Download - Individual Marketing Assignment
1
School of Business Management
and Finance
Module Name Marketing Management
Assignment For 1 organization in the industry of your choice write a
marketing plan to boost up profitability of the productservice
Submitted by Reshma Dobee - 140665
CohortMBAG14B-Part time
Date of Submission 17th May 2015
2
Acknowledgement
The accomplishment of this project would not have been possible without the help and support of a number of persons who have contributed in some way or another
to this Assignment
My warmest thanks go first to our Module Convener Mrs Shyam Seebun for his constructive criticisms and advice
Appreciation is also due to many people who have helped me throughout the pro-ject often without knowing they were doing so
Last but not the least our gratitude goes to my family and friends for their support and encouragement to the success of completing this assignment
Without help of the particulars mentioned above we would have faced many diffi-culties while doing this project
3
COMPANY DESCRIPTION
COMPETITIVE ADVANTAGE
STATEMENT OF MARKETING OBJECTIVES AND FINANCIAL OBJECTIVES
SWOT ANALYSIS
MARKET RESEARCH
SEGMENTATION
TARGETING
POSITIONING
MARKETING MIX
STRATEGIC PLANNING APPROACHES
CONTROLS AND EVALAUTION
REFERENCING
4
COMPANY DESCRIPTION
Raol Guest House (current situation)
Your Origins Can Never Be Replaced
Lying on the north east coast of Mauritius Raol Guest House is a luxurious guesthouse comprising of 50
rooms at Poste de Flacq It offers 247 guaranteed hospitality care and good time Its personnel are always
at the guests‟ disposal to make their time a memorable one during their stay at the Raol Guest House
Raol Guest House guesthouse was born in 2013 It was created under an eco-green program which aimed
at giving back to nature its importance in our customers‟ lives and makes them experience its surprising
benefits Its slogan ldquoYour Origins can Never be Replacedrdquo which means returning to our roots be closer
to who we are by being farther from what makes us who we are not describes best the way the guesthouse
is built and maintained You are sure to feel one with nature and be overwhelmed with the amount of ac-
tivities available at the guesthouse
The guestsrsquo areas
The layout of these areas must ensure a high level of personal safety and security for the guests and their
property and also enable to render effective service
Public guests areas
Public guests‟ areas are for the exclusive use for the guests and their visitors The following places are re-
garded as public areas which are available in the guest house
The entrance hall
The reception area or office also called the bdquofront desk‟
The guests waiting area close to the reception
Guests toilet
The dining room or breakfast room
Smoking areas and
Halls stairways landing and passages
The purpose of a guest house is to provide temporary accommodation for families while they are on travel
in Mauritius It also provides a safe comfortable and cost-effective alternative to hotels and other tempo-
rary residences when such facilities are non-existent limited unsafe or excessively overpriced There are
other facilities available in the guest house which are
-Breakfast Lunch amp Diner
-Car Rental
-Taxi on request
5
Raol Guest House offers Hospitality services like accommodation food and beverages business service
and leisure
ACCOMODATION
Each room is decorated in tropical pastel paints prints and handcrafted furniture equipped with cable
satellite TVair-conditioningceiling fans hair dryer direct dial telephone bath-tubshower and a balcony
Standard rooms are configured with either a King-Size bed or two twin beds in the sea and Mountain
View the road view has two double beds The guesthouse is built on two levels featuring a living room
with a bar area and a restaurant on the floor The 15 Junior Suites were fitted with a double bed or two
twin beds as well as a living room area with a sofa that converted to another bed
The meal plans are most flexible Bed amp Breakfast or accommodation only as all units is self-catering
with dedicated housemaids to prepare your meals according to the guests‟ wishes Creole European or In-
dian dishes are possible The maids also look after the washing and ironing and take care of any grocery
shopping if so required Fresh food gets delivered daily at current market prices
Moreover Raol Guest House carries a Full Fire Certificate which some guesthouses‟ do not provide
The Raol Guest House still thriving in 2013 after 1 year in business would like to boost up its image by
adding more services to attract more customers and thus expand its clientele In addition the restaurant
serving breakfasts and menu dinners upon request is open to outsiders and is very much appreciated by the
neighbourhood
Mission Statement
ldquoTo ensure that each guest receives prompt professional friendly and courteous service To maintain a
clean comfortable and well maintained premises for our guests and staff To provide our guests a memo-
rable time ndash that will make them smile every time they think about Raol Guest House To ensure that all
guests and staff are treated with the respect and dignity they deserve To thank each guest for the oppor-
tunity to serve them By maintaining these objectives we shall be assured of a fair profit that will allow us
to contribute to the community we serverdquo
Vision
ldquo To become Mauritiusrsquo leading guest house for the best service offered for the warmest welcome to our
residents to become the most renowned for event management and to offer the most delicious and healthy
food on the island and all that by staying as close and friendly to nature as possible
6
COMPETITIVE ADVANTAGE
Competitive advantage is defined as a strategic advantage one business entity has over its rival entities
within its competitive industry Achieving competitive advantage strengthens and positions a business bet-
ter within the business environment Competitive advantage of guest house focuses on the leisure of peo-
ple It is essential to produce new and innovative ideas to differentiate a service from others of the same
nature
Customer analysis
Customers are the reason for an organisation to be in business Raol Guest house offers a wide range of
services its present customers are mainly local residents and tourists who come for a family vacation of
about 15 days Now Raol Guest House wants to exploit the market further by providing customer satisfac-
tion
Market analysis
The market size of Raol Guest House has significantly increased due to the following factors
1 Customer Satisfaction
It has been observed that customers have been visiting them again and also to see that customers‟ feed-
backs are positive at all times This shows that the customers are satisfied with the way they are being
treated each time
2 Consistent staff training
Raol Guest House strategy is to provide consistent staff training so a training program was developed
which all key staff members staff members would undertake and was designed was an integrated multi-
faceted package that featured a mix of workshops videos training on new standards and included clearly
set-out objectives This unique approach to training facilitated the avoidance of bdquoone-size-fits-all‟ philoso-
phy which often proves ideal when creating a global brand but for the resort it was vital for each to pre-
serve elements of individuality The service delivery was overhauled and consistency was introduced
3 Increase turnover
Raol Guest House has been hiring employees who are competent and this reduces expenses associated
with incompetent employees the hotel also employs employees who are loyal and those who do not en-
gage in unethical behaviours that consume the expected profits The Raol Guest House has been making
profits all the time this indicates that the strategies put in place Human resource strategies have been ef-
fective and have assisted the guest house in increasing its sales and turnover and eventually higher profits
7
4 Innovated Services
Raol Guest House has excellent employees who have a keen eye to innovation they come up with strate-
gies that ensure that hotel stays on top and some of the innovations include furnishing the rooms in a mod-
ern way making sure that the customer‟s needs are achieve Innovative employees of the Raol Guest House
are rewarded or given opportunities to further their innovation through education in institutions that offer
hospitality course innovative means that employee are given opportunities to meet and exchange ideas
with other employees from resorts
5Low prices compared to hotels
It has been observed that Raol Guest House offers many services at a considerable low price
STATEMENT FOR MARKETING OBJECTIVES AND FINANCIAL OB-
JECTIVES
Marketing objectives
There is an idea of making the guesthouse more available to the Mauritians who until now could not really
access the guest house to the high charges The department also decided to make the guest house more re-
nowned in Mauritius They want to manage events on the left wing of the guesthouse where a big hall
kitchens and many big rooms will be constructed
The space the guest house already has but which is unused will thus become a source of income to the or-
ganisation The idea is to make the guest house into an event management company as well The marketing
department has already planned how to prevent noises from disturbing the guest house residents They plan
to make another entry and exit for the left wing and also protect the whole guest house with soundproof
walls
Despite the complexity of the whole plan the marketing department is sure that this will help boost up the
image of Raol Guest House and allow people to plan their marriage birthdays business meetings in a nat-
ural place where ecology and tranquillity is a priority to the direction of the guest house Also is it that
Raol Guest House will also offer various cuisines in its restaurant called ldquoDelices de la Naturerdquo where in-
stead of offering only traditional Mauritian food all kind of food will be available to the residents such as
Indian food Chinese food Italian food and European food To be able to offer only the best delicacies to
our customers four specialised chefs will be recruited
8
assistance An extended ndash stay resident wants an in-room kitchen Conventioneers want large meeting
rooms preplanned sightseeing and hospitality suites
Resolve consumer complaints more effectively because business travellers are quite concerned about one-
booking long waiting lines late check-in times Moreover Raol Guest House is dealing for alternative ac-
commodation in case that they are over-booked computerizing check-ins offering express checkouts
( bills are placed under room doors or mailed to guests‟ room doors or mailed to guest‟ businesses or
homes)serving free drinks and providing baggage handling if check-in times are late
All these objectives allow the clients of Raol Guest House to enjoy a memorable and amazing time
Financial Objectives
The financial objectives of the company are listed below
Achieve sales revenue of Rs 150000 in year 2015 and Rs 1 million in year 2018
Achieve 5 growth in sales in the niche market of guesthouses
Ensure a positive cash flow from operating investing and financing activities
9
SWOT ANALYSIS
SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses and for identi-
fying both the Opportunities open to you and the Threats you face
Situation analysis in which internal strengths and weaknesses of an organization and exter-
nal opportunities and threats faced by it are closely examined to chart a strategy SWOT stands
for strengths weaknesses opportunities and threats Below is the SWOT Analysis of Raol Guest House
MARKET RESEARCH
Market research has been carried out Both primary and secondary data have been collected Primary
data has been collected by the customers while the secondary data has been gathered through internet
researches
10
SEGMENTATION
Hotel consumers are varied in a number of aspects Their respective differences often provide a challenge
for firms trying to meet and exceed consumer productservice expectations Smith (1956) defines market
segmentation as a competition defense mechanism in response to differing consumer demand It allows a
firm to divide a heterogeneous market of products and services into smaller homogenous units (Smith
1956) The segment identifies existing and potential consumers and aligns them with the products and ser-
vices that may satisfy a greater number of their specific needs (Smith 1956 amp Forsyth 2009) An industry
with a segmented market allows for the examination of the intrinsic and extrinsic factors that can influ-
ence the consumer‟s decision making in reference to the given product or service Implementing market
segmentation strategies are expected to allow the firm to better target their consumers The segmentation
that Raol Guest House will be using to launch its new product is divided into two groups namely
Geographic Segmentation
It is the division of the market into different geographic units including nations states regions or neigh-
borhoods (Belch amp Belch 2007) Raol Guest House will aim at different countries such as Comoros
Kenya Madagascar Mayotte Reunion Seychelles South Africa and Zimbabwe
Demographic Segmentation
It refers to the division of the market on the basis of demographic variables such as age gender family
size education income and social class Raol Guest House will also be sold in a low price allowing high
class middle class and low class family to purchase the service
TARGETING
Raol Guest House also aims at target one or more segments business travellers through tourists (who stay
one night) regular tourists (who stay 2 or more nights) extended stay residents (who stay up to several
months or longer and conventioneers
11
POSITIONING
To combat the effects of a competitive market environment and to position itself Treacy and Wiersema
suggests three value disciplines which firms should focus their operation (1995) The disciplines Opera-
tional Excellence ProductService Leadership and Customer Intimacy
Operational Excellence
Operational Excellence pertains to the firm‟s ability to provide ldquomiddle-of-the-market products at the best
price with the least inconveniencerdquo to the consumer (Treacy amp Wiersema 1995 p xii) Raol Guest House
focusing on this discipline will utilize a ldquocost reduction in operationsrdquo while still providing reliable prod-
ucts and services at a competitive price (Riemann amp et al 2009 p 4) The firm‟s managers must pay close
attention to cost controls if they seek to achieve an optimized business process (Riemann amp et al 2009
Porter 1980) Raol Guest House utilizing lower costing operational procedures will yield greater returns
when compared to their competitors (Porter 1980)
ProductService Leadership
ProductService Leadership references how the firm strives to offer the best available product or service
(Treacy amp Wiersema 1995) This value discipline relates to the differentiation strategies that the firm may
implement The offered product or service may exceed competing offerings by ldquodesign technology fea-
tures customer servicerdquo or other complex element (Porter 1980 p 36) Strategies focused around
productservice e leadership allow the firm to narrow their business focus to providing the best available
offerings to improve their leadership position (Treacy amp Wiersema 1995) A lodging firm utilizing en-
hanced products and services is further attempting to improve the consumer‟s quality of stay (Riemann amp
et al 2009) This value discipline is expected to yield ldquoabove-average returnsrdquo as it encourages consumer
ldquobrand loyaltyrdquo 30 and a lower threshold for price sensitivity (Porter 1980 p38) The firm develops a
competitive advantage by being at the forefront of product or service innovation (Treacy amp Wiersema
1995)
Customer Intimacy
Customer Intimacy references the firm‟s ability to provide customizable products and services that cater to
the needs and requests of their individual guests (Riemann amp et al 2009) This value discipline is focused
on ldquoserving a particular target [market] very wellrdquo (Porter 1980 p 38) The firm strategically works to-
wards providing a consumer solution oppose to a service (Treacy amp Wiersema 1995) Establishing and
maintaining intimate consumer relationships is important to this discipline (Treacy amp Wiersema 1995)
The firm recognizes the consumers‟ ldquolifetime valuerdquo and attempts to establish lasting consumer loyalty
(Treacy amp Wiersema 1995 p 41) The market strategies developed around this discipline aim to provide
products and services that meet or exceed the specific needs of the consumer McGuire suggests that firms
should strive towards these strategies as they aid the consumer in understanding and differentiating the
uniqueness between competing firms (2009)
12
MARKETING MIX
ldquoThe marketing mix concept is a well-established tool used as a structure by marketers It consists of the
various elements of a marketing programmed which need to be considered in order to successfully imple-
ment the marketing strategy and positioning in the company‟s market It is the important internal elements
or ingredients that make up an organization‟s marketing programmerdquo- Adrian Payne
Product
ldquoA product is anything that can be offered to a market for attention use or consumption that might satisfy a
want or a need It includes physical objects services places organisations and ideasrdquo KotlerBowen and
Makens
In the tourism industry there is no production of goods but rather this industry provides a myriad of ser-
vices and experiences The service that Raol Guest House procures has special characteristics
Intangibility
Services can be purchased but cannot be seen touched or tasted ndashthey are intangible The heart of a service
is the experience created for the customer In choosing Raol Guest House a customer might look to the ad-
ditional services that Raol Guest House offers to its customers
Inseparability
The service is created and consumed at the same time Therefore the client and employee are both in-
volved during this process During this process it is vital to keep the same standard of service when deliv-
ering to its customers
Heterogeneity
No 2 customers will demand exactly the same service they will have different de-
mandsexpectationstastesmoodsperceptions and emotions ( George200121)
Lack of ownership
In this conceptthe customer has nothing to take away except hisher experienceMost of the services are of
ldquo temporary use‟ and the memories arising from there Like for Raol Guest Housea room will only be
served to enhance or degrade their experience of the service being provided
Perishability
The hospitality offered by the Raol Guest House cannot be storedsaved or reuse-it is perishable
Some new services could be generated A babyndash sitting service a 24 hour room service car rental Fur-
thermore a fitness studio can be set up which will give more profit and a bit of modern touch to the Raol
Guest House Other services like organising transport facilities for their guests suggesting plans of inter-
ests in the area organising tours bookings can be offered Vacation packages also can be offered
13
Price
Price is the value that is placed on something Price is an indispensable element in the marketing mix since
it generated revenue and it is the only basis of recovering the costs and profitsZeithaml ( 1998 ) claimed
that the customers will think whether they received the value of money or before they decide to return the
purchase from the service provider Raol Guest House can adopt a seasonal pricing where the price paid for
a particular service can be during a certain time or period only or even price flexibility also can be em-
braced which is an unstable amount that can be paid for the same services by two different customers or it
can be adjustable price for different customers with the same service depending on the customer relation-
ship ( Keyes 2010104)
Physical Evidence
This factor refers to the ability and environment in which the service will be delivered For example the
interior and exterior decoration its furnishing lights Moreover Raol Guest House will have its own bro-
chures will be available for its customers This service scope includes three physical environment dimen-
sions that represent the relation between services and environment namely
1Environmental conditions such as temperaturesoundsmell
2Space and functions such as mapequipementdecoration
3Signssymbols and artefacts such as decoration style
The more intangible the service the more important it is to make the service around it tangible The physi-
cal evidence serves as a visual metaphor of what the company represents what services it facilitates and
the relations between customers and employees
People
All the staff being employed at Raol Guest House will be the locals since they are more acquainted with
the local tastes The personnel will be trained at a regular basis so as to keep them updated and also to be
able to meet up the customers‟ expectations In this way Raol Guest House will be able to bdquoadd value‟ to
its service through its employees Also the employees will be able to have a good clientele with the cus-
tomers In this way the staff will learn about the guests‟ likes and dislikes thus with this knowledge the
personnel can provide an improved experience to the tourists who would lead to an increased in the profita-
bility margin The resources that Raol Guest House has are its workers from waiter to the General Manag-
er each of them is recruited according to skills qualifications and work experience They are recruited
from Sir Gaeumltan Duval Hotel School Moreover Raol Guest House also encourages continuous training
which will help the employees to create innovate and communicate effectively
14
Process
A process is a flow of activities At Raol Guest House the process is simple since it operated at a small
scale The process is more coordinated according to the needs of the customers
15
Place
Place refers to the physical and virtual environment ambiance staff and activities and at the point of ser-
vice offering The atmosphere and the physical environment are the specific factors that each guest house
getsAccessibility is a critical element of place as it represents the extent to which markets and destinations
are connected (Weaver and Oppermann 2000) The location where Raol Guest House is situated is a highly
tourist attraction The guest house has 35 standard rooms are categorized into 3 groups-(Sea view Moun-
tain View and Road view)
Promotion
Promotion has got a vital role in promoting a destinationit enables to communicate with individual
groups organisations to directly or indirectly facilitate exchange by informing and persuading the different
market segments to welcome the choice of the destination being promoted
A successful promotion strategy is devised by having a push and pull promotion
According to Kotler (2001 pg531)
ldquoA push strategy involves pushing the product through distribution channels to final consumers The prod-
uct directs it marketing activities (personnel selling and trade promotion) toward channel members to in-
clude them to carry the product and to promote it to final consumers Using a pull strategy the producer
directs its marketing activities (primarily advertising and consumer promotions) towards final consumers to
induce them buy the productrdquo
Push strategy is also known as ldquotaking the product to the consumer ldquo The push promotional strategy in-
volves taking the leisure product directly to the customer This can be achieved by making use of any
means and the final aim is to ensure that the customer is aware of the guesthouse‟s name providing the lei-
sure activity at the point of purchase One example of the push promotional strategy is the point of sale
displays in the guesthouse lobby
Pull strategy is also known as ldquoGetting the customer to come to yourdquo The pull strategy is to motivate the
tourists in such a way that they are themselves encouraged to come and seek leisure facilities in the guest-
house One example of the pull strategy is advertising and mass media promotion
According to Kotler (2001) there are five strategy promotional mix they are
Advertising
Advertising is any form of non-personal communication from an identified sponsor about the organization
and its services using the media to influence a target market (Blech amp Blech 1998 Wells Burnett amp Mori-
aty 1998 Zikmund amp D‟amico 1996) This is to inform potential customers about the products that the
organization is offering and to persuade them to buy it Some examples of advertising can be yellow pages
local newspapers radio trade journals exhibitions and websites
16
Sales promotion
It is providing the customers with the basic service adding further appealing packages to it This can help to
achieve customer loyalty and as the same time attract new customers
Public Relations
Public Relations (PR) are defined by the British Institute of Public Relations as the planned and sustained
effort to establish and maintain goodwill between an organisation and its public Public Relations are ex-
tensively used in the tourism industry as a way of communicating with potential customers
Public Relations can also be defined as any group that has actual or potential interest on a company‟s abil-
ity to achieve its objectives (Kotler 2000)
PR is concerned with a number of marketing tasks These include the following
Building or maintaining image
Supporting the other communication activities
Handling problems and issues reinforcing position
Influencing specific publics
Direct Marketing
Direct marketing is to carry out a market research from time to time to know about the exact needs and
wants of the customers and to cater for them This component of the promotional mix does not use the tra-
ditional formal channels of advertising instead it is done through fliers catalogue distribution and promo-
tional letters
Personal Selling
Personal selling is to communicate orally with a potential customer of the leisure activity with the intention
to make a sale This is the most effective form of promotion as the customer is able to get the exact service
and information that she is expecting
17
STRATEGIC PLANNING APPROACHES
The Productmarket opportunity matrix (Ansoff Matrix) has been used to show strategic planning approach
that the company will adopt
Market Penetration
An organisation pursuing a market penetration strategy is aiming to sell more of its existing products in ex-
isting markets To support a market penetration strategy an organisation must make sure that it maintains
and builds the competences that are relevant to the particular market and that it has the relevant capacity to
meet higher levels of demand Raol Guest House can make use of the following strategies make use of ag-
gressive Make use of aggressive advertisement television radio newspapers health conscious magazines
and internet Build customer loyalty by providing discounts on cumulative purchases Offer discount cou-
pon for old customers
Productservice Development
This strategy involves the organisation operating in its existing markets and developing innovative or modi-
fied versions of its existing products to appeal to those markets For an effective product development
strategy an organisation must either be able to build on its existing competences or acquire new ones but it
does allow the organisation to exploit its existing knowledge of its customersRaol Guest House can Devel-
op new types of services like Spa
18
Market Development
This strategy entails expanding into new markets with existing products which are at the most only
slightly modified for the new market These may be new markets geographically new market segments
or new uses for products Whatever the market this approach to growth depends upon the existence of
new consumer groups who are willing and able to buy the existing product The company can look for
international markets like the European Countries enter new market segments market through Social
media (eg Facebook)
Diversification
Diversification involves the organisation moving into new markets with new products Diversification
may become necessary when none of the alternative mechanisms for generating growth are feasible and
is generally thought to be the more risky route to growth But for Raol Guest House for the time being it
can concentrate on the three above strategies since they carry lower risks as the organisation has some
experience in it By contrast the fourth strategy - diversification is much more risky because the organi-
sation is moving into areas in which it has little or no experience As a consequence the instances of
pure diversification are rare When diversification is undertaken the risks can be reduced by concentrat-
ing on either familiar markets or familiar technologies Moving into new markets with products which
require new technologies constitutes the riskiest and also the rarest form of diversification In the long-
runRaol Guest House can opt to diversify
CONTROLS AND EVALAUTION
Implementation
The marketing manager will coordinate the marketing activities that are crucial in achieving the finan-
cial and marketing objectives of the company Raol GuestHouse requires the marketing department to
maintain its professional integrity looking out for its marketing goals and implementing the marketing
programmes as best fits its strategy
Controls
To maximise the return on a marketing plan there need to be controls in place to monitor the plans pro-
gress Control is not a singular thing but a host of tools for making sure that the company is on track
Raol GuestHouse will be using four types of controls to monitor the service marketing plan progress
Annual plan control
The purpose of the annual plan control is to ensure that Raol GuestHouse achieves the sales profits and
other goals established in the marketing plan
Sales analysis - Actual sales will be compared to sales targets and budgets and an analysis of any vari-
ance between the two will be carefully examined
Market share analysis - Raol Guest House will be using overall market share served market share and
19
Customer attitude tracking - Raol Guest House will monitor customer feedback through polls and surveys
The company will carry out customer surveys by phone or in person and host online polls to gauge what
customers feel about the Services The company will also implement a customer complaint and suggestion
scheme to increase customer satisfaction level
Sales-to-expense ratios - Sales-to-expense ratios will be used to determine whether Raol Guest House is
spending too much or too little on marketing the Services in order to achieve its sales goals The following
sales-to-expense ratios will be used
advertising to sales
sales force size to sales
sales promotion to sales
marketing research to sales
Profitability control
Profitability control will help Raol Guest House to evaluate and improve spending and examine whether it
is making profits or losses The following measures will be taken to control its profitability
Sales revenue and costs from the previous year will be compared to that of the current year
Actual and estimated profits will also be compared to determine differences
A cost control system will be developed to maintain costs that remain within the specified budget
Efficiency control
Efficiency control will be used to evaluate and improve the spending efficiency and impact of marketing
expenditures The efficiency of sales force advertising sales promotion and distribution will be moni-
tored
Strategic control
The purpose of strategic control is to examine whether Raol Guest House is pursuing its best opportunities
with respect to markets products and channels The following marketing tools will be used
marketing effectiveness rating instrument
marketing audit
marketing excellence review
company ethical and social responsibility review
20
REFERENCES
BELCH GE AND BELCH MA 2007 Advertising and promotion an integrated marketing communi-
cation perspective In IrwinMcGraw Hill 7th ed Boston Massachusetts 45
FERREL O C and HARTLINEMD 2008 Marketing Strategy Mason Thomson Higher Education
KOEGEL K 2010 ldquoBuilding Brands Onlinerdquo Ad Age Insights October 11
KOTLER P ANG SH LEONG SM and TAN CT 1999 Marketing Management An AsianPer-
spective 2nd Ed Prentice Hall
LANCASTER G AND REYNOLDS P 2005Management of Marketing Burlington Elsevier Butter-
worth ndash Heinemann
WEBSITES httpsquizletcom30731376casino-management-exam-2-flash-cards
httpfacultyjwuedupbagdanHOSP3050worksheetsch14_worksheetdoc
httpfacultyjwuedupbagdanHOSP3050worksheetsCHAPTER2014doc
2
Acknowledgement
The accomplishment of this project would not have been possible without the help and support of a number of persons who have contributed in some way or another
to this Assignment
My warmest thanks go first to our Module Convener Mrs Shyam Seebun for his constructive criticisms and advice
Appreciation is also due to many people who have helped me throughout the pro-ject often without knowing they were doing so
Last but not the least our gratitude goes to my family and friends for their support and encouragement to the success of completing this assignment
Without help of the particulars mentioned above we would have faced many diffi-culties while doing this project
3
COMPANY DESCRIPTION
COMPETITIVE ADVANTAGE
STATEMENT OF MARKETING OBJECTIVES AND FINANCIAL OBJECTIVES
SWOT ANALYSIS
MARKET RESEARCH
SEGMENTATION
TARGETING
POSITIONING
MARKETING MIX
STRATEGIC PLANNING APPROACHES
CONTROLS AND EVALAUTION
REFERENCING
4
COMPANY DESCRIPTION
Raol Guest House (current situation)
Your Origins Can Never Be Replaced
Lying on the north east coast of Mauritius Raol Guest House is a luxurious guesthouse comprising of 50
rooms at Poste de Flacq It offers 247 guaranteed hospitality care and good time Its personnel are always
at the guests‟ disposal to make their time a memorable one during their stay at the Raol Guest House
Raol Guest House guesthouse was born in 2013 It was created under an eco-green program which aimed
at giving back to nature its importance in our customers‟ lives and makes them experience its surprising
benefits Its slogan ldquoYour Origins can Never be Replacedrdquo which means returning to our roots be closer
to who we are by being farther from what makes us who we are not describes best the way the guesthouse
is built and maintained You are sure to feel one with nature and be overwhelmed with the amount of ac-
tivities available at the guesthouse
The guestsrsquo areas
The layout of these areas must ensure a high level of personal safety and security for the guests and their
property and also enable to render effective service
Public guests areas
Public guests‟ areas are for the exclusive use for the guests and their visitors The following places are re-
garded as public areas which are available in the guest house
The entrance hall
The reception area or office also called the bdquofront desk‟
The guests waiting area close to the reception
Guests toilet
The dining room or breakfast room
Smoking areas and
Halls stairways landing and passages
The purpose of a guest house is to provide temporary accommodation for families while they are on travel
