly and concisely the requirements for the staff recommended. Think about the task and what characteristics are required. Also, any differences in the wait staff for the restaurant or other services on site.

6Process: State clearly and concisely the service process

and any changes, upgrades that are being implemented. (think about the flow of the typical day - is it regimented or is it casual letting the guests chose the pace and activities. And indicate the interaction of staff in the process

7Physical Evidence/service scape: State clearly and concisely what the physical environmentfor The Foothills looks like, feels like, smells like- facilities, rooms, welcome/entrance. It should reflect and be consistent with your target group and position strategies.Are you adding new elements, improvements to achieve a new/different look and feel.