Sales and Marketing for Pods Meetings of Shire Hotels - Business Plan Example

Sales and Marketing Plan for PODs meetings of shire hotels Introduction The meeting POD brings unrivalled choice for the people who need confidentialand private work and meeting spaces (Lewis, 2011). The meeting POD is designed to increase the efficiency and lucidity of a meeting session. It only occupies half the space of the traditionally built meeting rooms coupled with screen based products. There are many attributes that makes meeting POD to be a unique structure and one of them is the ability to position itself within or outside the building. A number of companies make use of structural paneling system which ensures its long life, reuse, relocate and provides company with the opportunity to refurbish (Paley, 2002). In addition, the structural paneling system allows a company to mitigate the redundancy and reduce waste. With this unique combination of function and form, a company operating in this industry has the ability to offer customers with wide option of choosing and planning their workplace and at the same time facilitate them to significantly extract greater value. Hence, on a pure financial basis, it can be stated that Meeting POD solution can bring significant operational saving to a business house. Marketing Plan The marketing plan will be prepared for AZTEC hotel based in Bristol. A marketing plan is responsible for clarifying the key marketing elements and mapping the direction, activities and objectives of the business and its employees (Afuah, 1998). The marketing plan, on a broader plan outlines a firm’s business plan (Paul, 2008). The business plan on the other hand is accountable for stating how a company will transform its idea into a commercially feasible proposition (Agarwal, Erramilli and Dev, 2003). However, a marketing plan focuses on the issues related with the 4P’s: product, place, price and promotion. In special cases such as when a company is involved in service sector, the marketing plan also takes into account the other 3P’s of marketing: people, physical evidence and process. According to Anderson, Grude and Haug (2009), the success of a company is greatly dependent upon the 7P’s of marketing. As a result of that, it is the duty of a company to devise the most relevant strategies to gain success in the market place. In the following section of the project, the marketing plan for Aztec Hotel regarding their meeting POD will be formulated. Marketing Vision Meeting PODs inside the hotel lobby are intended to offer customers with meeting facilities. The aim is provide a relaxing and disturbance free area or the business personnel to hold meeting sessions. In addition to holding business meetings, the same can be also used for the purpose of taking interviews and short discussion (Pavitt, 2005). The meeting POD is ideal solution for those seeking a whole range of benefits such as privacy, sound-controlled environment and obviously refreshments. AZTEC hotel with their meeting POD solution wants to exceed the expectation of consumers by offering the best solution and valuing the client to the highest possible extent. Marketing Goals The following will be the marketing goals for AZTEC hotel that will be tracked through quantitative means. 1. Recover 50% of the initial investment of £75000 by the end of 1 year. 2. Achieve 75% customer retention rate by the end of 1 year. 3. Obtain 90% customer satisfaction rate. 4. Increase lead conversion to 40% by the end of 1st year. 5. Earn at least 75 referrals 6. Reduce the cost of operation by 20% by the end of 1 year and thus increase the profit margins. Market Description Occupying only about 50 square feet and with the ability to accommodate 4 -6 people, the concept of meeting POD is really valuable and feasible. A standard meeting POD can be installed in a day and is therefore considered to be an effective business element. It also mitigates the chances of disturbances and at the same time the privacy is increased rapidly. One of the biggest advantages to initiate a business of Meeting POD in UK is that the market is still developing and the number of competitors is considerably less. Hence, a combination of quality product and superior customer service will greatly help AZTEC hotel to flourish with this business. The hotel is located at the heart of Bristol’s business hub and this allows greater coverage area for the business. Considering the location of the business and the product being offered, the market size is estimated to be significant. In other words, the company will be able to fulfill and meet the intended objectives with the current size of the market. In addition, the locality in Bristol is turning into a business hub and as a result of that it is expected that the in the near future more business houses will establish their offices here. This further increases the opportunity of the company to increase the size of business. In the next segment of the study, the industry will be analyzed and the internal environment of the company. In doing the same, the study will make use of Porter’s 5 forces analysis and SWOT analysis. PORTER’s 5 Forces It is important to analyze the industry before making or devising the operations or marketing strategy. In this segment, the study will analyze the industry by making use of Porter’s 5 forces analysis: - Bargaining Power of Buyer: - The bargaining power of buyers refers to customer’s ability to bargain and reduce the prices of the products. The bargaining power of buyer is assessed to be low in this industry due to the less numbers of providers. With less numbers of providers, the customers have limited choice. Bargaining Power of the