in Mauritius It also provides a safe comfortable and cost-effective alternative to hotels and other tempo-
rary residences when such facilities are non-existent limited unsafe or excessively overpriced There are
other facilities available in the guest house which are
-Breakfast Lunch amp Diner
-Car Rental
-Taxi on request
5
Raol Guest House offers Hospitality services like accommodation food and beverages business service
and leisure
ACCOMODATION
Each room is decorated in tropical pastel paints prints and handcrafted furniture equipped with cable
satellite TVair-conditioningceiling fans hair dryer direct dial telephone bath-tubshower and a balcony
Standard rooms are configured with either a King-Size bed or two twin beds in the sea and Mountain
View the road view has two double beds The guesthouse is built on two levels featuring a living room
with a bar area and a restaurant on the floor The 15 Junior Suites were fitted with a double bed or two
twin beds as well as a living room area with a sofa that converted to another bed
The meal plans are most flexible Bed amp Breakfast or accommodation only as all units is self-catering
with dedicated housemaids to prepare your meals according to the guests‟ wishes Creole European or In-
dian dishes are possible The maids also look after the washing and ironing and take care of any grocery
shopping if so required Fresh food gets delivered daily at current market prices
Moreover Raol Guest House carries a Full Fire Certificate which some guesthouses‟ do not provide
The Raol Guest House still thriving in 2013 after 1 year in business would like to boost up its image by
adding more services to attract more customers and thus expand its clientele In addition the restaurant
serving breakfasts and menu dinners upon request is open to outsiders and is very much appreciated by the
neighbourhood
Mission Statement
ldquoTo ensure that each guest receives prompt professional friendly and courteous service To maintain a
clean comfortable and well maintained premises for our guests and staff To provide our guests a memo-
rable time ndash that will make them smile every time they think about Raol Guest House To ensure that all
guests and staff are treated with the respect and dignity they deserve To thank each guest for the oppor-
tunity to serve them By maintaining these objectives we shall be assured of a fair profit that will allow us
to contribute to the community we serverdquo
Vision
ldquo To become Mauritiusrsquo leading guest house for the best service offered for the warmest welcome to our
residents to become the most renowned for event management and to offer the most delicious and healthy
food on the island and all that by staying as close and friendly to nature as possible
6
COMPETITIVE ADVANTAGE
Competitive advantage is defined as a strategic advantage one business entity has over its rival entities
within its competitive industry Achieving competitive advantage strengthens and positions a business bet-
ter within the business environment Competitive advantage of guest house focuses on the leisure of peo-
ple It is essential to produce new and innovative ideas to differentiate a service from others of the same
nature
Customer analysis
Customers are the reason for an organisation to be in business Raol Guest house offers a wide range of
services its present customers are mainly local residents and tourists who come for a family vacation of
about 15 days Now Raol Guest House wants to exploit the market further by providing customer satisfac-
tion
Market analysis
The market size of Raol Guest House has significantly increased due to the following factors
1 Customer Satisfaction
It has been observed that customers have been visiting them again and also to see that customers‟ feed-
backs are positive at all times This shows that the customers are satisfied with the way they are being
treated each time
2 Consistent staff training
Raol Guest House strategy is to provide consistent staff training so a training program was developed
which all key staff members staff members would undertake and was designed was an integrated multi-
faceted package that featured a mix of workshops videos training on new standards and included clearly
set-out objectives This unique approach to training facilitated the avoidance of bdquoone-size-fits-all‟ philoso-
phy which often proves ideal when creating a global brand but for the resort it was vital for each to pre-
serve elements of individuality The service delivery was overhauled and consistency was introduced
3 Increase turnover
Raol Guest House has been hiring employees who are competent and this reduces expenses associated
with incompetent employees the hotel also employs employees who are loyal and those who do not en-
gage in unethical behaviours that consume the expected profits The Raol Guest House has been making
profits all the time this indicates that the strategies put in place Human resource strategies have been ef-
fective and have assisted the guest house in increasing its sales and turnover and eventually higher profits
7
4 Innovated Services
Raol Guest House has excellent employees who have a keen eye to innovation they come up with strate-
gies that ensure that hotel stays on top and some of the innovations include furnishing the rooms in a mod-
ern way making sure that the customer‟s needs are achieve Innovative employees of the Raol Guest House
are rewarded or given opportunities to further their innovation through education in institutions that offer
hospitality course innovative means that employee are given opportunities to meet and exchange ideas
with other employees from resorts
5Low prices compared to hotels
It has been observed that Raol Guest House offers many services at a considerable low price
STATEMENT FOR MARKETING OBJECTIVES AND FINANCIAL OB-
JECTIVES
Marketing objectives
There is an idea of making the guesthouse more available to the Mauritians who until now could not really
access the guest house to the high charges The department also decided to make the guest house more re-
nowned in Mauritius They want to manage events on the left wing of the guesthouse where a big hall
kitchens and many big rooms will be constructed
The space the guest house already has but which is unused will thus become a source of income to the or-
ganisation The idea is to make the guest house into an event management company as well The marketing
department has already planned how to prevent noises from disturbing the guest house residents They plan
to make another entry and exit for the left wing and also protect the whole guest house with soundproof
walls
Despite the complexity of the whole plan the marketing department is sure that this will help boost up the
image of Raol Guest House and allow people to plan their marriage birthdays business meetings in a nat-
ural place where ecology and tranquillity is a priority to the direction of the guest house Also is it that
Raol Guest House will also offer various cuisines in its restaurant called ldquoDelices de la Naturerdquo where in-
stead of offering only traditional Mauritian food all kind of food will be available to the residents such as
Indian food Chinese food Italian food and European food To be able to offer only the best delicacies to
our customers four specialised chefs will be recruited
8
assistance An extended ndash stay resident wants an in-room kitchen Conventioneers want large meeting
rooms preplanned sightseeing and hospitality suites
Resolve consumer complaints more effectively because business travellers are quite concerned about one-
booking long waiting lines late check-in times Moreover Raol Guest House is dealing for alternative ac-
commodation in case that they are over-booked computerizing check-ins offering express checkouts
( bills are placed under room doors or mailed to guests‟ room doors or mailed to guest‟ businesses or
homes)serving free drinks and providing baggage handling if check-in times are late
All these objectives allow the clients of Raol Guest House to enjoy a memorable and amazing time
Financial Objectives
The financial objectives of the company are listed below
Achieve sales revenue of Rs 150000 in year 2015 and Rs 1 million in year 2018
Achieve 5 growth in sales in the niche market of guesthouses
Ensure a positive cash flow from operating investing and financing activities
9
SWOT ANALYSIS
SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses and for identi-
fying both the Opportunities open to you and the Threats you face
Situation analysis in which internal strengths and weaknesses of an organization and exter-
nal opportunities and threats faced by it are closely examined to chart a strategy SWOT stands
for strengths weaknesses opportunities and threats Below is the SWOT Analysis of Raol Guest House
MARKET RESEARCH
Market research has been carried out Both primary and secondary data have been collected Primary
data has been collected by the customers while the secondary data has been gathered through internet
researches
10
SEGMENTATION
Hotel consumers are varied in a number of aspects Their respective differences often provide a challenge
for firms trying to meet and exceed consumer productservice expectations Smith (1956) defines market
segmentation as a competition defense mechanism in response to differing consumer demand It allows a
firm to divide a heterogeneous market of products and services into smaller homogenous units (Smith
1956) The segment identifies existing and potential consumers and aligns them with the products and ser-
vices that may satisfy a greater number of their specific needs (Smith 1956 amp Forsyth 2009) An industry
with a segmented market allows for the examination of the intrinsic and extrinsic factors that can influ-
ence the consumer‟s decision making in reference to the given product or service Implementing market
segmentation strategies are expected to allow the firm to better target their consumers The segmentation
that Raol Guest House will be using to launch its new product is divided into two groups namely
Geographic Segmentation
It is the division of the market into different geographic units including nations states regions or neigh-
borhoods (Belch amp Belch 2007) Raol Guest House will aim at different countries such as Comoros
Kenya Madagascar Mayotte Reunion Seychelles South Africa and Zimbabwe
Demographic Segmentation
It refers to the division of the market on the basis of demographic variables such as age gender family
size education income and social class Raol Guest House will also be sold in a low price allowing high
class middle class and low class family to purchase the service
TARGETING
Raol Guest House also aims at target one or more segments business travellers through tourists (who stay
one night) regular tourists (who stay 2 or more nights) extended stay residents (who stay up to several
months or longer and conventioneers
11
POSITIONING
To combat the effects of a competitive market environment and to position itself Treacy and Wiersema
suggests three value disciplines which firms should focus their operation (1995) The disciplines Opera-
tional Excellence ProductService Leadership and Customer Intimacy
Operational Excellence
Operational Excellence pertains to the firm‟s ability to provide ldquomiddle-of-the-market products at the best
price with the least inconveniencerdquo to the consumer (Treacy amp Wiersema 1995 p xii) Raol Guest House
focusing on this discipline will utilize a ldquocost reduction in operationsrdquo while still providing reliable prod-
ucts and services at a competitive price (Riemann amp et al 2009 p 4) The firm‟s managers must pay close
attention to cost controls if they seek to achieve an optimized business process (Riemann amp et al 2009
Porter 1980) Raol Guest House utilizing lower costing operational procedures will yield greater returns
when compared to their competitors (Porter 1980)
ProductService Leadership
ProductService Leadership references how the firm strives to offer the best available product or service
(Treacy amp Wiersema 1995) This value discipline relates to the differentiation strategies that the firm may
implement The offered product or service may exceed competing offerings by ldquodesign technology fea-
tures customer servicerdquo or other complex element (Porter 1980 p 36) Strategies focused around
productservice e leadership allow the firm to narrow their business focus to providing the best available
offerings to improve their leadership position (Treacy amp Wiersema 1995) A lodging firm utilizing en-
hanced products and services is further attempting to improve the consumer‟s quality of stay (Riemann amp
et al 2009) This value discipline is expected to yield ldquoabove-average returnsrdquo as it encourages consumer
ldquobrand loyaltyrdquo 30 and a lower threshold for price sensitivity (Porter 1980 p38) The firm develops a
competitive advantage by being at the forefront of product or service innovation (Treacy amp Wiersema
1995)
Customer Intimacy
Customer Intimacy references the firm‟s ability to provide customizable products and services that cater to
the needs and requests of their individual guests (Riemann amp et al 2009) This value discipline is focused
on ldquoserving a particular target [market] very wellrdquo (Porter 1980 p 38) The firm strategically works to-
wards providing a consumer solution oppose to a service (Treacy amp Wiersema 1995) Establishing and
maintaining intimate consumer relationships is important to this discipline (Treacy amp Wiersema 1995)
The firm recognizes the consumers‟ ldquolifetime valuerdquo and attempts to establish lasting consumer loyalty
(Treacy amp Wiersema 1995 p 41) The market strategies developed around this discipline aim to provide
products and services that meet or exceed the specific needs of the consumer McGuire suggests that firms
should strive towards these strategies as they aid the consumer in understanding and differentiating the
uniqueness between competing firms (2009)
12
MARKETING MIX
ldquoThe marketing mix concept is a well-established tool used as a structure by marketers It consists of the
various elements of a marketing programmed which need to be considered in order to successfully imple-
ment the marketing strategy and positioning in the company‟s market It is the important internal elements
or ingredients that make up an organization‟s marketing programmerdquo- Adrian Payne
Product
ldquoA product is anything that can be offered to a market for attention use or consumption that might satisfy a
want or a need It includes physical objects services places organisations and ideasrdquo KotlerBowen and
Makens
In the tourism industry there is no production of goods but rather this industry provides a myriad of ser-
vices and experiences The service that Raol Guest House procures has special characteristics
Intangibility
Services can be purchased but cannot be seen touched or tasted ndashthey are intangible The heart of a service
is the experience created for the customer In choosing Raol Guest House a customer might look to the ad-
ditional services that Raol Guest House offers to its customers
Inseparability
The service is created and consumed at the same time Therefore the client and employee are both in-
volved during this process During this process it is vital to keep the same standard of service when deliv-
ering to its customers
Heterogeneity
No 2 customers will demand exactly the same service they will have different de-
mandsexpectationstastesmoodsperceptions and emotions ( George200121)
Lack of ownership
In this conceptthe customer has nothing to take away except hisher experienceMost of the services are of
ldquo temporary use‟ and the memories arising from there Like for Raol Guest Housea room will only be
served to enhance or degrade their experience of the service being provided
Perishability
The hospitality offered by the Raol Guest House cannot be storedsaved or reuse-it is perishable
Some new services could be generated A babyndash sitting service a 24 hour room service car rental Fur-
thermore a fitness studio can be set up which will give more profit and a bit of modern touch to the Raol
Guest House Other services like organising transport facilities for their guests suggesting plans of inter-
ests in the area organising tours bookings can be offered Vacation packages also can be offered
13
Price
Price is the value that is placed on something Price is an indispensable element in the marketing mix since
it generated revenue and it is the only basis of recovering the costs and profitsZeithaml ( 1998 ) claimed
that the customers will think whether they received the value of money or before they decide to return the
purchase from the service provider Raol Guest House can adopt a seasonal pricing where the price paid for
a particular service can be during a certain time or period only or even price flexibility also can be em-
braced which is an unstable amount that can be paid for the same services by two different customers or it
can be adjustable price for different customers with the same service depending on the customer relation-
ship ( Keyes 2010104)
Physical Evidence
This factor refers to the ability and environment in which the service will be delivered For example the
interior and exterior decoration its furnishing lights Moreover Raol Guest House will have its own bro-
chures will be available for its customers This service scope includes three physical environment dimen-
sions that represent the relation between services and environment namely
1Environmental conditions such as temperaturesoundsmell
2Space and functions such as mapequipementdecoration
3Signssymbols and artefacts such as decoration style
The more intangible the service the more important it is to make the service around it tangible The physi-
cal evidence serves as a visual metaphor of what the company represents what services it facilitates and
the relations between customers and employees
People
All the staff being employed at Raol Guest House will be the locals since they are more acquainted with
the local tastes The personnel will be trained at a regular basis so as to keep them updated and also to be
able to meet up the customers‟ expectations In this way Raol Guest House will be able to bdquoadd value‟ to
its service through its employees Also the employees will be able to have a good clientele with the cus-
tomers In this way the staff will learn about the guests‟ likes and dislikes thus with this knowledge the
personnel can provide an improved experience to the tourists who would lead to an increased in the profita-
bility margin The resources that Raol Guest House has are its workers from waiter to the General Manag-
er each of them is recruited according to skills qualifications and work experience They are recruited
from Sir Gaeumltan Duval Hotel School Moreover Raol Guest House also encourages continuous training
which will help the employees to create innovate and communicate effectively
14
Process
A process is a flow of activities At Raol Guest House the process is simple since it operated at a small
scale The process is more coordinated according to the needs of the customers
15
Place
Place refers to the physical and virtual environment ambiance staff and activities and at the point of ser-
vice offering The atmosphere and the physical environment are the specific factors that each guest house
getsAccessibility is a critical element of place as it represents the extent to which markets and destinations
are connected (Weaver and Oppermann 2000) The location where Raol Guest House is situated is a highly
tourist attraction The guest house has 35 standard rooms are categorized into 3 groups-(Sea view Moun-
tain View and Road view)
Promotion
Promotion has got a vital role in promoting a destinationit enables to communicate with individual
groups organisations to directly or indirectly facilitate exchange by informing and persuading the different
market segments to welcome the choice of the destination being promoted
A successful promotion strategy is devised by having a push and pull promotion
According to Kotler (2001 pg531)
ldquoA push strategy involves pushing the product through distribution channels to final consumers The prod-
uct directs it marketing activities (personnel selling and trade promotion) toward channel members to in-
clude them to carry the product and to promote it to final consumers Using a pull strategy the producer
directs its marketing activities (primarily advertising and consumer promotions) towards final consumers to
induce them buy the productrdquo
Push strategy is also known as ldquotaking the product to the consumer ldquo The push promotional strategy in-
volves taking the leisure product directly to the customer This can be achieved by making use of any
means and the final aim is to ensure that the customer is aware of the guesthouse‟s name providing the lei-
sure activity at the point of purchase One example of the push promotional strategy is the point of sale
displays in the guesthouse lobby
Pull strategy is also known as ldquoGetting the customer to come to yourdquo The pull strategy is to motivate the
tourists in such a way that they are themselves encouraged to come and seek leisure facilities in the guest-
house One example of the pull strategy is advertising and mass media promotion
According to Kotler (2001) there are five strategy promotional mix they are
Advertising
Advertising is any form of non-personal communication from an identified sponsor about the organization
and its services using the media to influence a target market (Blech amp Blech 1998 Wells Burnett amp Mori-
aty 1998 Zikmund amp D‟amico 1996) This is to inform potential customers about the products that the
organization is offering and to persuade them to buy it Some examples of advertising can be yellow pages
local newspapers radio trade journals exhibitions and websites
16
Sales promotion
It is providing the customers with the basic service adding further appealing packages to it This can help to
achieve customer loyalty and as the same time attract new customers
Public Relations
Public Relations (PR) are defined by the British Institute of Public Relations as the planned and sustained
effort to establish and maintain goodwill between an organisation and its public Public Relations are ex-
tensively used in the tourism industry as a way of communicating with potential customers
Public Relations can also be defined as any group that has actual or potential interest on a company‟s abil-
ity to achieve its objectives (Kotler 2000)
PR is concerned with a number of marketing tasks These include the following
Building or maintaining image
Supporting the other communication activities
Handling problems and issues reinforcing position
Influencing specific publics
Direct Marketing
Direct marketing is to carry out a market research from time to time to know about the exact needs and
wants of the customers and to cater for them This component of the promotional mix does not use the tra-
ditional formal channels of advertising instead it is done through fliers catalogue distribution and promo-
tional letters
Personal Selling
Personal selling is to communicate orally with a potential customer of the leisure activity with the intention
to make a sale This is the most effective form of promotion as the customer is able to get the exact service
and information that she is expecting
17
STRATEGIC PLANNING APPROACHES
The Productmarket opportunity matrix (Ansoff Matrix) has been used to show strategic planning approach
that the company will adopt
Market Penetration
An organisation pursuing a market penetration strategy is aiming to sell more of its existing products in ex-
isting markets To support a market penetration strategy an organisation must make sure that it maintains
and builds the competences that are relevant to the particular market and that it has the relevant capacity to
meet higher levels of demand Raol Guest House can make use of the following strategies make use of ag-
gressive Make use of aggressive advertisement television radio newspapers health conscious magazines
and internet Build customer loyalty by providing discounts on cumulative purchases Offer discount cou-
pon for old customers
Productservice Development
This strategy involves the organisation operating in its existing markets and developing innovative or modi-
fied versions of its existing products to appeal to those markets For an effective product development
strategy an organisation must either be able to build on its existing competences or acquire new ones but it
does allow the organisation to exploit its existing knowledge of its customersRaol Guest House can Devel-
op new types of services like Spa
18
Market Development
This strategy entails expanding into new markets with existing products which are at the most only
slightly modified for the new market These may be new markets geographically new market segments
or new uses for products Whatever the market this approach to growth depends upon the existence of
new consumer groups who are willing and able to buy the existing product The company can look for
international markets like the European Countries enter new market segments market through Social
media (eg Facebook)
Diversification
Diversification involves the organisation moving into new markets with new products Diversification
may become necessary when none of the alternative mechanisms for generating growth are feasible and
is generally thought to be the more risky route to growth But for Raol Guest House for the time being it
can concentrate on the three above strategies since they carry lower risks as the organisation has some
experience in it By contrast the fourth strategy - diversification is much more risky because the organi-
sation is moving into areas in which it has little or no experience As a consequence the instances of
pure diversification are rare When diversification is undertaken the risks can be reduced by concentrat-
ing on either familiar markets or familiar technologies Moving into new markets with products which
require new technologies constitutes the riskiest and also the rarest form of diversification In the long-
runRaol Guest House can opt to diversify
CONTROLS AND EVALAUTION
Implementation
The marketing manager will coordinate the marketing activities that are crucial in achieving the finan-
cial and marketing objectives of the company Raol GuestHouse requires the marketing department to
maintain its professional integrity looking out for its marketing goals and implementing the marketing
programmes as best fits its strategy
Controls
To maximise the return on a marketing plan there need to be controls in place to monitor the plans pro-
gress Control is not a singular thing but a host of tools for making sure that the company is on track
Raol GuestHouse will be using four types of controls to monitor the service marketing plan progress
Annual plan control
The purpose of the annual plan control is to ensure that Raol GuestHouse achieves the sales profits and
other goals established in the marketing plan
Sales analysis - Actual sales will be compared to sales targets and budgets and an analysis of any vari-
ance between the two will be carefully examined
Market share analysis - Raol Guest House will be using overall market share served market share and
19
Customer attitude tracking - Raol Guest House will monitor customer feedback through polls and surveys
The company will carry out customer surveys by phone or in person and host online polls to gauge what
customers feel about the Services The company will also implement a customer complaint and suggestion
scheme to increase customer satisfaction level
Sales-to-expense ratios - Sales-to-expense ratios will be used to determine whether Raol Guest House is
spending too much or too little on marketing the Services in order to achieve its sales goals The following
sales-to-expense ratios will be used
advertising to sales
sales force size to sales
sales promotion to sales
marketing research to sales
Profitability control
Profitability control will help Raol Guest House to evaluate and improve spending and examine whether it
is making profits or losses The following measures will be taken to control its profitability
Sales revenue and costs from the previous year will be compared to that of the current year
Actual and estimated profits will also be compared to determine differences
A cost control system will be developed to maintain costs that remain within the specified budget
Efficiency control
Efficiency control will be used to evaluate and improve the spending efficiency and impact of marketing
expenditures The efficiency of sales force advertising sales promotion and distribution will be moni-
tored
Strategic control
The purpose of strategic control is to examine whether Raol Guest House is pursuing its best opportunities
with respect to markets products and channels The following marketing tools will be used
marketing effectiveness rating instrument
marketing audit
marketing excellence review
company ethical and social responsibility review
20
REFERENCES
BELCH GE AND BELCH MA 2007 Advertising and promotion an integrated marketing communi-
cation perspective In IrwinMcGraw Hill 7th ed Boston Massachusetts 45
FERREL O C and HARTLINEMD 2008 Marketing Strategy Mason Thomson Higher Education
KOEGEL K 2010 ldquoBuilding Brands Onlinerdquo Ad Age Insights October 11
KOTLER P ANG SH LEONG SM and TAN CT 1999 Marketing Management An AsianPer-
spective 2nd Ed Prentice Hall
LANCASTER G AND REYNOLDS P 2005Management of Marketing Burlington Elsevier Butter-
worth ndash Heinemann
WEBSITES httpsquizletcom30731376casino-management-exam-2-flash-cards
httpfacultyjwuedupbagdanHOSP3050worksheetsch14_worksheetdoc
httpfacultyjwuedupbagdanHOSP3050worksheetsCHAPTER2014doc
3
COMPANY DESCRIPTION
COMPETITIVE ADVANTAGE
STATEMENT OF MARKETING OBJECTIVES AND FINANCIAL OBJECTIVES
SWOT ANALYSIS
MARKET RESEARCH
SEGMENTATION
TARGETING
POSITIONING
MARKETING MIX
STRATEGIC PLANNING APPROACHES
CONTROLS AND EVALAUTION
REFERENCING
4
COMPANY DESCRIPTION
Raol Guest House (current situation)
Your Origins Can Never Be Replaced
Lying on the north east coast of Mauritius Raol Guest House is a luxurious guesthouse comprising of 50
rooms at Poste de Flacq It offers 247 guaranteed hospitality care and good time Its personnel are always
at the guests‟ disposal to make their time a memorable one during their stay at the Raol Guest House
Raol Guest House guesthouse was born in 2013 It was created under an eco-green program which aimed
at giving back to nature its importance in our customers‟ lives and makes them experience its surprising
benefits Its slogan ldquoYour Origins can Never be Replacedrdquo which means returning to our roots be closer
to who we are by being farther from what makes us who we are not describes best the way the guesthouse
is built and maintained You are sure to feel one with nature and be overwhelmed with the amount of ac-
tivities available at the guesthouse
The guestsrsquo areas
The layout of these areas must ensure a high level of personal safety and security for the guests and their
property and also enable to render effective service
Public guests areas
Public guests‟ areas are for the exclusive use for the guests and their visitors The following places are re-
garded as public areas which are available in the guest house
The entrance hall
The reception area or office also called the bdquofront desk‟
The guests waiting area close to the reception
Guests toilet
The dining room or breakfast room
Smoking areas and
Halls stairways landing and passages
The purpose of a guest house is to provide temporary accommodation for families while they are on travel
in Mauritius It also provides a safe comfortable and cost-effective alternative to hotels and other tempo-
rary residences when such facilities are non-existent limited unsafe or excessively overpriced There are
other facilities available in the guest house which are
-Breakfast Lunch amp Diner
-Car Rental
-Taxi on request
5
Raol Guest House offers Hospitality services like accommodation food and beverages business service
and leisure
ACCOMODATION
Each room is decorated in tropical pastel paints prints and handcrafted furniture equipped with cable
satellite TVair-conditioningceiling fans hair dryer direct dial telephone bath-tubshower and a balcony
Standard rooms are configured with either a King-Size bed or two twin beds in the sea and Mountain
View the road view has two double beds The guesthouse is built on two levels featuring a living room
with a bar area and a restaurant on the floor The 15 Junior Suites were fitted with a double bed or two
twin beds as well as a living room area with a sofa that converted to another bed
The meal plans are most flexible Bed amp Breakfast or accommodation only as all units is self-catering
with dedicated housemaids to prepare your meals according to the guests‟ wishes Creole European or In-
dian dishes are possible The maids also look after the washing and ironing and take care of any grocery
shopping if so required Fresh food gets delivered daily at current market prices
Moreover Raol Guest House carries a Full Fire Certificate which some guesthouses‟ do not provide
The Raol Guest House still thriving in 2013 after 1 year in business would like to boost up its image by
adding more services to attract more customers and thus expand its clientele In addition the restaurant
serving breakfasts and menu dinners upon request is open to outsiders and is very much appreciated by the
neighbourhood
Mission Statement
ldquoTo ensure that each guest receives prompt professional friendly and courteous service To maintain a
clean comfortable and well maintained premises for our guests and staff To provide our guests a memo-
rable time ndash that will make them smile every time they think about Raol Guest House To ensure that all
guests and staff are treated with the respect and dignity they deserve To thank each guest for the oppor-
tunity to serve them By maintaining these objectives we shall be assured of a fair profit that will allow us
to contribute to the community we serverdquo
Vision
ldquo To become Mauritiusrsquo leading guest house for the best service offered for the warmest welcome to our
residents to become the most renowned for event management and to offer the most delicious and healthy
food on the island and all that by staying as close and friendly to nature as possible
6
COMPETITIVE ADVANTAGE
Competitive advantage is defined as a strategic advantage one business entity has over its rival entities
within its competitive industry Achieving competitive advantage strengthens and positions a business bet-
ter within the business environment Competitive advantage of guest house focuses on the leisure of peo-
ple It is essential to produce new and innovative ideas to differentiate a service from others of the same
nature
Customer analysis
Customers are the reason for an organisation to be in business Raol Guest house offers a wide range of
services its present customers are mainly local residents and tourists who come for a family vacation of
about 15 days Now Raol Guest House wants to exploit the market further by providing customer satisfac-
tion
Market analysis
The market size of Raol Guest House has significantly increased due to the following factors
1 Customer Satisfaction
It has been observed that customers have been visiting them again and also to see that customers‟ feed-
backs are positive at all times This shows that the customers are satisfied with the way they are being
treated each time
2 Consistent staff training
Raol Guest House strategy is to provide consistent staff training so a training program was developed
which all key staff members staff members would undertake and was designed was an integrated multi-
faceted package that featured a mix of workshops videos training on new standards and included clearly
set-out objectives This unique approach to training facilitated the avoidance of bdquoone-size-fits-all‟ philoso-
phy which often proves ideal when creating a global brand but for the resort it was vital for each to pre-
serve elements of individuality The service delivery was overhauled and consistency was introduced
3 Increase turnover
Raol Guest House has been hiring employees who are competent and this reduces expenses associated
with incompetent employees the hotel also employs employees who are loyal and those who do not en-
gage in unethical behaviours that consume the expected profits The Raol Guest House has been making
profits all the time this indicates that the strategies put in place Human resource strategies have been ef-
fective and have assisted the guest house in increasing its sales and turnover and eventually higher profits
7
4 Innovated Services
Raol Guest House has excellent employees who have a keen eye to innovation they come up with strate-
gies that ensure that hotel stays on top and some of the innovations include furnishing the rooms in a mod-
ern way making sure that the customer‟s needs are achieve Innovative employees of the Raol Guest House
are rewarded or given opportunities to further their innovation through education in institutions that offer
hospitality course innovative means that employee are given opportunities to meet and exchange ideas
with other employees from resorts
5Low prices compared to hotels
It has been observed that Raol Guest House offers many services at a considerable low price
STATEMENT FOR MARKETING OBJECTIVES AND FINANCIAL OB-
JECTIVES
Marketing objectives
There is an idea of making the guesthouse more available to the Mauritians who until now could not really
access the guest house to the high charges The department also decided to make the guest house more re-
nowned in Mauritius They want to manage events on the left wing of the guesthouse where a big hall
kitchens and many big rooms will be constructed
The space the guest house already has but which is unused will thus become a source of income to the or-
ganisation The idea is to make the guest house into an event management company as well The marketing
department has already planned how to prevent noises from disturbing the guest house residents They plan
to make another entry and exit for the left wing and also protect the whole guest house with soundproof
walls
Despite the complexity of the whole plan the marketing department is sure that this will help boost up the
image of Raol Guest House and allow people to plan their marriage birthdays business meetings in a nat-
ural place where ecology and tranquillity is a priority to the direction of the guest house Also is it that
Raol Guest House will also offer various cuisines in its restaurant called ldquoDelices de la Naturerdquo where in-
stead of offering only traditional Mauritian food all kind of food will be available to the residents such as
Indian food Chinese food Italian food and European food To be able to offer only the best delicacies to
our customers four specialised chefs will be recruited
8
assistance An extended ndash stay resident wants an in-room kitchen Conventioneers want large meeting
rooms preplanned sightseeing and hospitality suites
Resolve consumer complaints more effectively because business travellers are quite concerned about one-
booking long waiting lines late check-in times Moreover Raol Guest House is dealing for alternative ac-
commodation in case that they are over-booked computerizing check-ins offering express checkouts
( bills are placed under room doors or mailed to guests‟ room doors or mailed to guest‟ businesses or
homes)serving free drinks and providing baggage handling if check-in times are late
All these objectives allow the clients of Raol Guest House to enjoy a memorable and amazing time
Financial Objectives
The financial objectives of the company are listed below
Achieve sales revenue of Rs 150000 in year 2015 and Rs 1 million in year 2018
Achieve 5 growth in sales in the niche market of guesthouses
Ensure a positive cash flow from operating investing and financing activities
9
SWOT ANALYSIS
SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses and for identi-
fying both the Opportunities open to you and the Threats you face
Situation analysis in which internal strengths and weaknesses of an organization and exter-
nal opportunities and threats faced by it are closely examined to chart a strategy SWOT stands
for strengths weaknesses opportunities and threats Below is the SWOT Analysis of Raol Guest House
MARKET RESEARCH
Market research has been carried out Both primary and secondary data have been collected Primary
data has been collected by the customers while the secondary data has been gathered through internet
researches
10
SEGMENTATION
Hotel consumers are varied in a number of aspects Their respective differences often provide a challenge
for firms trying to meet and exceed consumer productservice expectations Smith (1956) defines market
segmentation as a competition defense mechanism in response to differing consumer demand It allows a
firm to divide a heterogeneous market of products and services into smaller homogenous units (Smith
1956) The segment identifies existing and potential consumers and aligns them with the products and ser-
vices that may satisfy a greater number of their specific needs (Smith 1956 amp Forsyth 2009) An industry
with a segmented market allows for the examination of the intrinsic and extrinsic factors that can influ-
ence the consumer‟s decision making in reference to the given product or service Implementing market
segmentation strategies are expected to allow the firm to better target their consumers The segmentation
that Raol Guest House will be using to launch its new product is divided into two groups namely
Geographic Segmentation
It is the division of the market into different geographic units including nations states regions or neigh-
borhoods (Belch amp Belch 2007) Raol Guest House will aim at different countries such as Comoros
Kenya Madagascar Mayotte Reunion Seychelles South Africa and Zimbabwe
Demographic Segmentation
It refers to the division of the market on the basis of demographic variables such as age gender family
size education income and social class Raol Guest House will also be sold in a low price allowing high
class middle class and low class family to purchase the service
TARGETING
Raol Guest House also aims at target one or more segments business travellers through tourists (who stay
one night) regular tourists (who stay 2 or more nights) extended stay residents (who stay up to several
months or longer and conventioneers
11
POSITIONING
To combat the effects of a competitive market environment and to position itself Treacy and Wiersema
suggests three value disciplines which firms should focus their operation (1995) The disciplines Opera-
tional Excellence ProductService Leadership and Customer Intimacy
Operational Excellence
Operational Excellence pertains to the firm‟s ability to provide ldquomiddle-of-the-market products at the best
price with the least inconveniencerdquo to the consumer (Treacy amp Wiersema 1995 p xii) Raol Guest House
focusing on this discipline will utilize a ldquocost reduction in operationsrdquo while still providing reliable prod-
ucts and services at a competitive price (Riemann amp et al 2009 p 4) The firm‟s managers must pay close
attention to cost controls if they seek to achieve an optimized business process (Riemann amp et al 2009
Porter 1980) Raol Guest House utilizing lower costing operational procedures will yield greater returns
when compared to their competitors (Porter 1980)
ProductService Leadership
ProductService Leadership references how the firm strives to offer the best available product or service
(Treacy amp Wiersema 1995) This value discipline relates to the differentiation strategies that the firm may
implement The offered product or service may exceed competing offerings by ldquodesign technology fea-
tures customer servicerdquo or other complex element (Porter 1980 p 36) Strategies focused around
productservice e leadership allow the firm to narrow their business focus to providing the best available
offerings to improve their leadership position (Treacy amp Wiersema 1995) A lodging firm utilizing en-
hanced products and services is further attempting to improve the consumer‟s quality of stay (Riemann amp
et al 2009) This value discipline is expected to yield ldquoabove-average returnsrdquo as it encourages consumer
ldquobrand loyaltyrdquo 30 and a lower threshold for price sensitivity (Porter 1980 p38) The firm develops a
competitive advantage by being at the forefront of product or service innovation (Treacy amp Wiersema
1995)
Customer Intimacy
Customer Intimacy references the firm‟s ability to provide customizable products and services that cater to
the needs and requests of their individual guests (Riemann amp et al 2009) This value discipline is focused
on ldquoserving a particular target [market] very wellrdquo (Porter 1980 p 38) The firm strategically works to-
wards providing a consumer solution oppose to a service (Treacy amp Wiersema 1995) Establishing and
maintaining intimate consumer relationships is important to this discipline (Treacy amp Wiersema 1995)
The firm recognizes the consumers‟ ldquolifetime valuerdquo and attempts to establish lasting consumer loyalty
(Treacy amp Wiersema 1995 p 41) The market strategies developed around this discipline aim to provide
products and services that meet or exceed the specific needs of the consumer McGuire suggests that firms
should strive towards these strategies as they aid the consumer in understanding and differentiating the
uniqueness between competing firms (2009)
12
MARKETING MIX
ldquoThe marketing mix concept is a well-established tool used as a structure by marketers It consists of the
various elements of a marketing programmed which need to be considered in order to successfully imple-
ment the marketing strategy and positioning in the company‟s market It is the important internal elements
or ingredients that make up an organization‟s marketing programmerdquo- Adrian Payne
Product
ldquoA product is anything that can be offered to a market for attention use or consumption that might satisfy a
want or a need It includes physical objects services places organisations and ideasrdquo KotlerBowen and
Makens
In the tourism industry there is no production of goods but rather this industry provides a myriad of ser-
vices and experiences The service that Raol Guest House procures has special characteristics
Intangibility
Services can be purchased but cannot be seen touched or tasted ndashthey are intangible The heart of a service
is the experience created for the customer In choosing Raol Guest House a customer might look to the ad-
ditional services that Raol Guest House offers to its customers
Inseparability
The service is created and consumed at the same time Therefore the client and employee are both in-
volved during this process During this process it is vital to keep the same standard of service when deliv-
ering to its customers
Heterogeneity
No 2 customers will demand exactly the same service they will have different de-
mandsexpectationstastesmoodsperceptions and emotions ( George200121)
Lack of ownership
In this conceptthe customer has nothing to take away except hisher experienceMost of the services are of
ldquo temporary use‟ and the memories arising from there Like for Raol Guest Housea room will only be
served to enhance or degrade their experience of the service being provided
Perishability
The hospitality offered by the Raol Guest House cannot be storedsaved or reuse-it is perishable
Some new services could be generated A babyndash sitting service a 24 hour room service car rental Fur-
thermore a fitness studio can be set up which will give more profit and a bit of modern touch to the Raol
Guest House Other services like organising transport facilities for their guests suggesting plans of inter-
ests in the area organising tours bookings can be offered Vacation packages also can be offered
13
Price
Price is the value that is placed on something Price is an indispensable element in the marketing mix since
it generated revenue and it is the only basis of recovering the costs and profitsZeithaml ( 1998 ) claimed
that the customers will think whether they received the value of money or before they decide to return the
purchase from the service provider Raol Guest House can adopt a seasonal pricing where the price paid for
a particular service can be during a certain time or period only or even price flexibility also can be em-
braced which is an unstable amount that can be paid for the same services by two different customers or it
can be adjustable price for different customers with the same service depending on the customer relation-
ship ( Keyes 2010104)
Physical Evidence
This factor refers to the ability and environment in which the service will be delivered For example the
interior and exterior decoration its furnishing lights Moreover Raol Guest House will have its own bro-
chures will be available for its customers This service scope includes three physical environment dimen-
sions that represent the relation between services and environment namely
1Environmental conditions such as temperaturesoundsmell
2Space and functions such as mapequipementdecoration
3Signssymbols and artefacts such as decoration style
The more intangible the service the more important it is to make the service around it tangible The physi-
cal evidence serves as a visual metaphor of what the company represents what services it facilitates and
the relations between customers and employees
People
All the staff being employed at Raol Guest House will be the locals since they are more acquainted with
the local tastes The personnel will be trained at a regular basis so as to keep them updated and also to be
able to meet up the customers‟ expectations In this way Raol Guest House will be able to bdquoadd value‟ to
its service through its employees Also the employees will be able to have a good clientele with the cus-
tomers In this way the staff will learn about the guests‟ likes and dislikes thus with this knowledge the
personnel can provide an improved experience to the tourists who would lead to an increased in the profita-
bility margin The resources that Raol Guest House has are its workers from waiter to the General Manag-
er each of them is recruited according to skills qualifications and work experience They are recruited
from Sir Gaeumltan Duval Hotel School Moreover Raol Guest House also encourages continuous training
which will help the employees to create innovate and communicate effectively
14
Process
A process is a flow of activities At Raol Guest House the process is simple since it operated at a small
scale The process is more coordinated according to the needs of the customers
15
Place
Place refers to the physical and virtual environment ambiance staff and activities and at the point of ser-
vice offering The atmosphere and the physical environment are the specific factors that each guest house
getsAccessibility is a critical element of place as it represents the extent to which markets and destinations
are connected (Weaver and Oppermann 2000) The location where Raol Guest House is situated is a highly
tourist attraction The guest house has 35 standard rooms are categorized into 3 groups-(Sea view Moun-
tain View and Road view)
Promotion
Promotion has got a vital role in promoting a destinationit enables to communicate with individual
groups organisations to directly or indirectly facilitate exchange by informing and persuading the different
market segments to welcome the choice of the destination being promoted
A successful promotion strategy is devised by having a push and pull promotion
According to Kotler (2001 pg531)
ldquoA push strategy involves pushing the product through distribution channels to final consumers The prod-
uct directs it marketing activities (personnel selling and trade promotion) toward channel members to in-
clude them to carry the product and to promote it to final consumers Using a pull strategy the producer
directs its marketing activities (primarily advertising and consumer promotions) towards final consumers to
induce them buy the productrdquo
Push strategy is also known as ldquotaking the product to the consumer ldquo The push promotional strategy in-
volves taking the leisure product directly to the customer This can be achieved by making use of any
means and the final aim is to ensure that the customer is aware of the guesthouse‟s name providing the lei-
sure activity at the point of purchase One example of the push promotional strategy is the point of sale
displays in the guesthouse lobby
Pull strategy is also known as ldquoGetting the customer to come to yourdquo The pull strategy is to motivate the
tourists in such a way that they are themselves encouraged to come and seek leisure facilities in the guest-
house One example of the pull strategy is advertising and mass media promotion
According to Kotler (2001) there are five strategy promotional mix they are
Advertising
Advertising is any form of non-personal communication from an identified sponsor about the organization
and its services using the media to influence a target market (Blech amp Blech 1998 Wells Burnett amp Mori-
aty 1998 Zikmund amp D‟amico 1996) This is to inform potential customers about the products that the
organization is offering and to persuade them to buy it Some examples of advertising can be yellow pages
local newspapers radio trade journals exhibitions and websites
16
Sales promotion
It is providing the customers with the basic service adding further appealing packages to it This can help to
achieve customer loyalty and as the same time attract new customers
Public Relations
Public Relations (PR) are defined by the British Institute of Public Relations as the planned and sustained
effort to establish and maintain goodwill between an organisation and its public Public Relations are ex-
tensively used in the tourism industry as a way of communicating with potential customers
Public Relations can also be defined as any group that has actual or potential interest on a company‟s abil-
ity to achieve its objectives (Kotler 2000)
PR is concerned with a number of marketing tasks These include the following
Building or maintaining image
Supporting the other communication activities
Handling problems and issues reinforcing position
Influencing specific publics
Direct Marketing
Direct marketing is to carry out a market research from time to time to know about the exact needs and
wants of the customers and to cater for them This component of the promotional mix does not use the tra-
ditional formal channels of advertising instead it is done through fliers catalogue distribution and promo-
tional letters
Personal Selling
Personal selling is to communicate orally with a potential customer of the leisure activity with the intention
to make a sale This is the most effective form of promotion as the customer is able to get the exact service
and information that she is expecting
17
STRATEGIC PLANNING APPROACHES
The Productmarket opportunity matrix (Ansoff Matrix) has been used to show strategic planning approach
that the company will adopt
Market Penetration
An organisation pursuing a market penetration strategy is aiming to sell more of its existing products in ex-
isting markets To support a market penetration strategy an organisation must make sure that it maintains
and builds the competences that are relevant to the particular market and that it has the relevant capacity to
meet higher levels of demand Raol Guest House can make use of the following strategies make use of ag-
gressive Make use of aggressive advertisement television radio newspapers health conscious magazines
and internet Build customer loyalty by providing discounts on cumulative purchases Offer discount cou-
pon for old customers
Productservice Development
This strategy involves the organisation operating in its existing markets and developing innovative or modi-
fied versions of its existing products to appeal to those markets For an effective product development
strategy an organisation must either be able to build on its existing competences or acquire new ones but it
does allow the organisation to exploit its existing knowledge of its customersRaol Guest House can Devel-
op new types of services like Spa
18
Market Development
This strategy entails expanding into new markets with existing products which are at the most only
slightly modified for the new market These may be new markets geographically new market segments
or new uses for products Whatever the market this approach to growth depends upon the existence of
new consumer groups who are willing and able to buy the existing product The company can look for
international markets like the European Countries enter new market segments market through Social
media (eg Facebook)
Diversification
Diversification involves the organisation moving into new markets with new products Diversification
may become necessary when none of the alternative mechanisms for generating growth are feasible and
is generally thought to be the more risky route to growth But for Raol Guest House for the time being it
can concentrate on the three above strategies since they carry lower risks as the organisation has some
experience in it By contrast the fourth strategy - diversification is much more risky because the organi-
sation is moving into areas in which it has little or no experience As a consequence the instances of
pure diversification are rare When diversification is undertaken the risks can be reduced by concentrat-
ing on either familiar markets or familiar technologies Moving into new markets with products which
require new technologies constitutes the riskiest and also the rarest form of diversification In the long-
runRaol Guest House can opt to diversify
CONTROLS AND EVALAUTION
Implementation
The marketing manager will coordinate the marketing activities that are crucial in achieving the finan-
cial and marketing objectives of the company Raol GuestHouse requires the marketing department to
maintain its professional integrity looking out for its marketing goals and implementing the marketing
programmes as best fits its strategy
Controls
To maximise the return on a marketing plan there need to be controls in place to monitor the plans pro-
gress Control is not a singular thing but a host of tools for making sure that the company is on track
Raol GuestHouse will be using four types of controls to monitor the service marketing plan progress
Annual plan control
The purpose of the annual plan control is to ensure that Raol GuestHouse achieves the sales profits and
other goals established in the marketing plan
Sales analysis - Actual sales will be compared to sales targets and budgets and an analysis of any vari-
ance between the two will be carefully examined
Market share analysis - Raol Guest House will be using overall market share served market share and
19
Customer attitude tracking - Raol Guest House will monitor customer feedback through polls and surveys
The company will carry out customer surveys by phone or in person and host online polls to gauge what
customers feel about the Services The company will also implement a customer complaint and suggestion
scheme to increase customer satisfaction level
Sales-to-expense ratios - Sales-to-expense ratios will be used to determine whether Raol Guest House is
spending too much or too little on marketing the Services in order to achieve its sales goals The following
sales-to-expense ratios will be used
advertising to sales
sales force size to sales
sales promotion to sales
marketing research to sales
Profitability control
Profitability control will help Raol Guest House to evaluate and improve spending and examine whether it
is making profits or losses The following measures will be taken to control its profitability
Sales revenue and costs from the previous year will be compared to that of the current year
Actual and estimated profits will also be compared to determine differences
A cost control system will be developed to maintain costs that remain within the specified budget
Efficiency control
Efficiency control will be used to evaluate and improve the spending efficiency and impact of marketing
expenditures The efficiency of sales force advertising sales promotion and distribution will be moni-
tored
Strategic control
The purpose of strategic control is to examine whether Raol Guest House is pursuing its best opportunities
with respect to markets products and channels The following marketing tools will be used
marketing effectiveness rating instrument
marketing audit
marketing excellence review
company ethical and social responsibility review
20
REFERENCES
BELCH GE AND BELCH MA 2007 Advertising and promotion an integrated marketing communi-
cation perspective In IrwinMcGraw Hill 7th ed Boston Massachusetts 45
FERREL O C and HARTLINEMD 2008 Marketing Strategy Mason Thomson Higher Education
KOEGEL K 2010 ldquoBuilding Brands Onlinerdquo Ad Age Insights October 11
KOTLER P ANG SH LEONG SM and TAN CT 1999 Marketing Management An AsianPer-
spective 2nd Ed Prentice Hall
LANCASTER G AND REYNOLDS P 2005Management of Marketing Burlington Elsevier Butter-
worth ndash Heinemann
WEBSITES httpsquizletcom30731376casino-management-exam-2-flash-cards
httpfacultyjwuedupbagdanHOSP3050worksheetsch14_worksheetdoc
httpfacultyjwuedupbagdanHOSP3050worksheetsCHAPTER2014doc
4
COMPANY DESCRIPTION
Raol Guest House (current situation)
Your Origins Can Never Be Replaced
Lying on the north east coast of Mauritius Raol Guest House is a luxurious guesthouse comprising of 50
rooms at Poste de Flacq It offers 247 guaranteed hospitality care and good time Its personnel are always
at the guests‟ disposal to make their time a memorable one during their stay at the Raol Guest House
Raol Guest House guesthouse was born in 2013 It was created under an eco-green program which aimed
at giving back to nature its importance in our customers‟ lives and makes them experience its surprising
benefits Its slogan ldquoYour Origins can Never be Replacedrdquo which means returning to our roots be closer
to who we are by being farther from what makes us who we are not describes best the way the guesthouse
is built and maintained You are sure to feel one with nature and be overwhelmed with the amount of ac-
tivities available at the guesthouse
The guestsrsquo areas
The layout of these areas must ensure a high level of personal safety and security for the guests and their
property and also enable to render effective service
Public guests areas
Public guests‟ areas are for the exclusive use for the guests and their visitors The following places are re-
garded as public areas which are available in the guest house
The entrance hall
The reception area or office also called the bdquofront desk‟
The guests waiting area close to the reception
Guests toilet
The dining room or breakfast room
Smoking areas and
Halls stairways landing and passages
The purpose of a guest house is to provide temporary accommodation for families while they are on travel
in Mauritius It also provides a safe comfortable and cost-effective alternative to hotels and other tempo-
rary residences when such facilities are non-existent limited unsafe or excessively overpriced There are
other facilities available in the guest house which are
-Breakfast Lunch amp Diner
-Car Rental
-Taxi on request
5
Raol Guest House offers Hospitality services like accommodation food and beverages business service
and leisure
ACCOMODATION
Each room is decorated in tropical pastel paints prints and handcrafted furniture equipped with cable
satellite TVair-conditioningceiling fans hair dryer direct dial telephone bath-tubshower and a balcony
Standard rooms are configured with either a King-Size bed or two twin beds in the sea and Mountain
View the road view has two double beds The guesthouse is built on two levels featuring a living room
with a bar area and a restaurant on the floor The 15 Junior Suites were fitted with a double bed or two
twin beds as well as a living room area with a sofa that converted to another bed
The meal plans are most flexible Bed amp Breakfast or accommodation only as all units is self-catering
with dedicated housemaids to prepare your meals according to the guests‟ wishes Creole European or In-
dian dishes are possible The maids also look after the washing and ironing and take care of any grocery
shopping if so required Fresh food gets delivered daily at current market prices
Moreover Raol Guest House carries a Full Fire Certificate which some guesthouses‟ do not provide
The Raol Guest House still thriving in 2013 after 1 year in business would like to boost up its image by
adding more services to attract more customers and thus expand its clientele In addition the restaurant
serving breakfasts and menu dinners upon request is open to outsiders and is very much appreciated by the
neighbourhood
Mission Statement
ldquoTo ensure that each guest receives prompt professional friendly and courteous service To maintain a
clean comfortable and well maintained premises for our guests and staff To provide our guests a memo-
rable time ndash that will make them smile every time they think about Raol Guest House To ensure that all
guests and staff are treated with the respect and dignity they deserve To thank each guest for the oppor-
tunity to serve them By maintaining these objectives we shall be assured of a fair profit that will allow us
to contribute to the community we serverdquo
Vision
ldquo To become Mauritiusrsquo leading guest house for the best service offered for the warmest welcome to our
residents to become the most renowned for event management and to offer the most delicious and healthy
food on the island and all that by staying as close and friendly to nature as possible
6
COMPETITIVE ADVANTAGE
Competitive advantage is defined as a strategic advantage one business entity has over its rival entities
within its competitive industry Achieving competitive advantage strengthens and positions a business bet-
ter within the business environment Competitive advantage of guest house focuses on the leisure of peo-
ple It is essential to produce new and innovative ideas to differentiate a service from others of the same
nature
Customer analysis
Customers are the reason for an organisation to be in business Raol Guest house offers a wide range of
services its present customers are mainly local residents and tourists who come for a family vacation of
about 15 days Now Raol Guest House wants to exploit the market further by providing customer satisfac-
tion
Market analysis
The market size of Raol Guest House has significantly increased due to the following factors
1 Customer Satisfaction
It has been observed that customers have been visiting them again and also to see that customers‟ feed-
backs are positive at all times This shows that the customers are satisfied with the way they are being
treated each time
2 Consistent staff training
Raol Guest House strategy is to provide consistent staff training so a training program was developed
which all key staff members staff members would undertake and was designed was an integrated multi-
faceted package that featured a mix of workshops videos training on new standards and included clearly
set-out objectives This unique approach to training facilitated the avoidance of bdquoone-size-fits-all‟ philoso-
phy which often proves ideal when creating a global brand but for the resort it was vital for each to pre-
serve elements of individuality The service delivery was overhauled and consistency was introduced
3 Increase turnover
Raol Guest House has been hiring employees who are competent and this reduces expenses associated
with incompetent employees the hotel also employs employees who are loyal and those who do not en-
gage in unethical behaviours that consume the expected profits The Raol Guest House has been making
profits all the time this indicates that the strategies put in place Human resource strategies have been ef-
fective and have assisted the guest house in increasing its sales and turnover and eventually higher profits
7
4 Innovated Services
Raol Guest House has excellent employees who have a keen eye to innovation they come up with strate-
gies that ensure that hotel stays on top and some of the innovations include furnishing the rooms in a mod-
ern way making sure that the customer‟s needs are achieve Innovative employees of the Raol Guest House
are rewarded or given opportunities to further their innovation through education in institutions that offer
hospitality course innovative means that employee are given opportunities to meet and exchange ideas
with other employees from resorts
5Low prices compared to hotels
It has been observed that Raol Guest House offers many services at a considerable low price
STATEMENT FOR MARKETING OBJECTIVES AND FINANCIAL OB-
JECTIVES
Marketing objectives
There is an idea of making the guesthouse more available to the Mauritians who until now could not really
access the guest house to the high charges The department also decided to make the guest house more re-
nowned in Mauritius They want to manage events on the left wing of the guesthouse where a big hall
kitchens and many big rooms will be constructed
The space the guest house already has but which is unused will thus become a source of income to the or-
ganisation The idea is to make the guest house into an event management company as well The marketing
department has already planned how to prevent noises from disturbing the guest house residents They plan
to make another entry and exit for the left wing and also protect the whole guest house with soundproof
walls
Despite the complexity of the whole plan the marketing department is sure that this will help boost up the
image of Raol Guest House and allow people to plan their marriage birthdays business meetings in a nat-
ural place where ecology and tranquillity is a priority to the direction of the guest house Also is it that
Raol Guest House will also offer various cuisines in its restaurant called ldquoDelices de la Naturerdquo where in-
stead of offering only traditional Mauritian food all kind of food will be available to the residents such as
Indian food Chinese food Italian food and European food To be able to offer only the best delicacies to
our customers four specialised chefs will be recruited
8
assistance An extended ndash stay resident wants an in-room kitchen Conventioneers want large meeting