Suppliers: - The bargaining power of the suppliers refers to the ability of the suppliers to increase total cost of production. The Bargaining Power of the Suppliers is assessed to be low owing to the fact that the raw materials needed to establish meeting POD is numerous in numbers. Furthermore, since it is a service industry, there is no need of continuous procurement of raw materials from the suppliers. Threat of New Entrant: - The threat of new entrants is assessed to be extremely high. This is because of the fact that the start-up cost is considerably low and there are hardly any legal regulations. Apart from that, this is basically a new business concept and many of the established business houses would like to explore the opportunities present in this segment. As a result of that the probability of new players entering the industry is increasing the level of competition is very high. Threat of Substitutes: - As such there are no commercial substitutes of a meeting POD. This is probably the only service which provides opportunity for the business houses to hold meeting sessions. However, to a certain extent, the in-house meeting rooms within the offices premises can be adjudged as a substitute of Meeting PODs. Hence from the commercial and business point of view the threat of substitutes is assessed to be low due to the lack of any proper substitute. Intensity of Rivalry: - The intensity of rivalry within this industry is assessed to be moderate. If the intensity of rivalry is being assessed from the broader aspect i.e. considering the total UK market, the intensity of threat will be high owing to the fact that the number of such service providers is numerous in numbers with little differentiation among them in terms of pricing or the service offerings. SWOT Analysis Before finalizing the target segment and devising the relevant strategies for the business, it is important to evaluate the strengths, weaknesses, opportunities and threats of the company. The analysis of the same is presented below. Strengths One of the major strengths of the business is that it will be backed by the strong brand value of AZTEC hotel. This will allow the company to generate a sense of trust among the target customers. The location is another key strength for the company. The rich history coupled with modern amenities is a core competency. Greater Financial stability will allow the company to do experiments in the initial phases. Weaknesses It will be difficult for the company to target the customers through traditional modes of advertisements. The market will be constrained to the locality of Bristol only. The company has limited budget to invest in this segment of the business and as a result of that certain areas needs to be overlooked. Opportunities With the meeting POD as a new business segment, the company has the opportunity to target different genre of customers. Besides, the company has the opportunity to open the similar kind of business in other commercial areas of the country. This will help the hotel to target more customers and increase the revenue. Threats The only major threat for the company is the increasing level of competition. The area comprises of a number of hotels and private houses who can initiate similar kind o business. The startup cost is considerably low and hence the threat of new entrant is high. The analysis of the industry and company’s strengths, weaknesses, opportunities and threats reveals that the opportunities in this industry are endless. Since the industry is basically new, the company has the opportunity to gain the first mover advantage. However, it is necessary for the company to select the intended audiences and devise strategies accordingly. In the next segment of the study, the target segment will be defined and relevant strategies of marketing will be elaborated. Target Segment & Ideal Customer Based on the analysis of the strengths, weaknesses, opportunities and threats of the company, it is obvious that the company has the strength to initiate the business on a large scale. It is important to target the ideal customer because it increases the scope of business and is directly proportional with the revenue generation of the company. The target customer for the company will be business people who came for short meetings, interviews and discussions. Business People (Short Meetings) – People from the business segment will be targeted who requires short meetings. For example, a meeting session between manager and its team lead. The frequency of such meetings is comparatively more and can be a great revenue stream for the company. Business People (Interview) – Often people requires place where they can conduct the interview session and this can be a recruitment and selection interview or can be internal interview session of the organization. Business People (Discussion) – Apart from interviews and short meetings, companies also required to hold discussion session for the purpose of devising their business strategies and planning the courses of action. In this context, meeting POD can be an appropriate solution. Moreover, the duration of such meeting is usually more and hence charging on an hourly will bring more revenue for the company. The hotel is situated at the heart of the city which also covers the business park area in Bristol. The area is surrounded with lots of companies and offices and this increases the chance of catering to a large base of customers. Marketing Mix In this segment of the marketing plan, the study will underline the overall marketing plan for the new business venture of AZTEC hotel. The marketing mix will comprise of the 7 elements as stated previously. Since the company is in the