rooms preplanned sightseeing and hospitality suites
Resolve consumer complaints more effectively because business travellers are quite concerned about one-
booking long waiting lines late check-in times Moreover Raol Guest House is dealing for alternative ac-
commodation in case that they are over-booked computerizing check-ins offering express checkouts
( bills are placed under room doors or mailed to guests‟ room doors or mailed to guest‟ businesses or
homes)serving free drinks and providing baggage handling if check-in times are late
All these objectives allow the clients of Raol Guest House to enjoy a memorable and amazing time
Financial Objectives
The financial objectives of the company are listed below
Achieve sales revenue of Rs 150000 in year 2015 and Rs 1 million in year 2018
Achieve 5 growth in sales in the niche market of guesthouses
Ensure a positive cash flow from operating investing and financing activities
9
SWOT ANALYSIS
SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses and for identi-
fying both the Opportunities open to you and the Threats you face
Situation analysis in which internal strengths and weaknesses of an organization and exter-
nal opportunities and threats faced by it are closely examined to chart a strategy SWOT stands
for strengths weaknesses opportunities and threats Below is the SWOT Analysis of Raol Guest House
MARKET RESEARCH
Market research has been carried out Both primary and secondary data have been collected Primary
data has been collected by the customers while the secondary data has been gathered through internet
researches
10
SEGMENTATION
Hotel consumers are varied in a number of aspects Their respective differences often provide a challenge
for firms trying to meet and exceed consumer productservice expectations Smith (1956) defines market
segmentation as a competition defense mechanism in response to differing consumer demand It allows a
firm to divide a heterogeneous market of products and services into smaller homogenous units (Smith
1956) The segment identifies existing and potential consumers and aligns them with the products and ser-
vices that may satisfy a greater number of their specific needs (Smith 1956 amp Forsyth 2009) An industry
with a segmented market allows for the examination of the intrinsic and extrinsic factors that can influ-
ence the consumer‟s decision making in reference to the given product or service Implementing market
segmentation strategies are expected to allow the firm to better target their consumers The segmentation
that Raol Guest House will be using to launch its new product is divided into two groups namely
Geographic Segmentation
It is the division of the market into different geographic units including nations states regions or neigh-
borhoods (Belch amp Belch 2007) Raol Guest House will aim at different countries such as Comoros
Kenya Madagascar Mayotte Reunion Seychelles South Africa and Zimbabwe
Demographic Segmentation
It refers to the division of the market on the basis of demographic variables such as age gender family
size education income and social class Raol Guest House will also be sold in a low price allowing high
class middle class and low class family to purchase the service
TARGETING
Raol Guest House also aims at target one or more segments business travellers through tourists (who stay
one night) regular tourists (who stay 2 or more nights) extended stay residents (who stay up to several
months or longer and conventioneers
11
POSITIONING
To combat the effects of a competitive market environment and to position itself Treacy and Wiersema
suggests three value disciplines which firms should focus their operation (1995) The disciplines Opera-
tional Excellence ProductService Leadership and Customer Intimacy
Operational Excellence
Operational Excellence pertains to the firm‟s ability to provide ldquomiddle-of-the-market products at the best
price with the least inconveniencerdquo to the consumer (Treacy amp Wiersema 1995 p xii) Raol Guest House
focusing on this discipline will utilize a ldquocost reduction in operationsrdquo while still providing reliable prod-
ucts and services at a competitive price (Riemann amp et al 2009 p 4) The firm‟s managers must pay close
attention to cost controls if they seek to achieve an optimized business process (Riemann amp et al 2009
Porter 1980) Raol Guest House utilizing lower costing operational procedures will yield greater returns
when compared to their competitors (Porter 1980)
ProductService Leadership
ProductService Leadership references how the firm strives to offer the best available product or service
(Treacy amp Wiersema 1995) This value discipline relates to the differentiation strategies that the firm may
implement The offered product or service may exceed competing offerings by ldquodesign technology fea-
tures customer servicerdquo or other complex element (Porter 1980 p 36) Strategies focused around
productservice e leadership allow the firm to narrow their business focus to providing the best available
offerings to improve their leadership position (Treacy amp Wiersema 1995) A lodging firm utilizing en-
hanced products and services is further attempting to improve the consumer‟s quality of stay (Riemann amp
et al 2009) This value discipline is expected to yield ldquoabove-average returnsrdquo as it encourages consumer
ldquobrand loyaltyrdquo 30 and a lower threshold for price sensitivity (Porter 1980 p38) The firm develops a
competitive advantage by being at the forefront of product or service innovation (Treacy amp Wiersema
1995)
Customer Intimacy
Customer Intimacy references the firm‟s ability to provide customizable products and services that cater to
the needs and requests of their individual guests (Riemann amp et al 2009) This value discipline is focused
on ldquoserving a particular target [market] very wellrdquo (Porter 1980 p 38) The firm strategically works to-
wards providing a consumer solution oppose to a service (Treacy amp Wiersema 1995) Establishing and
maintaining intimate consumer relationships is important to this discipline (Treacy amp Wiersema 1995)
The firm recognizes the consumers‟ ldquolifetime valuerdquo and attempts to establish lasting consumer loyalty
(Treacy amp Wiersema 1995 p 41) The market strategies developed around this discipline aim to provide
products and services that meet or exceed the specific needs of the consumer McGuire suggests that firms
should strive towards these strategies as they aid the consumer in understanding and differentiating the
uniqueness between competing firms (2009)
12
MARKETING MIX
ldquoThe marketing mix concept is a well-established tool used as a structure by marketers It consists of the
various elements of a marketing programmed which need to be considered in order to successfully imple-
ment the marketing strategy and positioning in the company‟s market It is the important internal elements
or ingredients that make up an organization‟s marketing programmerdquo- Adrian Payne
Product
ldquoA product is anything that can be offered to a market for attention use or consumption that might satisfy a
want or a need It includes physical objects services places organisations and ideasrdquo KotlerBowen and
Makens
In the tourism industry there is no production of goods but rather this industry provides a myriad of ser-
vices and experiences The service that Raol Guest House procures has special characteristics
Intangibility
Services can be purchased but cannot be seen touched or tasted ndashthey are intangible The heart of a service
is the experience created for the customer In choosing Raol Guest House a customer might look to the ad-
ditional services that Raol Guest House offers to its customers
Inseparability
The service is created and consumed at the same time Therefore the client and employee are both in-
volved during this process During this process it is vital to keep the same standard of service when deliv-
ering to its customers
Heterogeneity
No 2 customers will demand exactly the same service they will have different de-
mandsexpectationstastesmoodsperceptions and emotions ( George200121)
Lack of ownership
In this conceptthe customer has nothing to take away except hisher experienceMost of the services are of
ldquo temporary use‟ and the memories arising from there Like for Raol Guest Housea room will only be
served to enhance or degrade their experience of the service being provided
Perishability
The hospitality offered by the Raol Guest House cannot be storedsaved or reuse-it is perishable
Some new services could be generated A babyndash sitting service a 24 hour room service car rental Fur-
thermore a fitness studio can be set up which will give more profit and a bit of modern touch to the Raol
Guest House Other services like organising transport facilities for their guests suggesting plans of inter-
ests in the area organising tours bookings can be offered Vacation packages also can be offered
13
Price
Price is the value that is placed on something Price is an indispensable element in the marketing mix since
it generated revenue and it is the only basis of recovering the costs and profitsZeithaml ( 1998 ) claimed
that the customers will think whether they received the value of money or before they decide to return the
purchase from the service provider Raol Guest House can adopt a seasonal pricing where the price paid for
a particular service can be during a certain time or period only or even price flexibility also can be em-
braced which is an unstable amount that can be paid for the same services by two different customers or it
can be adjustable price for different customers with the same service depending on the customer relation-
ship ( Keyes 2010104)
Physical Evidence
This factor refers to the ability and environment in which the service will be delivered For example the
interior and exterior decoration its furnishing lights Moreover Raol Guest House will have its own bro-
chures will be available for its customers This service scope includes three physical environment dimen-
sions that represent the relation between services and environment namely
1Environmental conditions such as temperaturesoundsmell
2Space and functions such as mapequipementdecoration
3Signssymbols and artefacts such as decoration style
The more intangible the service the more important it is to make the service around it tangible The physi-
cal evidence serves as a visual metaphor of what the company represents what services it facilitates and
the relations between customers and employees
People
All the staff being employed at Raol Guest House will be the locals since they are more acquainted with
the local tastes The personnel will be trained at a regular basis so as to keep them updated and also to be
able to meet up the customers‟ expectations In this way Raol Guest House will be able to bdquoadd value‟ to
its service through its employees Also the employees will be able to have a good clientele with the cus-
tomers In this way the staff will learn about the guests‟ likes and dislikes thus with this knowledge the
personnel can provide an improved experience to the tourists who would lead to an increased in the profita-
bility margin The resources that Raol Guest House has are its workers from waiter to the General Manag-
er each of them is recruited according to skills qualifications and work experience They are recruited
from Sir Gaeumltan Duval Hotel School Moreover Raol Guest House also encourages continuous training
which will help the employees to create innovate and communicate effectively
14
Process
A process is a flow of activities At Raol Guest House the process is simple since it operated at a small
scale The process is more coordinated according to the needs of the customers
15
Place
Place refers to the physical and virtual environment ambiance staff and activities and at the point of ser-
vice offering The atmosphere and the physical environment are the specific factors that each guest house
getsAccessibility is a critical element of place as it represents the extent to which markets and destinations
are connected (Weaver and Oppermann 2000) The location where Raol Guest House is situated is a highly
tourist attraction The guest house has 35 standard rooms are categorized into 3 groups-(Sea view Moun-
tain View and Road view)
Promotion
Promotion has got a vital role in promoting a destinationit enables to communicate with individual
groups organisations to directly or indirectly facilitate exchange by informing and persuading the different
market segments to welcome the choice of the destination being promoted
A successful promotion strategy is devised by having a push and pull promotion
According to Kotler (2001 pg531)
ldquoA push strategy involves pushing the product through distribution channels to final consumers The prod-
uct directs it marketing activities (personnel selling and trade promotion) toward channel members to in-
clude them to carry the product and to promote it to final consumers Using a pull strategy the producer
directs its marketing activities (primarily advertising and consumer promotions) towards final consumers to
induce them buy the productrdquo
Push strategy is also known as ldquotaking the product to the consumer ldquo The push promotional strategy in-
volves taking the leisure product directly to the customer This can be achieved by making use of any
means and the final aim is to ensure that the customer is aware of the guesthouse‟s name providing the lei-
sure activity at the point of purchase One example of the push promotional strategy is the point of sale
displays in the guesthouse lobby
Pull strategy is also known as ldquoGetting the customer to come to yourdquo The pull strategy is to motivate the
tourists in such a way that they are themselves encouraged to come and seek leisure facilities in the guest-
house One example of the pull strategy is advertising and mass media promotion
According to Kotler (2001) there are five strategy promotional mix they are
Advertising
Advertising is any form of non-personal communication from an identified sponsor about the organization
and its services using the media to influence a target market (Blech amp Blech 1998 Wells Burnett amp Mori-
aty 1998 Zikmund amp D‟amico 1996) This is to inform potential customers about the products that the
organization is offering and to persuade them to buy it Some examples of advertising can be yellow pages
local newspapers radio trade journals exhibitions and websites
16
Sales promotion
It is providing the customers with the basic service adding further appealing packages to it This can help to
achieve customer loyalty and as the same time attract new customers
Public Relations
Public Relations (PR) are defined by the British Institute of Public Relations as the planned and sustained
effort to establish and maintain goodwill between an organisation and its public Public Relations are ex-
tensively used in the tourism industry as a way of communicating with potential customers
Public Relations can also be defined as any group that has actual or potential interest on a company‟s abil-
ity to achieve its objectives (Kotler 2000)
PR is concerned with a number of marketing tasks These include the following
Building or maintaining image
Supporting the other communication activities
Handling problems and issues reinforcing position
Influencing specific publics
Direct Marketing
Direct marketing is to carry out a market research from time to time to know about the exact needs and
wants of the customers and to cater for them This component of the promotional mix does not use the tra-
ditional formal channels of advertising instead it is done through fliers catalogue distribution and promo-
tional letters
Personal Selling
Personal selling is to communicate orally with a potential customer of the leisure activity with the intention
to make a sale This is the most effective form of promotion as the customer is able to get the exact service
and information that she is expecting
17
STRATEGIC PLANNING APPROACHES
The Productmarket opportunity matrix (Ansoff Matrix) has been used to show strategic planning approach
that the company will adopt
Market Penetration
An organisation pursuing a market penetration strategy is aiming to sell more of its existing products in ex-
isting markets To support a market penetration strategy an organisation must make sure that it maintains
and builds the competences that are relevant to the particular market and that it has the relevant capacity to
meet higher levels of demand Raol Guest House can make use of the following strategies make use of ag-
gressive Make use of aggressive advertisement television radio newspapers health conscious magazines
and internet Build customer loyalty by providing discounts on cumulative purchases Offer discount cou-
pon for old customers
Productservice Development
This strategy involves the organisation operating in its existing markets and developing innovative or modi-
fied versions of its existing products to appeal to those markets For an effective product development
strategy an organisation must either be able to build on its existing competences or acquire new ones but it
does allow the organisation to exploit its existing knowledge of its customersRaol Guest House can Devel-
op new types of services like Spa
18
Market Development
This strategy entails expanding into new markets with existing products which are at the most only
slightly modified for the new market These may be new markets geographically new market segments
or new uses for products Whatever the market this approach to growth depends upon the existence of
new consumer groups who are willing and able to buy the existing product The company can look for
international markets like the European Countries enter new market segments market through Social
media (eg Facebook)
Diversification
Diversification involves the organisation moving into new markets with new products Diversification
may become necessary when none of the alternative mechanisms for generating growth are feasible and
is generally thought to be the more risky route to growth But for Raol Guest House for the time being it
can concentrate on the three above strategies since they carry lower risks as the organisation has some
experience in it By contrast the fourth strategy - diversification is much more risky because the organi-
sation is moving into areas in which it has little or no experience As a consequence the instances of
pure diversification are rare When diversification is undertaken the risks can be reduced by concentrat-
ing on either familiar markets or familiar technologies Moving into new markets with products which
require new technologies constitutes the riskiest and also the rarest form of diversification In the long-
runRaol Guest House can opt to diversify
CONTROLS AND EVALAUTION
Implementation
The marketing manager will coordinate the marketing activities that are crucial in achieving the finan-
cial and marketing objectives of the company Raol GuestHouse requires the marketing department to
maintain its professional integrity looking out for its marketing goals and implementing the marketing
programmes as best fits its strategy
Controls
To maximise the return on a marketing plan there need to be controls in place to monitor the plans pro-
gress Control is not a singular thing but a host of tools for making sure that the company is on track
Raol GuestHouse will be using four types of controls to monitor the service marketing plan progress
Annual plan control
The purpose of the annual plan control is to ensure that Raol GuestHouse achieves the sales profits and
other goals established in the marketing plan
Sales analysis - Actual sales will be compared to sales targets and budgets and an analysis of any vari-
ance between the two will be carefully examined
Market share analysis - Raol Guest House will be using overall market share served market share and
19
Customer attitude tracking - Raol Guest House will monitor customer feedback through polls and surveys
The company will carry out customer surveys by phone or in person and host online polls to gauge what
customers feel about the Services The company will also implement a customer complaint and suggestion
scheme to increase customer satisfaction level
Sales-to-expense ratios - Sales-to-expense ratios will be used to determine whether Raol Guest House is
spending too much or too little on marketing the Services in order to achieve its sales goals The following
sales-to-expense ratios will be used
advertising to sales
sales force size to sales
sales promotion to sales
marketing research to sales
Profitability control
Profitability control will help Raol Guest House to evaluate and improve spending and examine whether it
is making profits or losses The following measures will be taken to control its profitability
Sales revenue and costs from the previous year will be compared to that of the current year
Actual and estimated profits will also be compared to determine differences
A cost control system will be developed to maintain costs that remain within the specified budget
Efficiency control
Efficiency control will be used to evaluate and improve the spending efficiency and impact of marketing
expenditures The efficiency of sales force advertising sales promotion and distribution will be moni-
tored
Strategic control
The purpose of strategic control is to examine whether Raol Guest House is pursuing its best opportunities
with respect to markets products and channels The following marketing tools will be used
marketing effectiveness rating instrument
marketing audit
marketing excellence review
company ethical and social responsibility review
20
REFERENCES
BELCH GE AND BELCH MA 2007 Advertising and promotion an integrated marketing communi-
cation perspective In IrwinMcGraw Hill 7th ed Boston Massachusetts 45
FERREL O C and HARTLINEMD 2008 Marketing Strategy Mason Thomson Higher Education
KOEGEL K 2010 ldquoBuilding Brands Onlinerdquo Ad Age Insights October 11
KOTLER P ANG SH LEONG SM and TAN CT 1999 Marketing Management An AsianPer-
spective 2nd Ed Prentice Hall
LANCASTER G AND REYNOLDS P 2005Management of Marketing Burlington Elsevier Butter-
worth ndash Heinemann
WEBSITES httpsquizletcom30731376casino-management-exam-2-flash-cards
httpfacultyjwuedupbagdanHOSP3050worksheetsch14_worksheetdoc
httpfacultyjwuedupbagdanHOSP3050worksheetsCHAPTER2014doc
5
Raol Guest House offers Hospitality services like accommodation food and beverages business service
and leisure
ACCOMODATION
Each room is decorated in tropical pastel paints prints and handcrafted furniture equipped with cable
satellite TVair-conditioningceiling fans hair dryer direct dial telephone bath-tubshower and a balcony
Standard rooms are configured with either a King-Size bed or two twin beds in the sea and Mountain
View the road view has two double beds The guesthouse is built on two levels featuring a living room
with a bar area and a restaurant on the floor The 15 Junior Suites were fitted with a double bed or two
twin beds as well as a living room area with a sofa that converted to another bed
The meal plans are most flexible Bed amp Breakfast or accommodation only as all units is self-catering
with dedicated housemaids to prepare your meals according to the guests‟ wishes Creole European or In-
dian dishes are possible The maids also look after the washing and ironing and take care of any grocery
shopping if so required Fresh food gets delivered daily at current market prices
Moreover Raol Guest House carries a Full Fire Certificate which some guesthouses‟ do not provide
The Raol Guest House still thriving in 2013 after 1 year in business would like to boost up its image by
adding more services to attract more customers and thus expand its clientele In addition the restaurant
serving breakfasts and menu dinners upon request is open to outsiders and is very much appreciated by the
neighbourhood
Mission Statement
ldquoTo ensure that each guest receives prompt professional friendly and courteous service To maintain a
clean comfortable and well maintained premises for our guests and staff To provide our guests a memo-
rable time ndash that will make them smile every time they think about Raol Guest House To ensure that all
guests and staff are treated with the respect and dignity they deserve To thank each guest for the oppor-
tunity to serve them By maintaining these objectives we shall be assured of a fair profit that will allow us
to contribute to the community we serverdquo
Vision
ldquo To become Mauritiusrsquo leading guest house for the best service offered for the warmest welcome to our
residents to become the most renowned for event management and to offer the most delicious and healthy
food on the island and all that by staying as close and friendly to nature as possible
6
COMPETITIVE ADVANTAGE
Competitive advantage is defined as a strategic advantage one business entity has over its rival entities
within its competitive industry Achieving competitive advantage strengthens and positions a business bet-
ter within the business environment Competitive advantage of guest house focuses on the leisure of peo-
ple It is essential to produce new and innovative ideas to differentiate a service from others of the same
nature
Customer analysis
Customers are the reason for an organisation to be in business Raol Guest house offers a wide range of
services its present customers are mainly local residents and tourists who come for a family vacation of
about 15 days Now Raol Guest House wants to exploit the market further by providing customer satisfac-
tion
Market analysis
The market size of Raol Guest House has significantly increased due to the following factors
1 Customer Satisfaction
It has been observed that customers have been visiting them again and also to see that customers‟ feed-
backs are positive at all times This shows that the customers are satisfied with the way they are being
treated each time
2 Consistent staff training
Raol Guest House strategy is to provide consistent staff training so a training program was developed
which all key staff members staff members would undertake and was designed was an integrated multi-
faceted package that featured a mix of workshops videos training on new standards and included clearly
set-out objectives This unique approach to training facilitated the avoidance of bdquoone-size-fits-all‟ philoso-
phy which often proves ideal when creating a global brand but for the resort it was vital for each to pre-
serve elements of individuality The service delivery was overhauled and consistency was introduced
3 Increase turnover
Raol Guest House has been hiring employees who are competent and this reduces expenses associated
with incompetent employees the hotel also employs employees who are loyal and those who do not en-
gage in unethical behaviours that consume the expected profits The Raol Guest House has been making
profits all the time this indicates that the strategies put in place Human resource strategies have been ef-
fective and have assisted the guest house in increasing its sales and turnover and eventually higher profits
7
4 Innovated Services
Raol Guest House has excellent employees who have a keen eye to innovation they come up with strate-
gies that ensure that hotel stays on top and some of the innovations include furnishing the rooms in a mod-
ern way making sure that the customer‟s needs are achieve Innovative employees of the Raol Guest House
are rewarded or given opportunities to further their innovation through education in institutions that offer
hospitality course innovative means that employee are given opportunities to meet and exchange ideas
with other employees from resorts
5Low prices compared to hotels
It has been observed that Raol Guest House offers many services at a considerable low price
STATEMENT FOR MARKETING OBJECTIVES AND FINANCIAL OB-
JECTIVES
Marketing objectives
There is an idea of making the guesthouse more available to the Mauritians who until now could not really
access the guest house to the high charges The department also decided to make the guest house more re-
nowned in Mauritius They want to manage events on the left wing of the guesthouse where a big hall
kitchens and many big rooms will be constructed
The space the guest house already has but which is unused will thus become a source of income to the or-
ganisation The idea is to make the guest house into an event management company as well The marketing
department has already planned how to prevent noises from disturbing the guest house residents They plan
to make another entry and exit for the left wing and also protect the whole guest house with soundproof
walls
Despite the complexity of the whole plan the marketing department is sure that this will help boost up the
image of Raol Guest House and allow people to plan their marriage birthdays business meetings in a nat-
ural place where ecology and tranquillity is a priority to the direction of the guest house Also is it that
Raol Guest House will also offer various cuisines in its restaurant called ldquoDelices de la Naturerdquo where in-
stead of offering only traditional Mauritian food all kind of food will be available to the residents such as
Indian food Chinese food Italian food and European food To be able to offer only the best delicacies to
our customers four specialised chefs will be recruited
8
assistance An extended ndash stay resident wants an in-room kitchen Conventioneers want large meeting
rooms preplanned sightseeing and hospitality suites
Resolve consumer complaints more effectively because business travellers are quite concerned about one-
booking long waiting lines late check-in times Moreover Raol Guest House is dealing for alternative ac-
commodation in case that they are over-booked computerizing check-ins offering express checkouts
( bills are placed under room doors or mailed to guests‟ room doors or mailed to guest‟ businesses or
homes)serving free drinks and providing baggage handling if check-in times are late
All these objectives allow the clients of Raol Guest House to enjoy a memorable and amazing time
Financial Objectives
The financial objectives of the company are listed below
Achieve sales revenue of Rs 150000 in year 2015 and Rs 1 million in year 2018
Achieve 5 growth in sales in the niche market of guesthouses
Ensure a positive cash flow from operating investing and financing activities
9
SWOT ANALYSIS
SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses and for identi-
fying both the Opportunities open to you and the Threats you face
Situation analysis in which internal strengths and weaknesses of an organization and exter-
nal opportunities and threats faced by it are closely examined to chart a strategy SWOT stands
for strengths weaknesses opportunities and threats Below is the SWOT Analysis of Raol Guest House
MARKET RESEARCH
Market research has been carried out Both primary and secondary data have been collected Primary
data has been collected by the customers while the secondary data has been gathered through internet
researches
10
SEGMENTATION
Hotel consumers are varied in a number of aspects Their respective differences often provide a challenge
for firms trying to meet and exceed consumer productservice expectations Smith (1956) defines market
segmentation as a competition defense mechanism in response to differing consumer demand It allows a
firm to divide a heterogeneous market of products and services into smaller homogenous units (Smith
1956) The segment identifies existing and potential consumers and aligns them with the products and ser-
vices that may satisfy a greater number of their specific needs (Smith 1956 amp Forsyth 2009) An industry
with a segmented market allows for the examination of the intrinsic and extrinsic factors that can influ-
ence the consumer‟s decision making in reference to the given product or service Implementing market
segmentation strategies are expected to allow the firm to better target their consumers The segmentation
that Raol Guest House will be using to launch its new product is divided into two groups namely
Geographic Segmentation
It is the division of the market into different geographic units including nations states regions or neigh-
borhoods (Belch amp Belch 2007) Raol Guest House will aim at different countries such as Comoros
Kenya Madagascar Mayotte Reunion Seychelles South Africa and Zimbabwe
Demographic Segmentation
It refers to the division of the market on the basis of demographic variables such as age gender family
size education income and social class Raol Guest House will also be sold in a low price allowing high
class middle class and low class family to purchase the service
TARGETING
Raol Guest House also aims at target one or more segments business travellers through tourists (who stay
one night) regular tourists (who stay 2 or more nights) extended stay residents (who stay up to several
months or longer and conventioneers
11
POSITIONING
To combat the effects of a competitive market environment and to position itself Treacy and Wiersema
suggests three value disciplines which firms should focus their operation (1995) The disciplines Opera-
tional Excellence ProductService Leadership and Customer Intimacy
Operational Excellence
Operational Excellence pertains to the firm‟s ability to provide ldquomiddle-of-the-market products at the best
price with the least inconveniencerdquo to the consumer (Treacy amp Wiersema 1995 p xii) Raol Guest House
focusing on this discipline will utilize a ldquocost reduction in operationsrdquo while still providing reliable prod-
ucts and services at a competitive price (Riemann amp et al 2009 p 4) The firm‟s managers must pay close
attention to cost controls if they seek to achieve an optimized business process (Riemann amp et al 2009
Porter 1980) Raol Guest House utilizing lower costing operational procedures will yield greater returns
when compared to their competitors (Porter 1980)
ProductService Leadership
ProductService Leadership references how the firm strives to offer the best available product or service
(Treacy amp Wiersema 1995) This value discipline relates to the differentiation strategies that the firm may
implement The offered product or service may exceed competing offerings by ldquodesign technology fea-
tures customer servicerdquo or other complex element (Porter 1980 p 36) Strategies focused around
productservice e leadership allow the firm to narrow their business focus to providing the best available
offerings to improve their leadership position (Treacy amp Wiersema 1995) A lodging firm utilizing en-
hanced products and services is further attempting to improve the consumer‟s quality of stay (Riemann amp
et al 2009) This value discipline is expected to yield ldquoabove-average returnsrdquo as it encourages consumer
ldquobrand loyaltyrdquo 30 and a lower threshold for price sensitivity (Porter 1980 p38) The firm develops a
competitive advantage by being at the forefront of product or service innovation (Treacy amp Wiersema
1995)
Customer Intimacy
Customer Intimacy references the firm‟s ability to provide customizable products and services that cater to
the needs and requests of their individual guests (Riemann amp et al 2009) This value discipline is focused
on ldquoserving a particular target [market] very wellrdquo (Porter 1980 p 38) The firm strategically works to-
wards providing a consumer solution oppose to a service (Treacy amp Wiersema 1995) Establishing and
maintaining intimate consumer relationships is important to this discipline (Treacy amp Wiersema 1995)
The firm recognizes the consumers‟ ldquolifetime valuerdquo and attempts to establish lasting consumer loyalty
(Treacy amp Wiersema 1995 p 41) The market strategies developed around this discipline aim to provide
products and services that meet or exceed the specific needs of the consumer McGuire suggests that firms
should strive towards these strategies as they aid the consumer in understanding and differentiating the
uniqueness between competing firms (2009)
12
MARKETING MIX
ldquoThe marketing mix concept is a well-established tool used as a structure by marketers It consists of the
various elements of a marketing programmed which need to be considered in order to successfully imple-
ment the marketing strategy and positioning in the company‟s market It is the important internal elements
or ingredients that make up an organization‟s marketing programmerdquo- Adrian Payne
Product
ldquoA product is anything that can be offered to a market for attention use or consumption that might satisfy a
want or a need It includes physical objects services places organisations and ideasrdquo KotlerBowen and
Makens
In the tourism industry there is no production of goods but rather this industry provides a myriad of ser-
vices and experiences The service that Raol Guest House procures has special characteristics
Intangibility
Services can be purchased but cannot be seen touched or tasted ndashthey are intangible The heart of a service
is the experience created for the customer In choosing Raol Guest House a customer might look to the ad-
ditional services that Raol Guest House offers to its customers
Inseparability
The service is created and consumed at the same time Therefore the client and employee are both in-
volved during this process During this process it is vital to keep the same standard of service when deliv-
ering to its customers
Heterogeneity
No 2 customers will demand exactly the same service they will have different de-
mandsexpectationstastesmoodsperceptions and emotions ( George200121)
Lack of ownership
In this conceptthe customer has nothing to take away except hisher experienceMost of the services are of
ldquo temporary use‟ and the memories arising from there Like for Raol Guest Housea room will only be
served to enhance or degrade their experience of the service being provided
Perishability
The hospitality offered by the Raol Guest House cannot be storedsaved or reuse-it is perishable
Some new services could be generated A babyndash sitting service a 24 hour room service car rental Fur-
thermore a fitness studio can be set up which will give more profit and a bit of modern touch to the Raol
Guest House Other services like organising transport facilities for their guests suggesting plans of inter-
ests in the area organising tours bookings can be offered Vacation packages also can be offered
13
Price
Price is the value that is placed on something Price is an indispensable element in the marketing mix since
it generated revenue and it is the only basis of recovering the costs and profitsZeithaml ( 1998 ) claimed
that the customers will think whether they received the value of money or before they decide to return the
purchase from the service provider Raol Guest House can adopt a seasonal pricing where the price paid for
a particular service can be during a certain time or period only or even price flexibility also can be em-
braced which is an unstable amount that can be paid for the same services by two different customers or it
can be adjustable price for different customers with the same service depending on the customer relation-
ship ( Keyes 2010104)
Physical Evidence
This factor refers to the ability and environment in which the service will be delivered For example the
interior and exterior decoration its furnishing lights Moreover Raol Guest House will have its own bro-
chures will be available for its customers This service scope includes three physical environment dimen-
sions that represent the relation between services and environment namely
1Environmental conditions such as temperaturesoundsmell
2Space and functions such as mapequipementdecoration
3Signssymbols and artefacts such as decoration style
The more intangible the service the more important it is to make the service around it tangible The physi-
cal evidence serves as a visual metaphor of what the company represents what services it facilitates and
the relations between customers and employees
People
All the staff being employed at Raol Guest House will be the locals since they are more acquainted with
the local tastes The personnel will be trained at a regular basis so as to keep them updated and also to be
able to meet up the customers‟ expectations In this way Raol Guest House will be able to bdquoadd value‟ to
its service through its employees Also the employees will be able to have a good clientele with the cus-
tomers In this way the staff will learn about the guests‟ likes and dislikes thus with this knowledge the
personnel can provide an improved experience to the tourists who would lead to an increased in the profita-
bility margin The resources that Raol Guest House has are its workers from waiter to the General Manag-
er each of them is recruited according to skills qualifications and work experience They are recruited
from Sir Gaeumltan Duval Hotel School Moreover Raol Guest House also encourages continuous training
which will help the employees to create innovate and communicate effectively
14
Process
A process is a flow of activities At Raol Guest House the process is simple since it operated at a small
scale The process is more coordinated according to the needs of the customers
15
Place
Place refers to the physical and virtual environment ambiance staff and activities and at the point of ser-
vice offering The atmosphere and the physical environment are the specific factors that each guest house
getsAccessibility is a critical element of place as it represents the extent to which markets and destinations
are connected (Weaver and Oppermann 2000) The location where Raol Guest House is situated is a highly
tourist attraction The guest house has 35 standard rooms are categorized into 3 groups-(Sea view Moun-
tain View and Road view)
Promotion
Promotion has got a vital role in promoting a destinationit enables to communicate with individual
groups organisations to directly or indirectly facilitate exchange by informing and persuading the different
market segments to welcome the choice of the destination being promoted
A successful promotion strategy is devised by having a push and pull promotion
According to Kotler (2001 pg531)
ldquoA push strategy involves pushing the product through distribution channels to final consumers The prod-
uct directs it marketing activities (personnel selling and trade promotion) toward channel members to in-
clude them to carry the product and to promote it to final consumers Using a pull strategy the producer
directs its marketing activities (primarily advertising and consumer promotions) towards final consumers to
induce them buy the productrdquo
Push strategy is also known as ldquotaking the product to the consumer ldquo The push promotional strategy in-
volves taking the leisure product directly to the customer This can be achieved by making use of any
means and the final aim is to ensure that the customer is aware of the guesthouse‟s name providing the lei-
sure activity at the point of purchase One example of the push promotional strategy is the point of sale
displays in the guesthouse lobby
Pull strategy is also known as ldquoGetting the customer to come to yourdquo The pull strategy is to motivate the
tourists in such a way that they are themselves encouraged to come and seek leisure facilities in the guest-
house One example of the pull strategy is advertising and mass media promotion
According to Kotler (2001) there are five strategy promotional mix they are
Advertising
Advertising is any form of non-personal communication from an identified sponsor about the organization
and its services using the media to influence a target market (Blech amp Blech 1998 Wells Burnett amp Mori-
aty 1998 Zikmund amp D‟amico 1996) This is to inform potential customers about the products that the
organization is offering and to persuade them to buy it Some examples of advertising can be yellow pages
local newspapers radio trade journals exhibitions and websites
16
Sales promotion
It is providing the customers with the basic service adding further appealing packages to it This can help to
achieve customer loyalty and as the same time attract new customers
Public Relations
Public Relations (PR) are defined by the British Institute of Public Relations as the planned and sustained
effort to establish and maintain goodwill between an organisation and its public Public Relations are ex-
tensively used in the tourism industry as a way of communicating with potential customers
Public Relations can also be defined as any group that has actual or potential interest on a company‟s abil-
ity to achieve its objectives (Kotler 2000)
PR is concerned with a number of marketing tasks These include the following
Building or maintaining image
Supporting the other communication activities
Handling problems and issues reinforcing position
Influencing specific publics
Direct Marketing
Direct marketing is to carry out a market research from time to time to know about the exact needs and
wants of the customers and to cater for them This component of the promotional mix does not use the tra-
ditional formal channels of advertising instead it is done through fliers catalogue distribution and promo-
tional letters
Personal Selling
Personal selling is to communicate orally with a potential customer of the leisure activity with the intention
to make a sale This is the most effective form of promotion as the customer is able to get the exact service
and information that she is expecting
17
STRATEGIC PLANNING APPROACHES
The Productmarket opportunity matrix (Ansoff Matrix) has been used to show strategic planning approach
that the company will adopt
Market Penetration
An organisation pursuing a market penetration strategy is aiming to sell more of its existing products in ex-
isting markets To support a market penetration strategy an organisation must make sure that it maintains
and builds the competences that are relevant to the particular market and that it has the relevant capacity to
meet higher levels of demand Raol Guest House can make use of the following strategies make use of ag-
gressive Make use of aggressive advertisement television radio newspapers health conscious magazines
and internet Build customer loyalty by providing discounts on cumulative purchases Offer discount cou-
pon for old customers
Productservice Development
This strategy involves the organisation operating in its existing markets and developing innovative or modi-
fied versions of its existing products to appeal to those markets For an effective product development
strategy an organisation must either be able to build on its existing competences or acquire new ones but it
does allow the organisation to exploit its existing knowledge of its customersRaol Guest House can Devel-
op new types of services like Spa
18
Market Development
This strategy entails expanding into new markets with existing products which are at the most only
slightly modified for the new market These may be new markets geographically new market segments
or new uses for products Whatever the market this approach to growth depends upon the existence of
new consumer groups who are willing and able to buy the existing product The company can look for
international markets like the European Countries enter new market segments market through Social
media (eg Facebook)
Diversification
Diversification involves the organisation moving into new markets with new products Diversification
may become necessary when none of the alternative mechanisms for generating growth are feasible and
is generally thought to be the more risky route to growth But for Raol Guest House for the time being it
can concentrate on the three above strategies since they carry lower risks as the organisation has some
experience in it By contrast the fourth strategy - diversification is much more risky because the organi-
sation is moving into areas in which it has little or no experience As a consequence the instances of
pure diversification are rare When diversification is undertaken the risks can be reduced by concentrat-
ing on either familiar markets or familiar technologies Moving into new markets with products which
require new technologies constitutes the riskiest and also the rarest form of diversification In the long-
runRaol Guest House can opt to diversify
CONTROLS AND EVALAUTION
Implementation
The marketing manager will coordinate the marketing activities that are crucial in achieving the finan-
cial and marketing objectives of the company Raol GuestHouse requires the marketing department to
maintain its professional integrity looking out for its marketing goals and implementing the marketing
programmes as best fits its strategy
Controls
To maximise the return on a marketing plan there need to be controls in place to monitor the plans pro-
gress Control is not a singular thing but a host of tools for making sure that the company is on track
Raol GuestHouse will be using four types of controls to monitor the service marketing plan progress
Annual plan control
The purpose of the annual plan control is to ensure that Raol GuestHouse achieves the sales profits and
other goals established in the marketing plan
Sales analysis - Actual sales will be compared to sales targets and budgets and an analysis of any vari-
ance between the two will be carefully examined
Market share analysis - Raol Guest House will be using overall market share served market share and
19
Customer attitude tracking - Raol Guest House will monitor customer feedback through polls and surveys
The company will carry out customer surveys by phone or in person and host online polls to gauge what
customers feel about the Services The company will also implement a customer complaint and suggestion
scheme to increase customer satisfaction level
Sales-to-expense ratios - Sales-to-expense ratios will be used to determine whether Raol Guest House is
spending too much or too little on marketing the Services in order to achieve its sales goals The following
sales-to-expense ratios will be used
advertising to sales
sales force size to sales
sales promotion to sales
marketing research to sales
Profitability control
Profitability control will help Raol Guest House to evaluate and improve spending and examine whether it
is making profits or losses The following measures will be taken to control its profitability
Sales revenue and costs from the previous year will be compared to that of the current year
Actual and estimated profits will also be compared to determine differences
A cost control system will be developed to maintain costs that remain within the specified budget
Efficiency control
Efficiency control will be used to evaluate and improve the spending efficiency and impact of marketing
expenditures The efficiency of sales force advertising sales promotion and distribution will be moni-
tored
Strategic control
The purpose of strategic control is to examine whether Raol Guest House is pursuing its best opportunities
with respect to markets products and channels The following marketing tools will be used
marketing effectiveness rating instrument
marketing audit
marketing excellence review
company ethical and social responsibility review
20
REFERENCES
BELCH GE AND BELCH MA 2007 Advertising and promotion an integrated marketing communi-
cation perspective In IrwinMcGraw Hill 7th ed Boston Massachusetts 45
FERREL O C and HARTLINEMD 2008 Marketing Strategy Mason Thomson Higher Education
KOEGEL K 2010 ldquoBuilding Brands Onlinerdquo Ad Age Insights October 11
KOTLER P ANG SH LEONG SM and TAN CT 1999 Marketing Management An AsianPer-
spective 2nd Ed Prentice Hall
LANCASTER G AND REYNOLDS P 2005Management of Marketing Burlington Elsevier Butter-
worth ndash Heinemann
WEBSITES httpsquizletcom30731376casino-management-exam-2-flash-cards
httpfacultyjwuedupbagdanHOSP3050worksheetsch14_worksheetdoc
httpfacultyjwuedupbagdanHOSP3050worksheetsCHAPTER2014doc
6
COMPETITIVE ADVANTAGE
Competitive advantage is defined as a strategic advantage one business entity has over its rival entities
within its competitive industry Achieving competitive advantage strengthens and positions a business bet-
ter within the business environment Competitive advantage of guest house focuses on the leisure of peo-
ple It is essential to produce new and innovative ideas to differentiate a service from others of the same
nature
Customer analysis
Customers are the reason for an organisation to be in business Raol Guest house offers a wide range of
services its present customers are mainly local residents and tourists who come for a family vacation of
about 15 days Now Raol Guest House wants to exploit the market further by providing customer satisfac-
tion
Market analysis
The market size of Raol Guest House has significantly increased due to the following factors
1 Customer Satisfaction
It has been observed that customers have been visiting them again and also to see that customers‟ feed-
backs are positive at all times This shows that the customers are satisfied with the way they are being
treated each time
2 Consistent staff training
Raol Guest House strategy is to provide consistent staff training so a training program was developed
which all key staff members staff members would undertake and was designed was an integrated multi-
faceted package that featured a mix of workshops videos training on new standards and included clearly
set-out objectives This unique approach to training facilitated the avoidance of bdquoone-size-fits-all‟ philoso-
phy which often proves ideal when creating a global brand but for the resort it was vital for each to pre-
serve elements of individuality The service delivery was overhauled and consistency was introduced
3 Increase turnover
Raol Guest House has been hiring employees who are competent and this reduces expenses associated
with incompetent employees the hotel also employs employees who are loyal and those who do not en-
gage in unethical behaviours that consume the expected profits The Raol Guest House has been making
profits all the time this indicates that the strategies put in place Human resource strategies have been ef-
fective and have assisted the guest house in increasing its sales and turnover and eventually higher profits
7
4 Innovated Services
Raol Guest House has excellent employees who have a keen eye to innovation they come up with strate-
gies that ensure that hotel stays on top and some of the innovations include furnishing the rooms in a mod-
ern way making sure that the customer‟s needs are achieve Innovative employees of the Raol Guest House
are rewarded or given opportunities to further their innovation through education in institutions that offer
hospitality course innovative means that employee are given opportunities to meet and exchange ideas
with other employees from resorts
5Low prices compared to hotels
It has been observed that Raol Guest House offers many services at a considerable low price
STATEMENT FOR MARKETING OBJECTIVES AND FINANCIAL OB-
JECTIVES
Marketing objectives
There is an idea of making the guesthouse more available to the Mauritians who until now could not really
access the guest house to the high charges The department also decided to make the guest house more re-
nowned in Mauritius They want to manage events on the left wing of the guesthouse where a big hall
kitchens and many big rooms will be constructed
The space the guest house already has but which is unused will thus become a source of income to the or-
ganisation The idea is to make the guest house into an event management company as well The marketing
department has already planned how to prevent noises from disturbing the guest house residents They plan
to make another entry and exit for the left wing and also protect the whole guest house with soundproof
walls
Despite the complexity of the whole plan the marketing department is sure that this will help boost up the
image of Raol Guest House and allow people to plan their marriage birthdays business meetings in a nat-
ural place where ecology and tranquillity is a priority to the direction of the guest house Also is it that
Raol Guest House will also offer various cuisines in its restaurant called ldquoDelices de la Naturerdquo where in-
stead of offering only traditional Mauritian food all kind of food will be available to the residents such as
Indian food Chinese food Italian food and European food To be able to offer only the best delicacies to
our customers four specialised chefs will be recruited
8
assistance An extended ndash stay resident wants an in-room kitchen Conventioneers want large meeting
rooms preplanned sightseeing and hospitality suites
Resolve consumer complaints more effectively because business travellers are quite concerned about one-
booking long waiting lines late check-in times Moreover Raol Guest House is dealing for alternative ac-
commodation in case that they are over-booked computerizing check-ins offering express checkouts
( bills are placed under room doors or mailed to guests‟ room doors or mailed to guest‟ businesses or
homes)serving free drinks and providing baggage handling if check-in times are late
All these objectives allow the clients of Raol Guest House to enjoy a memorable and amazing time
Financial Objectives
The financial objectives of the company are listed below
Achieve sales revenue of Rs 150000 in year 2015 and Rs 1 million in year 2018
Achieve 5 growth in sales in the niche market of guesthouses
Ensure a positive cash flow from operating investing and financing activities
9
SWOT ANALYSIS
SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses and for identi-
fying both the Opportunities open to you and the Threats you face
Situation analysis in which internal strengths and weaknesses of an organization and exter-
nal opportunities and threats faced by it are closely examined to chart a strategy SWOT stands
for strengths weaknesses opportunities and threats Below is the SWOT Analysis of Raol Guest House
MARKET RESEARCH
Market research has been carried out Both primary and secondary data have been collected Primary
data has been collected by the customers while the secondary data has been gathered through internet
researches
10
SEGMENTATION
Hotel consumers are varied in a number of aspects Their respective differences often provide a challenge
for firms trying to meet and exceed consumer productservice expectations Smith (1956) defines market
segmentation as a competition defense mechanism in response to differing consumer demand It allows a
firm to divide a heterogeneous market of products and services into smaller homogenous units (Smith
1956) The segment identifies existing and potential consumers and aligns them with the products and ser-
vices that may satisfy a greater number of their specific needs (Smith 1956 amp Forsyth 2009) An industry
with a segmented market allows for the examination of the intrinsic and extrinsic factors that can influ-
ence the consumer‟s decision making in reference to the given product or service Implementing market
segmentation strategies are expected to allow the firm to better target their consumers The segmentation
that Raol Guest House will be using to launch its new product is divided into two groups namely
Geographic Segmentation
It is the division of the market into different geographic units including nations states regions or neigh-
borhoods (Belch amp Belch 2007) Raol Guest House will aim at different countries such as Comoros
Kenya Madagascar Mayotte Reunion Seychelles South Africa and Zimbabwe
Demographic Segmentation
It refers to the division of the market on the basis of demographic variables such as age gender family
size education income and social class Raol Guest House will also be sold in a low price allowing high
class middle class and low class family to purchase the service
TARGETING
Raol Guest House also aims at target one or more segments business travellers through tourists (who stay
one night) regular tourists (who stay 2 or more nights) extended stay residents (who stay up to several
months or longer and conventioneers
11
POSITIONING
To combat the effects of a competitive market environment and to position itself Treacy and Wiersema
suggests three value disciplines which firms should focus their operation (1995) The disciplines Opera-
tional Excellence ProductService Leadership and Customer Intimacy
Operational Excellence
Operational Excellence pertains to the firm‟s ability to provide ldquomiddle-of-the-market products at the best
price with the least inconveniencerdquo to the consumer (Treacy amp Wiersema 1995 p xii) Raol Guest House
focusing on this discipline will utilize a ldquocost reduction in operationsrdquo while still providing reliable prod-
ucts and services at a competitive price (Riemann amp et al 2009 p 4) The firm‟s managers must pay close
attention to cost controls if they seek to achieve an optimized business process (Riemann amp et al 2009
Porter 1980) Raol Guest House utilizing lower costing operational procedures will yield greater returns
when compared to their competitors (Porter 1980)
ProductService Leadership
ProductService Leadership references how the firm strives to offer the best available product or service
(Treacy amp Wiersema 1995) This value discipline relates to the differentiation strategies that the firm may
implement The offered product or service may exceed competing offerings by ldquodesign technology fea-
tures customer servicerdquo or other complex element (Porter 1980 p 36) Strategies focused around
productservice e leadership allow the firm to narrow their business focus to providing the best available
offerings to improve their leadership position (Treacy amp Wiersema 1995) A lodging firm utilizing en-
hanced products and services is further attempting to improve the consumer‟s quality of stay (Riemann amp
et al 2009) This value discipline is expected to yield ldquoabove-average returnsrdquo as it encourages consumer
ldquobrand loyaltyrdquo 30 and a lower threshold for price sensitivity (Porter 1980 p38) The firm develops a
competitive advantage by being at the forefront of product or service innovation (Treacy amp Wiersema
1995)
Customer Intimacy
Customer Intimacy references the firm‟s ability to provide customizable products and services that cater to
the needs and requests of their individual guests (Riemann amp et al 2009) This value discipline is focused
on ldquoserving a particular target [market] very wellrdquo (Porter 1980 p 38) The firm strategically works to-
wards providing a consumer solution oppose to a service (Treacy amp Wiersema 1995) Establishing and
maintaining intimate consumer relationships is important to this discipline (Treacy amp Wiersema 1995)
The firm recognizes the consumers‟ ldquolifetime valuerdquo and attempts to establish lasting consumer loyalty
(Treacy amp Wiersema 1995 p 41) The market strategies developed around this discipline aim to provide
products and services that meet or exceed the specific needs of the consumer McGuire suggests that firms
should strive towards these strategies as they aid the consumer in understanding and differentiating the
uniqueness between competing firms (2009)
12
MARKETING MIX
ldquoThe marketing mix concept is a well-established tool used as a structure by marketers It consists of the
various elements of a marketing programmed which need to be considered in order to successfully imple-
ment the marketing strategy and positioning in the company‟s market It is the important internal elements
or ingredients that make up an organization‟s marketing programmerdquo- Adrian Payne
Product
ldquoA product is anything that can be offered to a market for attention use or consumption that might satisfy a
want or a need It includes physical objects services places organisations and ideasrdquo KotlerBowen and
Makens
In the tourism industry there is no production of goods but rather this industry provides a myriad of ser-
vices and experiences The service that Raol Guest House procures has special characteristics
Intangibility
Services can be purchased but cannot be seen touched or tasted ndashthey are intangible The heart of a service
is the experience created for the customer In choosing Raol Guest House a customer might look to the ad-
ditional services that Raol Guest House offers to its customers
Inseparability
The service is created and consumed at the same time Therefore the client and employee are both in-
volved during this process During this process it is vital to keep the same standard of service when deliv-
ering to its customers
Heterogeneity
No 2 customers will demand exactly the same service they will have different de-
mandsexpectationstastesmoodsperceptions and emotions ( George200121)
Lack of ownership
In this conceptthe customer has nothing to take away except hisher experienceMost of the services are of
ldquo temporary use‟ and the memories arising from there Like for Raol Guest Housea room will only be
served to enhance or degrade their experience of the service being provided
Perishability
The hospitality offered by the Raol Guest House cannot be storedsaved or reuse-it is perishable
Some new services could be generated A babyndash sitting service a 24 hour room service car rental Fur-
thermore a fitness studio can be set up which will give more profit and a bit of modern touch to the Raol
Guest House Other services like organising transport facilities for their guests suggesting plans of inter-
ests in the area organising tours bookings can be offered Vacation packages also can be offered
13
Price
Price is the value that is placed on something Price is an indispensable element in the marketing mix since
it generated revenue and it is the only basis of recovering the costs and profitsZeithaml ( 1998 ) claimed
that the customers will think whether they received the value of money or before they decide to return the
purchase from the service provider Raol Guest House can adopt a seasonal pricing where the price paid for
a particular service can be during a certain time or period only or even price flexibility also can be em-
braced which is an unstable amount that can be paid for the same services by two different customers or it
can be adjustable price for different customers with the same service depending on the customer relation-
ship ( Keyes 2010104)
Physical Evidence
This factor refers to the ability and environment in which the service will be delivered For example the
interior and exterior decoration its furnishing lights Moreover Raol Guest House will have its own bro-
chures will be available for its customers This service scope includes three physical environment dimen-
sions that represent the relation between services and environment namely
1Environmental conditions such as temperaturesoundsmell
2Space and functions such as mapequipementdecoration
3Signssymbols and artefacts such as decoration style
The more intangible the service the more important it is to make the service around it tangible The physi-
cal evidence serves as a visual metaphor of what the company represents what services it facilitates and
the relations between customers and employees
People
All the staff being employed at Raol Guest House will be the locals since they are more acquainted with
the local tastes The personnel will be trained at a regular basis so as to keep them updated and also to be
able to meet up the customers‟ expectations In this way Raol Guest House will be able to bdquoadd value‟ to
its service through its employees Also the employees will be able to have a good clientele with the cus-
tomers In this way the staff will learn about the guests‟ likes and dislikes thus with this knowledge the
personnel can provide an improved experience to the tourists who would lead to an increased in the profita-
bility margin The resources that Raol Guest House has are its workers from waiter to the General Manag-
er each of them is recruited according to skills qualifications and work experience They are recruited
from Sir Gaeumltan Duval Hotel School Moreover Raol Guest House also encourages continuous training
which will help the employees to create innovate and communicate effectively
14
Process
A process is a flow of activities At Raol Guest House the process is simple since it operated at a small
scale The process is more coordinated according to the needs of the customers
15
Place
Place refers to the physical and virtual environment ambiance staff and activities and at the point of ser-
vice offering The atmosphere and the physical environment are the specific factors that each guest house
getsAccessibility is a critical element of place as it represents the extent to which markets and destinations
are connected (Weaver and Oppermann 2000) The location where Raol Guest House is situated is a highly
tourist attraction The guest house has 35 standard rooms are categorized into 3 groups-(Sea view Moun-
tain View and Road view)
Promotion
Promotion has got a vital role in promoting a destinationit enables to communicate with individual
groups organisations to directly or indirectly facilitate exchange by informing and persuading the different
market segments to welcome the choice of the destination being promoted
A successful promotion strategy is devised by having a push and pull promotion
According to Kotler (2001 pg531)
ldquoA push strategy involves pushing the product through distribution channels to final consumers The prod-
uct directs it marketing activities (personnel selling and trade promotion) toward channel members to in-
clude them to carry the product and to promote it to final consumers Using a pull strategy the producer
directs its marketing activities (primarily advertising and consumer promotions) towards final consumers to
induce them buy the productrdquo
Push strategy is also known as ldquotaking the product to the consumer ldquo The push promotional strategy in-
volves taking the leisure product directly to the customer This can be achieved by making use of any
means and the final aim is to ensure that the customer is aware of the guesthouse‟s name providing the lei-
sure activity at the point of purchase One example of the push promotional strategy is the point of sale
displays in the guesthouse lobby
Pull strategy is also known as ldquoGetting the customer to come to yourdquo The pull strategy is to motivate the
tourists in such a way that they are themselves encouraged to come and seek leisure facilities in the guest-
house One example of the pull strategy is advertising and mass media promotion
According to Kotler (2001) there are five strategy promotional mix they are
Advertising
Advertising is any form of non-personal communication from an identified sponsor about the organization