business of offering services to the consumers, the significance of people strategy, physical evidence and process strategy is very high. Product Strategy The company seeks to develop Pod meeting facilities within the premises of the hotel. The facility is developed to target the business customers who seek privacy and disturbance free meeting sessions. One of the major rationales to come up with this business idea is that the total volume of business people using hotel lounge and bar lounge for their short meetings, like interviews, short business meeting, discussions etc are increasing at a robust rate. According to Baker and Sinkula (2002), product is the most essential element of the marketing mix of a company. The availability of diversified product offering gives company the chance to offer an additional support to those people in the form of meeting PODs. The following will be the attribute of the meeting PODs for the company: - The PODs will be available in square, round or rectangular configurations. It will have bright lights installed and fitted with false ceiling. The total number of PODs will be 5, 1 pod is for 6 people, the other for 5 and two for 4people, 1 for two and the last for 3/4. The PODs will be double glazed which will offer extra privacy and will be also sound proofing. The looks will be stunning so that the customers can be attracted easily. The body will be made up of fiber glasses and fitted with curtains. This will greatly enhance the privacy. One of the best attributes is that along with the allotment of the POD(s) to the business houses, they will be provided with unlimited fresh refreshments. The refreshments will be water, tea, coffee and soft drinks. In addition, the company also seeks to offer snacks in the near future. It is believed that a combination of the POD and add-on service offerings, the company is likely to achieve the goals in the near future. Price Strategy Pricing is another vital element of the marketing mix (Forrester, 2000). A company carries out the pricing of a product or a service by considering various elements and dimensions of the business as well as the product. According to Balmer and Gray (2003), a company has the liability to do pricing on their own way. However, a company should make sure that the products are priced sensibly and is accepted by mass. A company can set the prices of the products either to increase the profitability and realize more margins or to grab more market share by keeping the prices low (Hage, 1999; Love and Bullen, 2009). The company will apply competitive pricing strategy in order to remain competitive in the marketplace. In addition, since the industry is growing, pursuing competitive strategy will allow the company to remain competitive in the long run. The pricing strategy adopted by the firm also act as a tool that helps in defending the competition and also acts as an entry barrier. Depending on the needs, demands, supply of the market, behaviors of the consumer a company regulates and sets the prices of the products. Some companies also consider the use of seasonal pricing i.e. they set price depending upon the season. For example, woolen garments are priced high during the winters owing to the fact that the demand will be high. Hence, finding the right pricing strategy is important in running a business successfully in the marketplace and also ensures its long term presence. The recommended pricing for the company is as follows: - Product Pricing Pricing Based on Person/Head £12 Pricing based on/hour/POD £10 In terms of the strategy to be undertaken, the company is strongly recommended to make use of penetration strategy. With penetration pricing, the company should offer the services at a low cost in the initial stages but as soon as the break even is reached, the company is recommended to make use of premium pricing. This strategy will not only allow the company to position as premium service provider but can also earn more profits. The company is however recommended to continuously improve their service offerings with the increase in price. Place Strategy The place strategy is responsible for the point of contact with the customers. Hence, it is obvious that the company needs to operate from a place from where they can easily target their audiences. Apart from that, a company should also make sure that the products are distributed properly and is accessible to the target customers. Initially, AZTEC hotel will operate from its location in Bristol. Since, the hotel is located in the business hub of Bristol; it is obvious that it will be a key competitive advantage for AZTEC. However, in the near future, the company is strongly suggested to install meeting PODs in other areas of the UK. Promotion Strategy According to Berger (2011), the capability of the products and services of a company remains unknown to the audiences. Echoing the same, authors such as Bryman (2008), promotion is probably the most vital element of the marketing mix. The author further explains that until and unless a company promotes a product in the market place, all the intentions and hard work behind its development goes into vain. A company should therefore actively promote their products or services as an initiative to fulfill their objectives. It has been observed that around 1/3rd of the total marketing budget are allotted to the promotional aspect. AZTEC hotel is offering meeting PODs, which will be installed within the lobby of their hotel. The product is somewhat unconventional and as a result of that it is obvious that the product will not be promoted through conventional methods. The recommended promotional strategies for the company are direct selling, where the