and its services using the media to influence a target market (Blech amp Blech 1998 Wells Burnett amp Mori-
aty 1998 Zikmund amp D‟amico 1996) This is to inform potential customers about the products that the
organization is offering and to persuade them to buy it Some examples of advertising can be yellow pages
local newspapers radio trade journals exhibitions and websites
16
Sales promotion
It is providing the customers with the basic service adding further appealing packages to it This can help to
achieve customer loyalty and as the same time attract new customers
Public Relations
Public Relations (PR) are defined by the British Institute of Public Relations as the planned and sustained
effort to establish and maintain goodwill between an organisation and its public Public Relations are ex-
tensively used in the tourism industry as a way of communicating with potential customers
Public Relations can also be defined as any group that has actual or potential interest on a company‟s abil-
ity to achieve its objectives (Kotler 2000)
PR is concerned with a number of marketing tasks These include the following
Building or maintaining image
Supporting the other communication activities
Handling problems and issues reinforcing position
Influencing specific publics
Direct Marketing
Direct marketing is to carry out a market research from time to time to know about the exact needs and
wants of the customers and to cater for them This component of the promotional mix does not use the tra-
ditional formal channels of advertising instead it is done through fliers catalogue distribution and promo-
tional letters
Personal Selling
Personal selling is to communicate orally with a potential customer of the leisure activity with the intention
to make a sale This is the most effective form of promotion as the customer is able to get the exact service
and information that she is expecting
17
STRATEGIC PLANNING APPROACHES
The Productmarket opportunity matrix (Ansoff Matrix) has been used to show strategic planning approach
that the company will adopt
Market Penetration
An organisation pursuing a market penetration strategy is aiming to sell more of its existing products in ex-
isting markets To support a market penetration strategy an organisation must make sure that it maintains
and builds the competences that are relevant to the particular market and that it has the relevant capacity to
meet higher levels of demand Raol Guest House can make use of the following strategies make use of ag-
gressive Make use of aggressive advertisement television radio newspapers health conscious magazines
and internet Build customer loyalty by providing discounts on cumulative purchases Offer discount cou-
pon for old customers
Productservice Development
This strategy involves the organisation operating in its existing markets and developing innovative or modi-
fied versions of its existing products to appeal to those markets For an effective product development
strategy an organisation must either be able to build on its existing competences or acquire new ones but it
does allow the organisation to exploit its existing knowledge of its customersRaol Guest House can Devel-
op new types of services like Spa
18
Market Development
This strategy entails expanding into new markets with existing products which are at the most only
slightly modified for the new market These may be new markets geographically new market segments
or new uses for products Whatever the market this approach to growth depends upon the existence of
new consumer groups who are willing and able to buy the existing product The company can look for
international markets like the European Countries enter new market segments market through Social
media (eg Facebook)
Diversification
Diversification involves the organisation moving into new markets with new products Diversification
may become necessary when none of the alternative mechanisms for generating growth are feasible and
is generally thought to be the more risky route to growth But for Raol Guest House for the time being it
can concentrate on the three above strategies since they carry lower risks as the organisation has some
experience in it By contrast the fourth strategy - diversification is much more risky because the organi-
sation is moving into areas in which it has little or no experience As a consequence the instances of
pure diversification are rare When diversification is undertaken the risks can be reduced by concentrat-
ing on either familiar markets or familiar technologies Moving into new markets with products which
require new technologies constitutes the riskiest and also the rarest form of diversification In the long-
runRaol Guest House can opt to diversify
CONTROLS AND EVALAUTION
Implementation
The marketing manager will coordinate the marketing activities that are crucial in achieving the finan-
cial and marketing objectives of the company Raol GuestHouse requires the marketing department to
maintain its professional integrity looking out for its marketing goals and implementing the marketing
programmes as best fits its strategy
Controls
To maximise the return on a marketing plan there need to be controls in place to monitor the plans pro-
gress Control is not a singular thing but a host of tools for making sure that the company is on track
Raol GuestHouse will be using four types of controls to monitor the service marketing plan progress
Annual plan control
The purpose of the annual plan control is to ensure that Raol GuestHouse achieves the sales profits and
other goals established in the marketing plan
Sales analysis - Actual sales will be compared to sales targets and budgets and an analysis of any vari-
ance between the two will be carefully examined
Market share analysis - Raol Guest House will be using overall market share served market share and
19
Customer attitude tracking - Raol Guest House will monitor customer feedback through polls and surveys
The company will carry out customer surveys by phone or in person and host online polls to gauge what
customers feel about the Services The company will also implement a customer complaint and suggestion
scheme to increase customer satisfaction level
Sales-to-expense ratios - Sales-to-expense ratios will be used to determine whether Raol Guest House is
spending too much or too little on marketing the Services in order to achieve its sales goals The following
sales-to-expense ratios will be used
advertising to sales
sales force size to sales
sales promotion to sales
marketing research to sales
Profitability control
Profitability control will help Raol Guest House to evaluate and improve spending and examine whether it
is making profits or losses The following measures will be taken to control its profitability
Sales revenue and costs from the previous year will be compared to that of the current year
Actual and estimated profits will also be compared to determine differences
A cost control system will be developed to maintain costs that remain within the specified budget
Efficiency control
Efficiency control will be used to evaluate and improve the spending efficiency and impact of marketing
expenditures The efficiency of sales force advertising sales promotion and distribution will be moni-
tored
Strategic control
The purpose of strategic control is to examine whether Raol Guest House is pursuing its best opportunities
with respect to markets products and channels The following marketing tools will be used
marketing effectiveness rating instrument
marketing audit
marketing excellence review
company ethical and social responsibility review
20
REFERENCES
BELCH GE AND BELCH MA 2007 Advertising and promotion an integrated marketing communi-
cation perspective In IrwinMcGraw Hill 7th ed Boston Massachusetts 45
FERREL O C and HARTLINEMD 2008 Marketing Strategy Mason Thomson Higher Education
KOEGEL K 2010 ldquoBuilding Brands Onlinerdquo Ad Age Insights October 11
KOTLER P ANG SH LEONG SM and TAN CT 1999 Marketing Management An AsianPer-
spective 2nd Ed Prentice Hall
LANCASTER G AND REYNOLDS P 2005Management of Marketing Burlington Elsevier Butter-
worth ndash Heinemann
WEBSITES httpsquizletcom30731376casino-management-exam-2-flash-cards
httpfacultyjwuedupbagdanHOSP3050worksheetsch14_worksheetdoc
httpfacultyjwuedupbagdanHOSP3050worksheetsCHAPTER2014doc
7
4 Innovated Services
Raol Guest House has excellent employees who have a keen eye to innovation they come up with strate-
gies that ensure that hotel stays on top and some of the innovations include furnishing the rooms in a mod-
ern way making sure that the customer‟s needs are achieve Innovative employees of the Raol Guest House
are rewarded or given opportunities to further their innovation through education in institutions that offer
hospitality course innovative means that employee are given opportunities to meet and exchange ideas
with other employees from resorts
5Low prices compared to hotels
It has been observed that Raol Guest House offers many services at a considerable low price
STATEMENT FOR MARKETING OBJECTIVES AND FINANCIAL OB-
JECTIVES
Marketing objectives
There is an idea of making the guesthouse more available to the Mauritians who until now could not really
access the guest house to the high charges The department also decided to make the guest house more re-
nowned in Mauritius They want to manage events on the left wing of the guesthouse where a big hall
kitchens and many big rooms will be constructed
The space the guest house already has but which is unused will thus become a source of income to the or-
ganisation The idea is to make the guest house into an event management company as well The marketing
department has already planned how to prevent noises from disturbing the guest house residents They plan
to make another entry and exit for the left wing and also protect the whole guest house with soundproof
walls
Despite the complexity of the whole plan the marketing department is sure that this will help boost up the
image of Raol Guest House and allow people to plan their marriage birthdays business meetings in a nat-
ural place where ecology and tranquillity is a priority to the direction of the guest house Also is it that
Raol Guest House will also offer various cuisines in its restaurant called ldquoDelices de la Naturerdquo where in-
stead of offering only traditional Mauritian food all kind of food will be available to the residents such as
Indian food Chinese food Italian food and European food To be able to offer only the best delicacies to
our customers four specialised chefs will be recruited
8
assistance An extended ndash stay resident wants an in-room kitchen Conventioneers want large meeting
rooms preplanned sightseeing and hospitality suites
Resolve consumer complaints more effectively because business travellers are quite concerned about one-
booking long waiting lines late check-in times Moreover Raol Guest House is dealing for alternative ac-
commodation in case that they are over-booked computerizing check-ins offering express checkouts
( bills are placed under room doors or mailed to guests‟ room doors or mailed to guest‟ businesses or
homes)serving free drinks and providing baggage handling if check-in times are late
All these objectives allow the clients of Raol Guest House to enjoy a memorable and amazing time
Financial Objectives
The financial objectives of the company are listed below
Achieve sales revenue of Rs 150000 in year 2015 and Rs 1 million in year 2018
Achieve 5 growth in sales in the niche market of guesthouses
Ensure a positive cash flow from operating investing and financing activities
9
SWOT ANALYSIS
SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses and for identi-
fying both the Opportunities open to you and the Threats you face
Situation analysis in which internal strengths and weaknesses of an organization and exter-
nal opportunities and threats faced by it are closely examined to chart a strategy SWOT stands
for strengths weaknesses opportunities and threats Below is the SWOT Analysis of Raol Guest House
MARKET RESEARCH
Market research has been carried out Both primary and secondary data have been collected Primary
data has been collected by the customers while the secondary data has been gathered through internet
researches
10
SEGMENTATION
Hotel consumers are varied in a number of aspects Their respective differences often provide a challenge
for firms trying to meet and exceed consumer productservice expectations Smith (1956) defines market
segmentation as a competition defense mechanism in response to differing consumer demand It allows a
firm to divide a heterogeneous market of products and services into smaller homogenous units (Smith
1956) The segment identifies existing and potential consumers and aligns them with the products and ser-
vices that may satisfy a greater number of their specific needs (Smith 1956 amp Forsyth 2009) An industry
with a segmented market allows for the examination of the intrinsic and extrinsic factors that can influ-
ence the consumer‟s decision making in reference to the given product or service Implementing market
segmentation strategies are expected to allow the firm to better target their consumers The segmentation
that Raol Guest House will be using to launch its new product is divided into two groups namely
Geographic Segmentation
It is the division of the market into different geographic units including nations states regions or neigh-
borhoods (Belch amp Belch 2007) Raol Guest House will aim at different countries such as Comoros
Kenya Madagascar Mayotte Reunion Seychelles South Africa and Zimbabwe
Demographic Segmentation
It refers to the division of the market on the basis of demographic variables such as age gender family
size education income and social class Raol Guest House will also be sold in a low price allowing high
class middle class and low class family to purchase the service
TARGETING
Raol Guest House also aims at target one or more segments business travellers through tourists (who stay
one night) regular tourists (who stay 2 or more nights) extended stay residents (who stay up to several
months or longer and conventioneers
11
POSITIONING
To combat the effects of a competitive market environment and to position itself Treacy and Wiersema
suggests three value disciplines which firms should focus their operation (1995) The disciplines Opera-
tional Excellence ProductService Leadership and Customer Intimacy
Operational Excellence
Operational Excellence pertains to the firm‟s ability to provide ldquomiddle-of-the-market products at the best
price with the least inconveniencerdquo to the consumer (Treacy amp Wiersema 1995 p xii) Raol Guest House
focusing on this discipline will utilize a ldquocost reduction in operationsrdquo while still providing reliable prod-
ucts and services at a competitive price (Riemann amp et al 2009 p 4) The firm‟s managers must pay close
attention to cost controls if they seek to achieve an optimized business process (Riemann amp et al 2009
Porter 1980) Raol Guest House utilizing lower costing operational procedures will yield greater returns
when compared to their competitors (Porter 1980)
ProductService Leadership
ProductService Leadership references how the firm strives to offer the best available product or service
(Treacy amp Wiersema 1995) This value discipline relates to the differentiation strategies that the firm may
implement The offered product or service may exceed competing offerings by ldquodesign technology fea-
tures customer servicerdquo or other complex element (Porter 1980 p 36) Strategies focused around
productservice e leadership allow the firm to narrow their business focus to providing the best available
offerings to improve their leadership position (Treacy amp Wiersema 1995) A lodging firm utilizing en-
hanced products and services is further attempting to improve the consumer‟s quality of stay (Riemann amp
et al 2009) This value discipline is expected to yield ldquoabove-average returnsrdquo as it encourages consumer
ldquobrand loyaltyrdquo 30 and a lower threshold for price sensitivity (Porter 1980 p38) The firm develops a
competitive advantage by being at the forefront of product or service innovation (Treacy amp Wiersema
1995)
Customer Intimacy
Customer Intimacy references the firm‟s ability to provide customizable products and services that cater to
the needs and requests of their individual guests (Riemann amp et al 2009) This value discipline is focused
on ldquoserving a particular target [market] very wellrdquo (Porter 1980 p 38) The firm strategically works to-
wards providing a consumer solution oppose to a service (Treacy amp Wiersema 1995) Establishing and
maintaining intimate consumer relationships is important to this discipline (Treacy amp Wiersema 1995)
The firm recognizes the consumers‟ ldquolifetime valuerdquo and attempts to establish lasting consumer loyalty
(Treacy amp Wiersema 1995 p 41) The market strategies developed around this discipline aim to provide
products and services that meet or exceed the specific needs of the consumer McGuire suggests that firms
should strive towards these strategies as they aid the consumer in understanding and differentiating the
uniqueness between competing firms (2009)
12
MARKETING MIX
ldquoThe marketing mix concept is a well-established tool used as a structure by marketers It consists of the
various elements of a marketing programmed which need to be considered in order to successfully imple-
ment the marketing strategy and positioning in the company‟s market It is the important internal elements
or ingredients that make up an organization‟s marketing programmerdquo- Adrian Payne
Product
ldquoA product is anything that can be offered to a market for attention use or consumption that might satisfy a
want or a need It includes physical objects services places organisations and ideasrdquo KotlerBowen and
Makens
In the tourism industry there is no production of goods but rather this industry provides a myriad of ser-
vices and experiences The service that Raol Guest House procures has special characteristics
Intangibility
Services can be purchased but cannot be seen touched or tasted ndashthey are intangible The heart of a service
is the experience created for the customer In choosing Raol Guest House a customer might look to the ad-
ditional services that Raol Guest House offers to its customers
Inseparability
The service is created and consumed at the same time Therefore the client and employee are both in-
volved during this process During this process it is vital to keep the same standard of service when deliv-
ering to its customers
Heterogeneity
No 2 customers will demand exactly the same service they will have different de-
mandsexpectationstastesmoodsperceptions and emotions ( George200121)
Lack of ownership
In this conceptthe customer has nothing to take away except hisher experienceMost of the services are of
ldquo temporary use‟ and the memories arising from there Like for Raol Guest Housea room will only be
served to enhance or degrade their experience of the service being provided
Perishability
The hospitality offered by the Raol Guest House cannot be storedsaved or reuse-it is perishable
Some new services could be generated A babyndash sitting service a 24 hour room service car rental Fur-
thermore a fitness studio can be set up which will give more profit and a bit of modern touch to the Raol
Guest House Other services like organising transport facilities for their guests suggesting plans of inter-
ests in the area organising tours bookings can be offered Vacation packages also can be offered
13
Price
Price is the value that is placed on something Price is an indispensable element in the marketing mix since
it generated revenue and it is the only basis of recovering the costs and profitsZeithaml ( 1998 ) claimed
that the customers will think whether they received the value of money or before they decide to return the
purchase from the service provider Raol Guest House can adopt a seasonal pricing where the price paid for
a particular service can be during a certain time or period only or even price flexibility also can be em-
braced which is an unstable amount that can be paid for the same services by two different customers or it
can be adjustable price for different customers with the same service depending on the customer relation-
ship ( Keyes 2010104)
Physical Evidence
This factor refers to the ability and environment in which the service will be delivered For example the
interior and exterior decoration its furnishing lights Moreover Raol Guest House will have its own bro-
chures will be available for its customers This service scope includes three physical environment dimen-
sions that represent the relation between services and environment namely
1Environmental conditions such as temperaturesoundsmell
2Space and functions such as mapequipementdecoration
3Signssymbols and artefacts such as decoration style
The more intangible the service the more important it is to make the service around it tangible The physi-
cal evidence serves as a visual metaphor of what the company represents what services it facilitates and
the relations between customers and employees
People
All the staff being employed at Raol Guest House will be the locals since they are more acquainted with
the local tastes The personnel will be trained at a regular basis so as to keep them updated and also to be
able to meet up the customers‟ expectations In this way Raol Guest House will be able to bdquoadd value‟ to
its service through its employees Also the employees will be able to have a good clientele with the cus-
tomers In this way the staff will learn about the guests‟ likes and dislikes thus with this knowledge the
personnel can provide an improved experience to the tourists who would lead to an increased in the profita-
bility margin The resources that Raol Guest House has are its workers from waiter to the General Manag-
er each of them is recruited according to skills qualifications and work experience They are recruited
from Sir Gaeumltan Duval Hotel School Moreover Raol Guest House also encourages continuous training
which will help the employees to create innovate and communicate effectively
14
Process
A process is a flow of activities At Raol Guest House the process is simple since it operated at a small
scale The process is more coordinated according to the needs of the customers
15
Place
Place refers to the physical and virtual environment ambiance staff and activities and at the point of ser-
vice offering The atmosphere and the physical environment are the specific factors that each guest house
getsAccessibility is a critical element of place as it represents the extent to which markets and destinations
are connected (Weaver and Oppermann 2000) The location where Raol Guest House is situated is a highly
tourist attraction The guest house has 35 standard rooms are categorized into 3 groups-(Sea view Moun-
tain View and Road view)
Promotion
Promotion has got a vital role in promoting a destinationit enables to communicate with individual
groups organisations to directly or indirectly facilitate exchange by informing and persuading the different
market segments to welcome the choice of the destination being promoted
A successful promotion strategy is devised by having a push and pull promotion
According to Kotler (2001 pg531)
ldquoA push strategy involves pushing the product through distribution channels to final consumers The prod-
uct directs it marketing activities (personnel selling and trade promotion) toward channel members to in-
clude them to carry the product and to promote it to final consumers Using a pull strategy the producer
directs its marketing activities (primarily advertising and consumer promotions) towards final consumers to
induce them buy the productrdquo
Push strategy is also known as ldquotaking the product to the consumer ldquo The push promotional strategy in-
volves taking the leisure product directly to the customer This can be achieved by making use of any
means and the final aim is to ensure that the customer is aware of the guesthouse‟s name providing the lei-
sure activity at the point of purchase One example of the push promotional strategy is the point of sale
displays in the guesthouse lobby
Pull strategy is also known as ldquoGetting the customer to come to yourdquo The pull strategy is to motivate the
tourists in such a way that they are themselves encouraged to come and seek leisure facilities in the guest-
house One example of the pull strategy is advertising and mass media promotion
According to Kotler (2001) there are five strategy promotional mix they are
Advertising
Advertising is any form of non-personal communication from an identified sponsor about the organization
and its services using the media to influence a target market (Blech amp Blech 1998 Wells Burnett amp Mori-
aty 1998 Zikmund amp D‟amico 1996) This is to inform potential customers about the products that the
organization is offering and to persuade them to buy it Some examples of advertising can be yellow pages
local newspapers radio trade journals exhibitions and websites
16
Sales promotion
It is providing the customers with the basic service adding further appealing packages to it This can help to
achieve customer loyalty and as the same time attract new customers
Public Relations
Public Relations (PR) are defined by the British Institute of Public Relations as the planned and sustained
effort to establish and maintain goodwill between an organisation and its public Public Relations are ex-
tensively used in the tourism industry as a way of communicating with potential customers
Public Relations can also be defined as any group that has actual or potential interest on a company‟s abil-
ity to achieve its objectives (Kotler 2000)
PR is concerned with a number of marketing tasks These include the following
Building or maintaining image
Supporting the other communication activities
Handling problems and issues reinforcing position
Influencing specific publics
Direct Marketing
Direct marketing is to carry out a market research from time to time to know about the exact needs and
wants of the customers and to cater for them This component of the promotional mix does not use the tra-
ditional formal channels of advertising instead it is done through fliers catalogue distribution and promo-
tional letters
Personal Selling
Personal selling is to communicate orally with a potential customer of the leisure activity with the intention
to make a sale This is the most effective form of promotion as the customer is able to get the exact service
and information that she is expecting
17
STRATEGIC PLANNING APPROACHES
The Productmarket opportunity matrix (Ansoff Matrix) has been used to show strategic planning approach
that the company will adopt
Market Penetration
An organisation pursuing a market penetration strategy is aiming to sell more of its existing products in ex-
isting markets To support a market penetration strategy an organisation must make sure that it maintains
and builds the competences that are relevant to the particular market and that it has the relevant capacity to
meet higher levels of demand Raol Guest House can make use of the following strategies make use of ag-
gressive Make use of aggressive advertisement television radio newspapers health conscious magazines
and internet Build customer loyalty by providing discounts on cumulative purchases Offer discount cou-
pon for old customers
Productservice Development
This strategy involves the organisation operating in its existing markets and developing innovative or modi-
fied versions of its existing products to appeal to those markets For an effective product development
strategy an organisation must either be able to build on its existing competences or acquire new ones but it
does allow the organisation to exploit its existing knowledge of its customersRaol Guest House can Devel-
op new types of services like Spa
18
Market Development
This strategy entails expanding into new markets with existing products which are at the most only
slightly modified for the new market These may be new markets geographically new market segments
or new uses for products Whatever the market this approach to growth depends upon the existence of
new consumer groups who are willing and able to buy the existing product The company can look for
international markets like the European Countries enter new market segments market through Social
media (eg Facebook)
Diversification
Diversification involves the organisation moving into new markets with new products Diversification
may become necessary when none of the alternative mechanisms for generating growth are feasible and
is generally thought to be the more risky route to growth But for Raol Guest House for the time being it
can concentrate on the three above strategies since they carry lower risks as the organisation has some
experience in it By contrast the fourth strategy - diversification is much more risky because the organi-
sation is moving into areas in which it has little or no experience As a consequence the instances of
pure diversification are rare When diversification is undertaken the risks can be reduced by concentrat-
ing on either familiar markets or familiar technologies Moving into new markets with products which
require new technologies constitutes the riskiest and also the rarest form of diversification In the long-
runRaol Guest House can opt to diversify
CONTROLS AND EVALAUTION
Implementation
The marketing manager will coordinate the marketing activities that are crucial in achieving the finan-
cial and marketing objectives of the company Raol GuestHouse requires the marketing department to
maintain its professional integrity looking out for its marketing goals and implementing the marketing
programmes as best fits its strategy
Controls
To maximise the return on a marketing plan there need to be controls in place to monitor the plans pro-
gress Control is not a singular thing but a host of tools for making sure that the company is on track
Raol GuestHouse will be using four types of controls to monitor the service marketing plan progress
Annual plan control
The purpose of the annual plan control is to ensure that Raol GuestHouse achieves the sales profits and
other goals established in the marketing plan
Sales analysis - Actual sales will be compared to sales targets and budgets and an analysis of any vari-
ance between the two will be carefully examined
Market share analysis - Raol Guest House will be using overall market share served market share and
19
Customer attitude tracking - Raol Guest House will monitor customer feedback through polls and surveys
The company will carry out customer surveys by phone or in person and host online polls to gauge what
customers feel about the Services The company will also implement a customer complaint and suggestion
scheme to increase customer satisfaction level
Sales-to-expense ratios - Sales-to-expense ratios will be used to determine whether Raol Guest House is
spending too much or too little on marketing the Services in order to achieve its sales goals The following
sales-to-expense ratios will be used
advertising to sales
sales force size to sales
sales promotion to sales
marketing research to sales
Profitability control
Profitability control will help Raol Guest House to evaluate and improve spending and examine whether it
is making profits or losses The following measures will be taken to control its profitability
Sales revenue and costs from the previous year will be compared to that of the current year
Actual and estimated profits will also be compared to determine differences
A cost control system will be developed to maintain costs that remain within the specified budget
Efficiency control
Efficiency control will be used to evaluate and improve the spending efficiency and impact of marketing
expenditures The efficiency of sales force advertising sales promotion and distribution will be moni-
tored
Strategic control
The purpose of strategic control is to examine whether Raol Guest House is pursuing its best opportunities
with respect to markets products and channels The following marketing tools will be used
marketing effectiveness rating instrument
marketing audit
marketing excellence review
company ethical and social responsibility review
20
REFERENCES
BELCH GE AND BELCH MA 2007 Advertising and promotion an integrated marketing communi-
cation perspective In IrwinMcGraw Hill 7th ed Boston Massachusetts 45
FERREL O C and HARTLINEMD 2008 Marketing Strategy Mason Thomson Higher Education
KOEGEL K 2010 ldquoBuilding Brands Onlinerdquo Ad Age Insights October 11
KOTLER P ANG SH LEONG SM and TAN CT 1999 Marketing Management An AsianPer-
spective 2nd Ed Prentice Hall
LANCASTER G AND REYNOLDS P 2005Management of Marketing Burlington Elsevier Butter-
worth ndash Heinemann
WEBSITES httpsquizletcom30731376casino-management-exam-2-flash-cards
httpfacultyjwuedupbagdanHOSP3050worksheetsch14_worksheetdoc
httpfacultyjwuedupbagdanHOSP3050worksheetsCHAPTER2014doc
8
assistance An extended ndash stay resident wants an in-room kitchen Conventioneers want large meeting
rooms preplanned sightseeing and hospitality suites
Resolve consumer complaints more effectively because business travellers are quite concerned about one-
booking long waiting lines late check-in times Moreover Raol Guest House is dealing for alternative ac-
commodation in case that they are over-booked computerizing check-ins offering express checkouts
( bills are placed under room doors or mailed to guests‟ room doors or mailed to guest‟ businesses or
homes)serving free drinks and providing baggage handling if check-in times are late
All these objectives allow the clients of Raol Guest House to enjoy a memorable and amazing time
Financial Objectives
The financial objectives of the company are listed below
Achieve sales revenue of Rs 150000 in year 2015 and Rs 1 million in year 2018
Achieve 5 growth in sales in the niche market of guesthouses
Ensure a positive cash flow from operating investing and financing activities
9
SWOT ANALYSIS
SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses and for identi-
fying both the Opportunities open to you and the Threats you face
Situation analysis in which internal strengths and weaknesses of an organization and exter-
nal opportunities and threats faced by it are closely examined to chart a strategy SWOT stands
for strengths weaknesses opportunities and threats Below is the SWOT Analysis of Raol Guest House
MARKET RESEARCH
Market research has been carried out Both primary and secondary data have been collected Primary
data has been collected by the customers while the secondary data has been gathered through internet
researches
10
SEGMENTATION
Hotel consumers are varied in a number of aspects Their respective differences often provide a challenge
for firms trying to meet and exceed consumer productservice expectations Smith (1956) defines market
segmentation as a competition defense mechanism in response to differing consumer demand It allows a
firm to divide a heterogeneous market of products and services into smaller homogenous units (Smith
1956) The segment identifies existing and potential consumers and aligns them with the products and ser-
vices that may satisfy a greater number of their specific needs (Smith 1956 amp Forsyth 2009) An industry
with a segmented market allows for the examination of the intrinsic and extrinsic factors that can influ-
ence the consumer‟s decision making in reference to the given product or service Implementing market
segmentation strategies are expected to allow the firm to better target their consumers The segmentation
that Raol Guest House will be using to launch its new product is divided into two groups namely
Geographic Segmentation
It is the division of the market into different geographic units including nations states regions or neigh-
borhoods (Belch amp Belch 2007) Raol Guest House will aim at different countries such as Comoros
Kenya Madagascar Mayotte Reunion Seychelles South Africa and Zimbabwe
Demographic Segmentation
It refers to the division of the market on the basis of demographic variables such as age gender family
size education income and social class Raol Guest House will also be sold in a low price allowing high
class middle class and low class family to purchase the service
TARGETING
Raol Guest House also aims at target one or more segments business travellers through tourists (who stay
one night) regular tourists (who stay 2 or more nights) extended stay residents (who stay up to several
months or longer and conventioneers
11
POSITIONING
To combat the effects of a competitive market environment and to position itself Treacy and Wiersema
suggests three value disciplines which firms should focus their operation (1995) The disciplines Opera-
tional Excellence ProductService Leadership and Customer Intimacy
Operational Excellence
Operational Excellence pertains to the firm‟s ability to provide ldquomiddle-of-the-market products at the best
price with the least inconveniencerdquo to the consumer (Treacy amp Wiersema 1995 p xii) Raol Guest House
focusing on this discipline will utilize a ldquocost reduction in operationsrdquo while still providing reliable prod-
ucts and services at a competitive price (Riemann amp et al 2009 p 4) The firm‟s managers must pay close
attention to cost controls if they seek to achieve an optimized business process (Riemann amp et al 2009
Porter 1980) Raol Guest House utilizing lower costing operational procedures will yield greater returns
when compared to their competitors (Porter 1980)
ProductService Leadership
ProductService Leadership references how the firm strives to offer the best available product or service
(Treacy amp Wiersema 1995) This value discipline relates to the differentiation strategies that the firm may
implement The offered product or service may exceed competing offerings by ldquodesign technology fea-
tures customer servicerdquo or other complex element (Porter 1980 p 36) Strategies focused around
productservice e leadership allow the firm to narrow their business focus to providing the best available
offerings to improve their leadership position (Treacy amp Wiersema 1995) A lodging firm utilizing en-
hanced products and services is further attempting to improve the consumer‟s quality of stay (Riemann amp
et al 2009) This value discipline is expected to yield ldquoabove-average returnsrdquo as it encourages consumer
ldquobrand loyaltyrdquo 30 and a lower threshold for price sensitivity (Porter 1980 p38) The firm develops a
competitive advantage by being at the forefront of product or service innovation (Treacy amp Wiersema
1995)
Customer Intimacy
Customer Intimacy references the firm‟s ability to provide customizable products and services that cater to
the needs and requests of their individual guests (Riemann amp et al 2009) This value discipline is focused
on ldquoserving a particular target [market] very wellrdquo (Porter 1980 p 38) The firm strategically works to-
wards providing a consumer solution oppose to a service (Treacy amp Wiersema 1995) Establishing and
maintaining intimate consumer relationships is important to this discipline (Treacy amp Wiersema 1995)
The firm recognizes the consumers‟ ldquolifetime valuerdquo and attempts to establish lasting consumer loyalty
(Treacy amp Wiersema 1995 p 41) The market strategies developed around this discipline aim to provide
products and services that meet or exceed the specific needs of the consumer McGuire suggests that firms
should strive towards these strategies as they aid the consumer in understanding and differentiating the
uniqueness between competing firms (2009)
12
MARKETING MIX
ldquoThe marketing mix concept is a well-established tool used as a structure by marketers It consists of the
various elements of a marketing programmed which need to be considered in order to successfully imple-
ment the marketing strategy and positioning in the company‟s market It is the important internal elements
or ingredients that make up an organization‟s marketing programmerdquo- Adrian Payne
Product
ldquoA product is anything that can be offered to a market for attention use or consumption that might satisfy a
want or a need It includes physical objects services places organisations and ideasrdquo KotlerBowen and
Makens
In the tourism industry there is no production of goods but rather this industry provides a myriad of ser-
vices and experiences The service that Raol Guest House procures has special characteristics
Intangibility
Services can be purchased but cannot be seen touched or tasted ndashthey are intangible The heart of a service
is the experience created for the customer In choosing Raol Guest House a customer might look to the ad-
ditional services that Raol Guest House offers to its customers
Inseparability
The service is created and consumed at the same time Therefore the client and employee are both in-
volved during this process During this process it is vital to keep the same standard of service when deliv-
ering to its customers
Heterogeneity
No 2 customers will demand exactly the same service they will have different de-
mandsexpectationstastesmoodsperceptions and emotions ( George200121)
Lack of ownership
In this conceptthe customer has nothing to take away except hisher experienceMost of the services are of
ldquo temporary use‟ and the memories arising from there Like for Raol Guest Housea room will only be
served to enhance or degrade their experience of the service being provided
Perishability
The hospitality offered by the Raol Guest House cannot be storedsaved or reuse-it is perishable
Some new services could be generated A babyndash sitting service a 24 hour room service car rental Fur-
thermore a fitness studio can be set up which will give more profit and a bit of modern touch to the Raol
Guest House Other services like organising transport facilities for their guests suggesting plans of inter-
ests in the area organising tours bookings can be offered Vacation packages also can be offered
13
Price
Price is the value that is placed on something Price is an indispensable element in the marketing mix since
it generated revenue and it is the only basis of recovering the costs and profitsZeithaml ( 1998 ) claimed
that the customers will think whether they received the value of money or before they decide to return the
purchase from the service provider Raol Guest House can adopt a seasonal pricing where the price paid for
a particular service can be during a certain time or period only or even price flexibility also can be em-
braced which is an unstable amount that can be paid for the same services by two different customers or it
can be adjustable price for different customers with the same service depending on the customer relation-
ship ( Keyes 2010104)
Physical Evidence
This factor refers to the ability and environment in which the service will be delivered For example the
interior and exterior decoration its furnishing lights Moreover Raol Guest House will have its own bro-
chures will be available for its customers This service scope includes three physical environment dimen-
sions that represent the relation between services and environment namely
1Environmental conditions such as temperaturesoundsmell
2Space and functions such as mapequipementdecoration
3Signssymbols and artefacts such as decoration style
The more intangible the service the more important it is to make the service around it tangible The physi-
cal evidence serves as a visual metaphor of what the company represents what services it facilitates and
the relations between customers and employees
People
All the staff being employed at Raol Guest House will be the locals since they are more acquainted with
the local tastes The personnel will be trained at a regular basis so as to keep them updated and also to be
able to meet up the customers‟ expectations In this way Raol Guest House will be able to bdquoadd value‟ to
its service through its employees Also the employees will be able to have a good clientele with the cus-
tomers In this way the staff will learn about the guests‟ likes and dislikes thus with this knowledge the
personnel can provide an improved experience to the tourists who would lead to an increased in the profita-
bility margin The resources that Raol Guest House has are its workers from waiter to the General Manag-
er each of them is recruited according to skills qualifications and work experience They are recruited
from Sir Gaeumltan Duval Hotel School Moreover Raol Guest House also encourages continuous training
which will help the employees to create innovate and communicate effectively
14
Process
A process is a flow of activities At Raol Guest House the process is simple since it operated at a small
scale The process is more coordinated according to the needs of the customers
15
Place
Place refers to the physical and virtual environment ambiance staff and activities and at the point of ser-
vice offering The atmosphere and the physical environment are the specific factors that each guest house
getsAccessibility is a critical element of place as it represents the extent to which markets and destinations
are connected (Weaver and Oppermann 2000) The location where Raol Guest House is situated is a highly
tourist attraction The guest house has 35 standard rooms are categorized into 3 groups-(Sea view Moun-
tain View and Road view)
Promotion
Promotion has got a vital role in promoting a destinationit enables to communicate with individual
groups organisations to directly or indirectly facilitate exchange by informing and persuading the different
market segments to welcome the choice of the destination being promoted
A successful promotion strategy is devised by having a push and pull promotion
According to Kotler (2001 pg531)
ldquoA push strategy involves pushing the product through distribution channels to final consumers The prod-
uct directs it marketing activities (personnel selling and trade promotion) toward channel members to in-
clude them to carry the product and to promote it to final consumers Using a pull strategy the producer
directs its marketing activities (primarily advertising and consumer promotions) towards final consumers to
induce them buy the productrdquo
Push strategy is also known as ldquotaking the product to the consumer ldquo The push promotional strategy in-
volves taking the leisure product directly to the customer This can be achieved by making use of any
means and the final aim is to ensure that the customer is aware of the guesthouse‟s name providing the lei-
sure activity at the point of purchase One example of the push promotional strategy is the point of sale
displays in the guesthouse lobby
Pull strategy is also known as ldquoGetting the customer to come to yourdquo The pull strategy is to motivate the
tourists in such a way that they are themselves encouraged to come and seek leisure facilities in the guest-
house One example of the pull strategy is advertising and mass media promotion
According to Kotler (2001) there are five strategy promotional mix they are
Advertising
Advertising is any form of non-personal communication from an identified sponsor about the organization
and its services using the media to influence a target market (Blech amp Blech 1998 Wells Burnett amp Mori-
aty 1998 Zikmund amp D‟amico 1996) This is to inform potential customers about the products that the
organization is offering and to persuade them to buy it Some examples of advertising can be yellow pages
local newspapers radio trade journals exhibitions and websites
16
Sales promotion
It is providing the customers with the basic service adding further appealing packages to it This can help to
achieve customer loyalty and as the same time attract new customers
Public Relations
Public Relations (PR) are defined by the British Institute of Public Relations as the planned and sustained
effort to establish and maintain goodwill between an organisation and its public Public Relations are ex-
tensively used in the tourism industry as a way of communicating with potential customers
Public Relations can also be defined as any group that has actual or potential interest on a company‟s abil-
ity to achieve its objectives (Kotler 2000)
PR is concerned with a number of marketing tasks These include the following
Building or maintaining image
Supporting the other communication activities
Handling problems and issues reinforcing position
Influencing specific publics
Direct Marketing
Direct marketing is to carry out a market research from time to time to know about the exact needs and
wants of the customers and to cater for them This component of the promotional mix does not use the tra-
ditional formal channels of advertising instead it is done through fliers catalogue distribution and promo-
tional letters
Personal Selling
Personal selling is to communicate orally with a potential customer of the leisure activity with the intention
to make a sale This is the most effective form of promotion as the customer is able to get the exact service
and information that she is expecting
17
STRATEGIC PLANNING APPROACHES
The Productmarket opportunity matrix (Ansoff Matrix) has been used to show strategic planning approach
that the company will adopt
Market Penetration
An organisation pursuing a market penetration strategy is aiming to sell more of its existing products in ex-
isting markets To support a market penetration strategy an organisation must make sure that it maintains
and builds the competences that are relevant to the particular market and that it has the relevant capacity to
meet higher levels of demand Raol Guest House can make use of the following strategies make use of ag-
gressive Make use of aggressive advertisement television radio newspapers health conscious magazines
and internet Build customer loyalty by providing discounts on cumulative purchases Offer discount cou-
pon for old customers
Productservice Development
This strategy involves the organisation operating in its existing markets and developing innovative or modi-
fied versions of its existing products to appeal to those markets For an effective product development
strategy an organisation must either be able to build on its existing competences or acquire new ones but it
does allow the organisation to exploit its existing knowledge of its customersRaol Guest House can Devel-
op new types of services like Spa
18
Market Development
This strategy entails expanding into new markets with existing products which are at the most only
slightly modified for the new market These may be new markets geographically new market segments
or new uses for products Whatever the market this approach to growth depends upon the existence of
new consumer groups who are willing and able to buy the existing product The company can look for
international markets like the European Countries enter new market segments market through Social
media (eg Facebook)
Diversification
Diversification involves the organisation moving into new markets with new products Diversification
may become necessary when none of the alternative mechanisms for generating growth are feasible and
is generally thought to be the more risky route to growth But for Raol Guest House for the time being it
can concentrate on the three above strategies since they carry lower risks as the organisation has some
experience in it By contrast the fourth strategy - diversification is much more risky because the organi-
sation is moving into areas in which it has little or no experience As a consequence the instances of
pure diversification are rare When diversification is undertaken the risks can be reduced by concentrat-
ing on either familiar markets or familiar technologies Moving into new markets with products which
require new technologies constitutes the riskiest and also the rarest form of diversification In the long-
runRaol Guest House can opt to diversify
CONTROLS AND EVALAUTION
Implementation
The marketing manager will coordinate the marketing activities that are crucial in achieving the finan-
cial and marketing objectives of the company Raol GuestHouse requires the marketing department to
maintain its professional integrity looking out for its marketing goals and implementing the marketing
programmes as best fits its strategy
Controls
To maximise the return on a marketing plan there need to be controls in place to monitor the plans pro-
gress Control is not a singular thing but a host of tools for making sure that the company is on track
Raol GuestHouse will be using four types of controls to monitor the service marketing plan progress
Annual plan control
The purpose of the annual plan control is to ensure that Raol GuestHouse achieves the sales profits and
other goals established in the marketing plan
Sales analysis - Actual sales will be compared to sales targets and budgets and an analysis of any vari-
ance between the two will be carefully examined
Market share analysis - Raol Guest House will be using overall market share served market share and
19
Customer attitude tracking - Raol Guest House will monitor customer feedback through polls and surveys
The company will carry out customer surveys by phone or in person and host online polls to gauge what
customers feel about the Services The company will also implement a customer complaint and suggestion
scheme to increase customer satisfaction level
Sales-to-expense ratios - Sales-to-expense ratios will be used to determine whether Raol Guest House is
spending too much or too little on marketing the Services in order to achieve its sales goals The following
sales-to-expense ratios will be used
advertising to sales
sales force size to sales
sales promotion to sales
marketing research to sales
Profitability control
Profitability control will help Raol Guest House to evaluate and improve spending and examine whether it
is making profits or losses The following measures will be taken to control its profitability
Sales revenue and costs from the previous year will be compared to that of the current year
Actual and estimated profits will also be compared to determine differences
A cost control system will be developed to maintain costs that remain within the specified budget
Efficiency control
Efficiency control will be used to evaluate and improve the spending efficiency and impact of marketing
expenditures The efficiency of sales force advertising sales promotion and distribution will be moni-
tored
Strategic control
The purpose of strategic control is to examine whether Raol Guest House is pursuing its best opportunities
with respect to markets products and channels The following marketing tools will be used
marketing effectiveness rating instrument
marketing audit
marketing excellence review
company ethical and social responsibility review
20
REFERENCES
BELCH GE AND BELCH MA 2007 Advertising and promotion an integrated marketing communi-
cation perspective In IrwinMcGraw Hill 7th ed Boston Massachusetts 45
FERREL O C and HARTLINEMD 2008 Marketing Strategy Mason Thomson Higher Education
KOEGEL K 2010 ldquoBuilding Brands Onlinerdquo Ad Age Insights October 11
KOTLER P ANG SH LEONG SM and TAN CT 1999 Marketing Management An AsianPer-
spective 2nd Ed Prentice Hall
LANCASTER G AND REYNOLDS P 2005Management of Marketing Burlington Elsevier Butter-
worth ndash Heinemann
WEBSITES httpsquizletcom30731376casino-management-exam-2-flash-cards
httpfacultyjwuedupbagdanHOSP3050worksheetsch14_worksheetdoc
httpfacultyjwuedupbagdanHOSP3050worksheetsCHAPTER2014doc
9
SWOT ANALYSIS
SWOT Analysis is a useful technique for understanding your Strengths and Weaknesses and for identi-
fying both the Opportunities open to you and the Threats you face
Situation analysis in which internal strengths and weaknesses of an organization and exter-
nal opportunities and threats faced by it are closely examined to chart a strategy SWOT stands
for strengths weaknesses opportunities and threats Below is the SWOT Analysis of Raol Guest House
MARKET RESEARCH
Market research has been carried out Both primary and secondary data have been collected Primary
data has been collected by the customers while the secondary data has been gathered through internet
researches
10
SEGMENTATION
Hotel consumers are varied in a number of aspects Their respective differences often provide a challenge
for firms trying to meet and exceed consumer productservice expectations Smith (1956) defines market
segmentation as a competition defense mechanism in response to differing consumer demand It allows a
firm to divide a heterogeneous market of products and services into smaller homogenous units (Smith
1956) The segment identifies existing and potential consumers and aligns them with the products and ser-
vices that may satisfy a greater number of their specific needs (Smith 1956 amp Forsyth 2009) An industry
with a segmented market allows for the examination of the intrinsic and extrinsic factors that can influ-
ence the consumer‟s decision making in reference to the given product or service Implementing market
segmentation strategies are expected to allow the firm to better target their consumers The segmentation
that Raol Guest House will be using to launch its new product is divided into two groups namely
Geographic Segmentation
It is the division of the market into different geographic units including nations states regions or neigh-
borhoods (Belch amp Belch 2007) Raol Guest House will aim at different countries such as Comoros
Kenya Madagascar Mayotte Reunion Seychelles South Africa and Zimbabwe
Demographic Segmentation
It refers to the division of the market on the basis of demographic variables such as age gender family
size education income and social class Raol Guest House will also be sold in a low price allowing high
class middle class and low class family to purchase the service
TARGETING
Raol Guest House also aims at target one or more segments business travellers through tourists (who stay
one night) regular tourists (who stay 2 or more nights) extended stay residents (who stay up to several
months or longer and conventioneers
11
POSITIONING
To combat the effects of a competitive market environment and to position itself Treacy and Wiersema
suggests three value disciplines which firms should focus their operation (1995) The disciplines Opera-
tional Excellence ProductService Leadership and Customer Intimacy
Operational Excellence
Operational Excellence pertains to the firm‟s ability to provide ldquomiddle-of-the-market products at the best
price with the least inconveniencerdquo to the consumer (Treacy amp Wiersema 1995 p xii) Raol Guest House
focusing on this discipline will utilize a ldquocost reduction in operationsrdquo while still providing reliable prod-
ucts and services at a competitive price (Riemann amp et al 2009 p 4) The firm‟s managers must pay close
attention to cost controls if they seek to achieve an optimized business process (Riemann amp et al 2009
Porter 1980) Raol Guest House utilizing lower costing operational procedures will yield greater returns
when compared to their competitors (Porter 1980)
ProductService Leadership
ProductService Leadership references how the firm strives to offer the best available product or service
(Treacy amp Wiersema 1995) This value discipline relates to the differentiation strategies that the firm may
implement The offered product or service may exceed competing offerings by ldquodesign technology fea-
tures customer servicerdquo or other complex element (Porter 1980 p 36) Strategies focused around
productservice e leadership allow the firm to narrow their business focus to providing the best available
offerings to improve their leadership position (Treacy amp Wiersema 1995) A lodging firm utilizing en-
hanced products and services is further attempting to improve the consumer‟s quality of stay (Riemann amp
et al 2009) This value discipline is expected to yield ldquoabove-average returnsrdquo as it encourages consumer
ldquobrand loyaltyrdquo 30 and a lower threshold for price sensitivity (Porter 1980 p38) The firm develops a
competitive advantage by being at the forefront of product or service innovation (Treacy amp Wiersema
1995)
Customer Intimacy
Customer Intimacy references the firm‟s ability to provide customizable products and services that cater to
the needs and requests of their individual guests (Riemann amp et al 2009) This value discipline is focused
on ldquoserving a particular target [market] very wellrdquo (Porter 1980 p 38) The firm strategically works to-
wards providing a consumer solution oppose to a service (Treacy amp Wiersema 1995) Establishing and
maintaining intimate consumer relationships is important to this discipline (Treacy amp Wiersema 1995)
The firm recognizes the consumers‟ ldquolifetime valuerdquo and attempts to establish lasting consumer loyalty
(Treacy amp Wiersema 1995 p 41) The market strategies developed around this discipline aim to provide
products and services that meet or exceed the specific needs of the consumer McGuire suggests that firms
should strive towards these strategies as they aid the consumer in understanding and differentiating the
uniqueness between competing firms (2009)
12
MARKETING MIX
ldquoThe marketing mix concept is a well-established tool used as a structure by marketers It consists of the
various elements of a marketing programmed which need to be considered in order to successfully imple-
ment the marketing strategy and positioning in the company‟s market It is the important internal elements
or ingredients that make up an organization‟s marketing programmerdquo- Adrian Payne
Product
ldquoA product is anything that can be offered to a market for attention use or consumption that might satisfy a
want or a need It includes physical objects services places organisations and ideasrdquo KotlerBowen and
Makens
In the tourism industry there is no production of goods but rather this industry provides a myriad of ser-
vices and experiences The service that Raol Guest House procures has special characteristics
Intangibility
Services can be purchased but cannot be seen touched or tasted ndashthey are intangible The heart of a service
is the experience created for the customer In choosing Raol Guest House a customer might look to the ad-
ditional services that Raol Guest House offers to its customers
Inseparability
The service is created and consumed at the same time Therefore the client and employee are both in-
volved during this process During this process it is vital to keep the same standard of service when deliv-
ering to its customers
Heterogeneity
No 2 customers will demand exactly the same service they will have different de-
mandsexpectationstastesmoodsperceptions and emotions ( George200121)
Lack of ownership
In this conceptthe customer has nothing to take away except hisher experienceMost of the services are of
ldquo temporary use‟ and the memories arising from there Like for Raol Guest Housea room will only be
served to enhance or degrade their experience of the service being provided
Perishability
The hospitality offered by the Raol Guest House cannot be storedsaved or reuse-it is perishable
Some new services could be generated A babyndash sitting service a 24 hour room service car rental Fur-
thermore a fitness studio can be set up which will give more profit and a bit of modern touch to the Raol
Guest House Other services like organising transport facilities for their guests suggesting plans of inter-
ests in the area organising tours bookings can be offered Vacation packages also can be offered
13
Price
Price is the value that is placed on something Price is an indispensable element in the marketing mix since
it generated revenue and it is the only basis of recovering the costs and profitsZeithaml ( 1998 ) claimed
that the customers will think whether they received the value of money or before they decide to return the
purchase from the service provider Raol Guest House can adopt a seasonal pricing where the price paid for
a particular service can be during a certain time or period only or even price flexibility also can be em-
braced which is an unstable amount that can be paid for the same services by two different customers or it
can be adjustable price for different customers with the same service depending on the customer relation-
ship ( Keyes 2010104)
Physical Evidence
This factor refers to the ability and environment in which the service will be delivered For example the
interior and exterior decoration its furnishing lights Moreover Raol Guest House will have its own bro-
chures will be available for its customers This service scope includes three physical environment dimen-
sions that represent the relation between services and environment namely
1Environmental conditions such as temperaturesoundsmell
2Space and functions such as mapequipementdecoration
3Signssymbols and artefacts such as decoration style
The more intangible the service the more important it is to make the service around it tangible The physi-
cal evidence serves as a visual metaphor of what the company represents what services it facilitates and
the relations between customers and employees
People
All the staff being employed at Raol Guest House will be the locals since they are more acquainted with
the local tastes The personnel will be trained at a regular basis so as to keep them updated and also to be
able to meet up the customers‟ expectations In this way Raol Guest House will be able to bdquoadd value‟ to
its service through its employees Also the employees will be able to have a good clientele with the cus-
tomers In this way the staff will learn about the guests‟ likes and dislikes thus with this knowledge the
personnel can provide an improved experience to the tourists who would lead to an increased in the profita-
bility margin The resources that Raol Guest House has are its workers from waiter to the General Manag-
er each of them is recruited according to skills qualifications and work experience They are recruited
from Sir Gaeumltan Duval Hotel School Moreover Raol Guest House also encourages continuous training
which will help the employees to create innovate and communicate effectively
14
Process
A process is a flow of activities At Raol Guest House the process is simple since it operated at a small
scale The process is more coordinated according to the needs of the customers
15
Place
Place refers to the physical and virtual environment ambiance staff and activities and at the point of ser-
vice offering The atmosphere and the physical environment are the specific factors that each guest house
getsAccessibility is a critical element of place as it represents the extent to which markets and destinations
are connected (Weaver and Oppermann 2000) The location where Raol Guest House is situated is a highly
tourist attraction The guest house has 35 standard rooms are categorized into 3 groups-(Sea view Moun-
tain View and Road view)
Promotion
Promotion has got a vital role in promoting a destinationit enables to communicate with individual
groups organisations to directly or indirectly facilitate exchange by informing and persuading the different
market segments to welcome the choice of the destination being promoted
A successful promotion strategy is devised by having a push and pull promotion
According to Kotler (2001 pg531)
ldquoA push strategy involves pushing the product through distribution channels to final consumers The prod-
uct directs it marketing activities (personnel selling and trade promotion) toward channel members to in-
clude them to carry the product and to promote it to final consumers Using a pull strategy the producer
directs its marketing activities (primarily advertising and consumer promotions) towards final consumers to
induce them buy the productrdquo
Push strategy is also known as ldquotaking the product to the consumer ldquo The push promotional strategy in-
volves taking the leisure product directly to the customer This can be achieved by making use of any
means and the final aim is to ensure that the customer is aware of the guesthouse‟s name providing the lei-
sure activity at the point of purchase One example of the push promotional strategy is the point of sale
displays in the guesthouse lobby
Pull strategy is also known as ldquoGetting the customer to come to yourdquo The pull strategy is to motivate the
tourists in such a way that they are themselves encouraged to come and seek leisure facilities in the guest-
house One example of the pull strategy is advertising and mass media promotion
According to Kotler (2001) there are five strategy promotional mix they are
Advertising
Advertising is any form of non-personal communication from an identified sponsor about the organization
and its services using the media to influence a target market (Blech amp Blech 1998 Wells Burnett amp Mori-
aty 1998 Zikmund amp D‟amico 1996) This is to inform potential customers about the products that the
organization is offering and to persuade them to buy it Some examples of advertising can be yellow pages
local newspapers radio trade journals exhibitions and websites
16
Sales promotion
It is providing the customers with the basic service adding further appealing packages to it This can help to
achieve customer loyalty and as the same time attract new customers
Public Relations
Public Relations (PR) are defined by the British Institute of Public Relations as the planned and sustained
effort to establish and maintain goodwill between an organisation and its public Public Relations are ex-
tensively used in the tourism industry as a way of communicating with potential customers
Public Relations can also be defined as any group that has actual or potential interest on a company‟s abil-
ity to achieve its objectives (Kotler 2000)
PR is concerned with a number of marketing tasks These include the following
Building or maintaining image
Supporting the other communication activities
Handling problems and issues reinforcing position
Influencing specific publics
Direct Marketing
Direct marketing is to carry out a market research from time to time to know about the exact needs and
wants of the customers and to cater for them This component of the promotional mix does not use the tra-
ditional formal channels of advertising instead it is done through fliers catalogue distribution and promo-
tional letters
Personal Selling
Personal selling is to communicate orally with a potential customer of the leisure activity with the intention
to make a sale This is the most effective form of promotion as the customer is able to get the exact service