hotel will have sales representative and they will visit the business houses and will pitch them about the offerings of the hotel. In addition, they will be also responsible for generating lead and converting those leads into potential prospects. The company is also recommended to make use of fliers & brochures and distribute the same to the corporate houses. Using business magazines to advertise will also be a wise decision for the company. In addition to the aforementioned promotional techniques, the company can invest some amount of money in the following media for promotional activities. Social Media advertisement Website Promotion Outdoor campaigning. The combination of the above strategies will help the company to target all the intended segments of customers efficiently. However, it is also important to unearth the efficiency or the strategies by measuring the return on investment. Lead Generation Plan One of the vital aspects of a business is to generate leads. The company is recommended to generate leads though the following ways: - Leads can be generated through personal visits to the companies operating in the adjoin areas of Bristol. In this regards, the company can demonstrate the offerings and can enlighten the customers with the offerings of the company. The next option of lead generation is personalized mails and telephone calls. This provides the company with the opportunity to directly communicate with the customers. In addition, word-of-mouth can also act as a key lead generating factor. However, this can be only achieved if the company has succeeded to offer the best quality services and achieved highest level of customer satisfaction. Core Strategy & Branding Elements The external marketing messages for the company will be seen as a key connecting element with the audiences. The aim is to offer customers an office environment inside the POD and to achieve it, the AZTEC hotel is recommended to focus on the quality of service and external communication medium and obviously the messages from the part of the company. The core strategy will be to retain the existing customers. As mentioned earlier, one of the strategic goals of the company is to achieve 75% customer retention rate by the end of 1 year. Hence, focus should be more on the retention of customers. According to Christensen and Raynor (2003), the cost of retaining an existing customer is comparatively less than to attract a new customer (Dalal, 2007). The core branding elements that will be used by the company for the purpose of making the company visible among the mass and also enhancing its credibility in the market place are logo, tagline, images and colures. The company should separately design a logo and a tagline for their new venture. In addition, the advertisements through brochures and fliers must be colorful and should contain original images. A probable tagline that can be used by the company to endorse the brand is “A Meeting Environment like No other” or “Connecting Minds and Thoughts”. Core Marketing Materials In order to effectively reach the target audience, AZTEC hotel needs the following marketing materials will be used. Website Online and offline banner ads Use of sales brochure in order to serve as hand-out and direct mail Email discount Magazine advertisements Sales Forecasting The following is the sales forecasting for the company. The objective is to achieve 50% of the initial investment at the end of the 1st year. On the basis of that following is the forecasting. Initial Investment (in £) 75,000 Target Return at the end of 1st Year (in £) 37500 Meeting POD Type 1 Ability to accommodate 6 People Meeting POD Type 2 Ability to accommodate 5 People Meeting POD Type 3 Ability to accommodate 4 People Meeting POD Type 4 Ability to accommodate 2 People Pricing Based on Person/Head £12 Pricing based on/hour/POD £10 Targeted Unit Sales Type 1 Type 2 Type 3 Type 4 Person/Head 25 30 35 40 Hour/POD 25 30 32 37 Revenue From the Products/Month   Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Type 1 550 561 572.22 583.6644 595.3377 607.2444 619.3893 631.7771 644.4127 657.3009 670.4469 683.8559 Type 2 660 673.2 686.664 700.3973 714.4052 728.6933 743.2672 758.1325 773.2952 788.7611 804.5363 820.627 Type 3 740 754.8 769.896 785.2939 800.9998 817.0198 833.3602 850.0274 867.0279 884.3685 902.0559 920.097 Type 4 850 867 884.34 902.0268 920.0673 938.4687 957.2381 976.3828 995.9105 1015.829 1036.145 1056.868   2800 2856 2913.12 2971.382 3030.81 3091.426 3153.255 3216.32 3280.646 3346.259 3413.184 3481.448 Total Revenue Earned after 1 year 37553.85 Hence, from the above table it can be seen that the company will be able to fulfill the objectives. Conclusion Without a proper marketing plan, the success of a company is matter of apprehension. Companies nowadays are focusing heavily on the requirements of the customers and devising plans accordingly, so that the company succeeds in satisfying the customers. In this consultancy report, the client, AZTEC hotel based in Bristol UK, has been recommended with the most relevant marketing plan. The company has been strongly recommended to emphasize on the external communication messages and focus on lead generation. Apart from that recommendations were also made in terms of the pricing and promotional aspect. AZTEC hotel is also recommended to make use of the other related marketing elements so as to achieve the business and marketing objectives. For example, the application of the branding elements such as logo, tagline, color and theme of the brand can be very much useful in increasing the value of the brand in the market place. Reference List Afuah, A., 1998. 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