and information that she is expecting
17
STRATEGIC PLANNING APPROACHES
The Productmarket opportunity matrix (Ansoff Matrix) has been used to show strategic planning approach
that the company will adopt
Market Penetration
An organisation pursuing a market penetration strategy is aiming to sell more of its existing products in ex-
isting markets To support a market penetration strategy an organisation must make sure that it maintains
and builds the competences that are relevant to the particular market and that it has the relevant capacity to
meet higher levels of demand Raol Guest House can make use of the following strategies make use of ag-
gressive Make use of aggressive advertisement television radio newspapers health conscious magazines
and internet Build customer loyalty by providing discounts on cumulative purchases Offer discount cou-
pon for old customers
Productservice Development
This strategy involves the organisation operating in its existing markets and developing innovative or modi-
fied versions of its existing products to appeal to those markets For an effective product development
strategy an organisation must either be able to build on its existing competences or acquire new ones but it
does allow the organisation to exploit its existing knowledge of its customersRaol Guest House can Devel-
op new types of services like Spa
18
Market Development
This strategy entails expanding into new markets with existing products which are at the most only
slightly modified for the new market These may be new markets geographically new market segments
or new uses for products Whatever the market this approach to growth depends upon the existence of
new consumer groups who are willing and able to buy the existing product The company can look for
international markets like the European Countries enter new market segments market through Social
media (eg Facebook)
Diversification
Diversification involves the organisation moving into new markets with new products Diversification
may become necessary when none of the alternative mechanisms for generating growth are feasible and
is generally thought to be the more risky route to growth But for Raol Guest House for the time being it
can concentrate on the three above strategies since they carry lower risks as the organisation has some
experience in it By contrast the fourth strategy - diversification is much more risky because the organi-
sation is moving into areas in which it has little or no experience As a consequence the instances of
pure diversification are rare When diversification is undertaken the risks can be reduced by concentrat-
ing on either familiar markets or familiar technologies Moving into new markets with products which
require new technologies constitutes the riskiest and also the rarest form of diversification In the long-
runRaol Guest House can opt to diversify
CONTROLS AND EVALAUTION
Implementation
The marketing manager will coordinate the marketing activities that are crucial in achieving the finan-
cial and marketing objectives of the company Raol GuestHouse requires the marketing department to
maintain its professional integrity looking out for its marketing goals and implementing the marketing
programmes as best fits its strategy
Controls
To maximise the return on a marketing plan there need to be controls in place to monitor the plans pro-
gress Control is not a singular thing but a host of tools for making sure that the company is on track
Raol GuestHouse will be using four types of controls to monitor the service marketing plan progress
Annual plan control
The purpose of the annual plan control is to ensure that Raol GuestHouse achieves the sales profits and
other goals established in the marketing plan
Sales analysis - Actual sales will be compared to sales targets and budgets and an analysis of any vari-
ance between the two will be carefully examined
Market share analysis - Raol Guest House will be using overall market share served market share and
19
Customer attitude tracking - Raol Guest House will monitor customer feedback through polls and surveys
The company will carry out customer surveys by phone or in person and host online polls to gauge what
customers feel about the Services The company will also implement a customer complaint and suggestion
scheme to increase customer satisfaction level
Sales-to-expense ratios - Sales-to-expense ratios will be used to determine whether Raol Guest House is
spending too much or too little on marketing the Services in order to achieve its sales goals The following
sales-to-expense ratios will be used
advertising to sales
sales force size to sales
sales promotion to sales
marketing research to sales
Profitability control
Profitability control will help Raol Guest House to evaluate and improve spending and examine whether it
is making profits or losses The following measures will be taken to control its profitability
Sales revenue and costs from the previous year will be compared to that of the current year
Actual and estimated profits will also be compared to determine differences
A cost control system will be developed to maintain costs that remain within the specified budget
Efficiency control
Efficiency control will be used to evaluate and improve the spending efficiency and impact of marketing
expenditures The efficiency of sales force advertising sales promotion and distribution will be moni-
tored
Strategic control
The purpose of strategic control is to examine whether Raol Guest House is pursuing its best opportunities
with respect to markets products and channels The following marketing tools will be used
marketing effectiveness rating instrument
marketing audit
marketing excellence review
company ethical and social responsibility review
20
REFERENCES
BELCH GE AND BELCH MA 2007 Advertising and promotion an integrated marketing communi-
cation perspective In IrwinMcGraw Hill 7th ed Boston Massachusetts 45
FERREL O C and HARTLINEMD 2008 Marketing Strategy Mason Thomson Higher Education
KOEGEL K 2010 ldquoBuilding Brands Onlinerdquo Ad Age Insights October 11
KOTLER P ANG SH LEONG SM and TAN CT 1999 Marketing Management An AsianPer-
spective 2nd Ed Prentice Hall
LANCASTER G AND REYNOLDS P 2005Management of Marketing Burlington Elsevier Butter-
worth ndash Heinemann
WEBSITES httpsquizletcom30731376casino-management-exam-2-flash-cards
httpfacultyjwuedupbagdanHOSP3050worksheetsch14_worksheetdoc
httpfacultyjwuedupbagdanHOSP3050worksheetsCHAPTER2014doc
10
SEGMENTATION
Hotel consumers are varied in a number of aspects Their respective differences often provide a challenge
for firms trying to meet and exceed consumer productservice expectations Smith (1956) defines market
segmentation as a competition defense mechanism in response to differing consumer demand It allows a
firm to divide a heterogeneous market of products and services into smaller homogenous units (Smith
1956) The segment identifies existing and potential consumers and aligns them with the products and ser-
vices that may satisfy a greater number of their specific needs (Smith 1956 amp Forsyth 2009) An industry
with a segmented market allows for the examination of the intrinsic and extrinsic factors that can influ-
ence the consumer‟s decision making in reference to the given product or service Implementing market
segmentation strategies are expected to allow the firm to better target their consumers The segmentation
that Raol Guest House will be using to launch its new product is divided into two groups namely
Geographic Segmentation
It is the division of the market into different geographic units including nations states regions or neigh-
borhoods (Belch amp Belch 2007) Raol Guest House will aim at different countries such as Comoros
Kenya Madagascar Mayotte Reunion Seychelles South Africa and Zimbabwe
Demographic Segmentation
It refers to the division of the market on the basis of demographic variables such as age gender family
size education income and social class Raol Guest House will also be sold in a low price allowing high
class middle class and low class family to purchase the service
TARGETING
Raol Guest House also aims at target one or more segments business travellers through tourists (who stay
one night) regular tourists (who stay 2 or more nights) extended stay residents (who stay up to several
months or longer and conventioneers
11
POSITIONING
To combat the effects of a competitive market environment and to position itself Treacy and Wiersema
suggests three value disciplines which firms should focus their operation (1995) The disciplines Opera-
tional Excellence ProductService Leadership and Customer Intimacy
Operational Excellence
Operational Excellence pertains to the firm‟s ability to provide ldquomiddle-of-the-market products at the best
price with the least inconveniencerdquo to the consumer (Treacy amp Wiersema 1995 p xii) Raol Guest House
focusing on this discipline will utilize a ldquocost reduction in operationsrdquo while still providing reliable prod-
ucts and services at a competitive price (Riemann amp et al 2009 p 4) The firm‟s managers must pay close
attention to cost controls if they seek to achieve an optimized business process (Riemann amp et al 2009
Porter 1980) Raol Guest House utilizing lower costing operational procedures will yield greater returns
when compared to their competitors (Porter 1980)
ProductService Leadership
ProductService Leadership references how the firm strives to offer the best available product or service
(Treacy amp Wiersema 1995) This value discipline relates to the differentiation strategies that the firm may
implement The offered product or service may exceed competing offerings by ldquodesign technology fea-
tures customer servicerdquo or other complex element (Porter 1980 p 36) Strategies focused around
productservice e leadership allow the firm to narrow their business focus to providing the best available
offerings to improve their leadership position (Treacy amp Wiersema 1995) A lodging firm utilizing en-
hanced products and services is further attempting to improve the consumer‟s quality of stay (Riemann amp
et al 2009) This value discipline is expected to yield ldquoabove-average returnsrdquo as it encourages consumer
ldquobrand loyaltyrdquo 30 and a lower threshold for price sensitivity (Porter 1980 p38) The firm develops a
competitive advantage by being at the forefront of product or service innovation (Treacy amp Wiersema
1995)
Customer Intimacy
Customer Intimacy references the firm‟s ability to provide customizable products and services that cater to
the needs and requests of their individual guests (Riemann amp et al 2009) This value discipline is focused
on ldquoserving a particular target [market] very wellrdquo (Porter 1980 p 38) The firm strategically works to-
wards providing a consumer solution oppose to a service (Treacy amp Wiersema 1995) Establishing and
maintaining intimate consumer relationships is important to this discipline (Treacy amp Wiersema 1995)
The firm recognizes the consumers‟ ldquolifetime valuerdquo and attempts to establish lasting consumer loyalty
(Treacy amp Wiersema 1995 p 41) The market strategies developed around this discipline aim to provide
products and services that meet or exceed the specific needs of the consumer McGuire suggests that firms
should strive towards these strategies as they aid the consumer in understanding and differentiating the
uniqueness between competing firms (2009)
12
MARKETING MIX
ldquoThe marketing mix concept is a well-established tool used as a structure by marketers It consists of the
various elements of a marketing programmed which need to be considered in order to successfully imple-
ment the marketing strategy and positioning in the company‟s market It is the important internal elements
or ingredients that make up an organization‟s marketing programmerdquo- Adrian Payne
Product
ldquoA product is anything that can be offered to a market for attention use or consumption that might satisfy a
want or a need It includes physical objects services places organisations and ideasrdquo KotlerBowen and
Makens
In the tourism industry there is no production of goods but rather this industry provides a myriad of ser-
vices and experiences The service that Raol Guest House procures has special characteristics
Intangibility
Services can be purchased but cannot be seen touched or tasted ndashthey are intangible The heart of a service
is the experience created for the customer In choosing Raol Guest House a customer might look to the ad-
ditional services that Raol Guest House offers to its customers
Inseparability
The service is created and consumed at the same time Therefore the client and employee are both in-
volved during this process During this process it is vital to keep the same standard of service when deliv-
ering to its customers
Heterogeneity
No 2 customers will demand exactly the same service they will have different de-
mandsexpectationstastesmoodsperceptions and emotions ( George200121)
Lack of ownership
In this conceptthe customer has nothing to take away except hisher experienceMost of the services are of
ldquo temporary use‟ and the memories arising from there Like for Raol Guest Housea room will only be
served to enhance or degrade their experience of the service being provided
Perishability
The hospitality offered by the Raol Guest House cannot be storedsaved or reuse-it is perishable
Some new services could be generated A babyndash sitting service a 24 hour room service car rental Fur-
thermore a fitness studio can be set up which will give more profit and a bit of modern touch to the Raol
Guest House Other services like organising transport facilities for their guests suggesting plans of inter-
ests in the area organising tours bookings can be offered Vacation packages also can be offered
13
Price
Price is the value that is placed on something Price is an indispensable element in the marketing mix since
it generated revenue and it is the only basis of recovering the costs and profitsZeithaml ( 1998 ) claimed
that the customers will think whether they received the value of money or before they decide to return the
purchase from the service provider Raol Guest House can adopt a seasonal pricing where the price paid for
a particular service can be during a certain time or period only or even price flexibility also can be em-
braced which is an unstable amount that can be paid for the same services by two different customers or it
can be adjustable price for different customers with the same service depending on the customer relation-
ship ( Keyes 2010104)
Physical Evidence
This factor refers to the ability and environment in which the service will be delivered For example the
interior and exterior decoration its furnishing lights Moreover Raol Guest House will have its own bro-
chures will be available for its customers This service scope includes three physical environment dimen-
sions that represent the relation between services and environment namely
1Environmental conditions such as temperaturesoundsmell
2Space and functions such as mapequipementdecoration
3Signssymbols and artefacts such as decoration style
The more intangible the service the more important it is to make the service around it tangible The physi-
cal evidence serves as a visual metaphor of what the company represents what services it facilitates and
the relations between customers and employees
People
All the staff being employed at Raol Guest House will be the locals since they are more acquainted with
the local tastes The personnel will be trained at a regular basis so as to keep them updated and also to be
able to meet up the customers‟ expectations In this way Raol Guest House will be able to bdquoadd value‟ to
its service through its employees Also the employees will be able to have a good clientele with the cus-
tomers In this way the staff will learn about the guests‟ likes and dislikes thus with this knowledge the
personnel can provide an improved experience to the tourists who would lead to an increased in the profita-
bility margin The resources that Raol Guest House has are its workers from waiter to the General Manag-
er each of them is recruited according to skills qualifications and work experience They are recruited
from Sir Gaeumltan Duval Hotel School Moreover Raol Guest House also encourages continuous training
which will help the employees to create innovate and communicate effectively
14
Process
A process is a flow of activities At Raol Guest House the process is simple since it operated at a small
scale The process is more coordinated according to the needs of the customers
15
Place
Place refers to the physical and virtual environment ambiance staff and activities and at the point of ser-
vice offering The atmosphere and the physical environment are the specific factors that each guest house
getsAccessibility is a critical element of place as it represents the extent to which markets and destinations
are connected (Weaver and Oppermann 2000) The location where Raol Guest House is situated is a highly
tourist attraction The guest house has 35 standard rooms are categorized into 3 groups-(Sea view Moun-
tain View and Road view)
Promotion
Promotion has got a vital role in promoting a destinationit enables to communicate with individual
groups organisations to directly or indirectly facilitate exchange by informing and persuading the different
market segments to welcome the choice of the destination being promoted
A successful promotion strategy is devised by having a push and pull promotion
According to Kotler (2001 pg531)
ldquoA push strategy involves pushing the product through distribution channels to final consumers The prod-
uct directs it marketing activities (personnel selling and trade promotion) toward channel members to in-
clude them to carry the product and to promote it to final consumers Using a pull strategy the producer
directs its marketing activities (primarily advertising and consumer promotions) towards final consumers to
induce them buy the productrdquo
Push strategy is also known as ldquotaking the product to the consumer ldquo The push promotional strategy in-
volves taking the leisure product directly to the customer This can be achieved by making use of any
means and the final aim is to ensure that the customer is aware of the guesthouse‟s name providing the lei-
sure activity at the point of purchase One example of the push promotional strategy is the point of sale
displays in the guesthouse lobby
Pull strategy is also known as ldquoGetting the customer to come to yourdquo The pull strategy is to motivate the
tourists in such a way that they are themselves encouraged to come and seek leisure facilities in the guest-
house One example of the pull strategy is advertising and mass media promotion
According to Kotler (2001) there are five strategy promotional mix they are
Advertising
Advertising is any form of non-personal communication from an identified sponsor about the organization
and its services using the media to influence a target market (Blech amp Blech 1998 Wells Burnett amp Mori-
aty 1998 Zikmund amp D‟amico 1996) This is to inform potential customers about the products that the
organization is offering and to persuade them to buy it Some examples of advertising can be yellow pages
local newspapers radio trade journals exhibitions and websites
16
Sales promotion
It is providing the customers with the basic service adding further appealing packages to it This can help to
achieve customer loyalty and as the same time attract new customers
Public Relations
Public Relations (PR) are defined by the British Institute of Public Relations as the planned and sustained
effort to establish and maintain goodwill between an organisation and its public Public Relations are ex-
tensively used in the tourism industry as a way of communicating with potential customers
Public Relations can also be defined as any group that has actual or potential interest on a company‟s abil-
ity to achieve its objectives (Kotler 2000)
PR is concerned with a number of marketing tasks These include the following
Building or maintaining image
Supporting the other communication activities
Handling problems and issues reinforcing position
Influencing specific publics
Direct Marketing
Direct marketing is to carry out a market research from time to time to know about the exact needs and
wants of the customers and to cater for them This component of the promotional mix does not use the tra-
ditional formal channels of advertising instead it is done through fliers catalogue distribution and promo-
tional letters
Personal Selling
Personal selling is to communicate orally with a potential customer of the leisure activity with the intention
to make a sale This is the most effective form of promotion as the customer is able to get the exact service
and information that she is expecting
17
STRATEGIC PLANNING APPROACHES
The Productmarket opportunity matrix (Ansoff Matrix) has been used to show strategic planning approach
that the company will adopt
Market Penetration
An organisation pursuing a market penetration strategy is aiming to sell more of its existing products in ex-
isting markets To support a market penetration strategy an organisation must make sure that it maintains
and builds the competences that are relevant to the particular market and that it has the relevant capacity to
meet higher levels of demand Raol Guest House can make use of the following strategies make use of ag-
gressive Make use of aggressive advertisement television radio newspapers health conscious magazines
and internet Build customer loyalty by providing discounts on cumulative purchases Offer discount cou-
pon for old customers
Productservice Development
This strategy involves the organisation operating in its existing markets and developing innovative or modi-
fied versions of its existing products to appeal to those markets For an effective product development
strategy an organisation must either be able to build on its existing competences or acquire new ones but it
does allow the organisation to exploit its existing knowledge of its customersRaol Guest House can Devel-
op new types of services like Spa
18
Market Development
This strategy entails expanding into new markets with existing products which are at the most only
slightly modified for the new market These may be new markets geographically new market segments
or new uses for products Whatever the market this approach to growth depends upon the existence of
new consumer groups who are willing and able to buy the existing product The company can look for
international markets like the European Countries enter new market segments market through Social
media (eg Facebook)
Diversification
Diversification involves the organisation moving into new markets with new products Diversification
may become necessary when none of the alternative mechanisms for generating growth are feasible and
is generally thought to be the more risky route to growth But for Raol Guest House for the time being it
can concentrate on the three above strategies since they carry lower risks as the organisation has some
experience in it By contrast the fourth strategy - diversification is much more risky because the organi-
sation is moving into areas in which it has little or no experience As a consequence the instances of
pure diversification are rare When diversification is undertaken the risks can be reduced by concentrat-
ing on either familiar markets or familiar technologies Moving into new markets with products which
require new technologies constitutes the riskiest and also the rarest form of diversification In the long-
runRaol Guest House can opt to diversify
CONTROLS AND EVALAUTION
Implementation
The marketing manager will coordinate the marketing activities that are crucial in achieving the finan-
cial and marketing objectives of the company Raol GuestHouse requires the marketing department to
maintain its professional integrity looking out for its marketing goals and implementing the marketing
programmes as best fits its strategy
Controls
To maximise the return on a marketing plan there need to be controls in place to monitor the plans pro-
gress Control is not a singular thing but a host of tools for making sure that the company is on track
Raol GuestHouse will be using four types of controls to monitor the service marketing plan progress
Annual plan control
The purpose of the annual plan control is to ensure that Raol GuestHouse achieves the sales profits and
other goals established in the marketing plan
Sales analysis - Actual sales will be compared to sales targets and budgets and an analysis of any vari-
ance between the two will be carefully examined
Market share analysis - Raol Guest House will be using overall market share served market share and
19
Customer attitude tracking - Raol Guest House will monitor customer feedback through polls and surveys
The company will carry out customer surveys by phone or in person and host online polls to gauge what
customers feel about the Services The company will also implement a customer complaint and suggestion
scheme to increase customer satisfaction level
Sales-to-expense ratios - Sales-to-expense ratios will be used to determine whether Raol Guest House is
spending too much or too little on marketing the Services in order to achieve its sales goals The following
sales-to-expense ratios will be used
advertising to sales
sales force size to sales
sales promotion to sales
marketing research to sales
Profitability control
Profitability control will help Raol Guest House to evaluate and improve spending and examine whether it
is making profits or losses The following measures will be taken to control its profitability
Sales revenue and costs from the previous year will be compared to that of the current year
Actual and estimated profits will also be compared to determine differences
A cost control system will be developed to maintain costs that remain within the specified budget
Efficiency control
Efficiency control will be used to evaluate and improve the spending efficiency and impact of marketing
expenditures The efficiency of sales force advertising sales promotion and distribution will be moni-
tored
Strategic control
The purpose of strategic control is to examine whether Raol Guest House is pursuing its best opportunities
with respect to markets products and channels The following marketing tools will be used
marketing effectiveness rating instrument
marketing audit
marketing excellence review
company ethical and social responsibility review
20
REFERENCES
BELCH GE AND BELCH MA 2007 Advertising and promotion an integrated marketing communi-
cation perspective In IrwinMcGraw Hill 7th ed Boston Massachusetts 45
FERREL O C and HARTLINEMD 2008 Marketing Strategy Mason Thomson Higher Education
KOEGEL K 2010 ldquoBuilding Brands Onlinerdquo Ad Age Insights October 11
KOTLER P ANG SH LEONG SM and TAN CT 1999 Marketing Management An AsianPer-
spective 2nd Ed Prentice Hall
LANCASTER G AND REYNOLDS P 2005Management of Marketing Burlington Elsevier Butter-
worth ndash Heinemann
WEBSITES httpsquizletcom30731376casino-management-exam-2-flash-cards
httpfacultyjwuedupbagdanHOSP3050worksheetsch14_worksheetdoc
httpfacultyjwuedupbagdanHOSP3050worksheetsCHAPTER2014doc
11
POSITIONING
To combat the effects of a competitive market environment and to position itself Treacy and Wiersema
suggests three value disciplines which firms should focus their operation (1995) The disciplines Opera-
tional Excellence ProductService Leadership and Customer Intimacy
Operational Excellence
Operational Excellence pertains to the firm‟s ability to provide ldquomiddle-of-the-market products at the best
price with the least inconveniencerdquo to the consumer (Treacy amp Wiersema 1995 p xii) Raol Guest House
focusing on this discipline will utilize a ldquocost reduction in operationsrdquo while still providing reliable prod-
ucts and services at a competitive price (Riemann amp et al 2009 p 4) The firm‟s managers must pay close
attention to cost controls if they seek to achieve an optimized business process (Riemann amp et al 2009
Porter 1980) Raol Guest House utilizing lower costing operational procedures will yield greater returns
when compared to their competitors (Porter 1980)
ProductService Leadership
ProductService Leadership references how the firm strives to offer the best available product or service
(Treacy amp Wiersema 1995) This value discipline relates to the differentiation strategies that the firm may
implement The offered product or service may exceed competing offerings by ldquodesign technology fea-
tures customer servicerdquo or other complex element (Porter 1980 p 36) Strategies focused around
productservice e leadership allow the firm to narrow their business focus to providing the best available
offerings to improve their leadership position (Treacy amp Wiersema 1995) A lodging firm utilizing en-
hanced products and services is further attempting to improve the consumer‟s quality of stay (Riemann amp
et al 2009) This value discipline is expected to yield ldquoabove-average returnsrdquo as it encourages consumer
ldquobrand loyaltyrdquo 30 and a lower threshold for price sensitivity (Porter 1980 p38) The firm develops a
competitive advantage by being at the forefront of product or service innovation (Treacy amp Wiersema
1995)
Customer Intimacy
Customer Intimacy references the firm‟s ability to provide customizable products and services that cater to
the needs and requests of their individual guests (Riemann amp et al 2009) This value discipline is focused
on ldquoserving a particular target [market] very wellrdquo (Porter 1980 p 38) The firm strategically works to-
wards providing a consumer solution oppose to a service (Treacy amp Wiersema 1995) Establishing and
maintaining intimate consumer relationships is important to this discipline (Treacy amp Wiersema 1995)
The firm recognizes the consumers‟ ldquolifetime valuerdquo and attempts to establish lasting consumer loyalty
(Treacy amp Wiersema 1995 p 41) The market strategies developed around this discipline aim to provide
products and services that meet or exceed the specific needs of the consumer McGuire suggests that firms
should strive towards these strategies as they aid the consumer in understanding and differentiating the
uniqueness between competing firms (2009)
12
MARKETING MIX
ldquoThe marketing mix concept is a well-established tool used as a structure by marketers It consists of the
various elements of a marketing programmed which need to be considered in order to successfully imple-
ment the marketing strategy and positioning in the company‟s market It is the important internal elements
or ingredients that make up an organization‟s marketing programmerdquo- Adrian Payne
Product
ldquoA product is anything that can be offered to a market for attention use or consumption that might satisfy a
want or a need It includes physical objects services places organisations and ideasrdquo KotlerBowen and
Makens
In the tourism industry there is no production of goods but rather this industry provides a myriad of ser-
vices and experiences The service that Raol Guest House procures has special characteristics
Intangibility
Services can be purchased but cannot be seen touched or tasted ndashthey are intangible The heart of a service
is the experience created for the customer In choosing Raol Guest House a customer might look to the ad-
ditional services that Raol Guest House offers to its customers
Inseparability
The service is created and consumed at the same time Therefore the client and employee are both in-
volved during this process During this process it is vital to keep the same standard of service when deliv-
ering to its customers
Heterogeneity
No 2 customers will demand exactly the same service they will have different de-
mandsexpectationstastesmoodsperceptions and emotions ( George200121)
Lack of ownership
In this conceptthe customer has nothing to take away except hisher experienceMost of the services are of
ldquo temporary use‟ and the memories arising from there Like for Raol Guest Housea room will only be
served to enhance or degrade their experience of the service being provided
Perishability
The hospitality offered by the Raol Guest House cannot be storedsaved or reuse-it is perishable
Some new services could be generated A babyndash sitting service a 24 hour room service car rental Fur-
thermore a fitness studio can be set up which will give more profit and a bit of modern touch to the Raol
Guest House Other services like organising transport facilities for their guests suggesting plans of inter-
ests in the area organising tours bookings can be offered Vacation packages also can be offered
13
Price
Price is the value that is placed on something Price is an indispensable element in the marketing mix since
it generated revenue and it is the only basis of recovering the costs and profitsZeithaml ( 1998 ) claimed
that the customers will think whether they received the value of money or before they decide to return the
purchase from the service provider Raol Guest House can adopt a seasonal pricing where the price paid for
a particular service can be during a certain time or period only or even price flexibility also can be em-
braced which is an unstable amount that can be paid for the same services by two different customers or it
can be adjustable price for different customers with the same service depending on the customer relation-
ship ( Keyes 2010104)
Physical Evidence
This factor refers to the ability and environment in which the service will be delivered For example the
interior and exterior decoration its furnishing lights Moreover Raol Guest House will have its own bro-
chures will be available for its customers This service scope includes three physical environment dimen-
sions that represent the relation between services and environment namely
1Environmental conditions such as temperaturesoundsmell
2Space and functions such as mapequipementdecoration
3Signssymbols and artefacts such as decoration style
The more intangible the service the more important it is to make the service around it tangible The physi-
cal evidence serves as a visual metaphor of what the company represents what services it facilitates and
the relations between customers and employees
People
All the staff being employed at Raol Guest House will be the locals since they are more acquainted with
the local tastes The personnel will be trained at a regular basis so as to keep them updated and also to be
able to meet up the customers‟ expectations In this way Raol Guest House will be able to bdquoadd value‟ to
its service through its employees Also the employees will be able to have a good clientele with the cus-
tomers In this way the staff will learn about the guests‟ likes and dislikes thus with this knowledge the
personnel can provide an improved experience to the tourists who would lead to an increased in the profita-
bility margin The resources that Raol Guest House has are its workers from waiter to the General Manag-
er each of them is recruited according to skills qualifications and work experience They are recruited
from Sir Gaeumltan Duval Hotel School Moreover Raol Guest House also encourages continuous training
which will help the employees to create innovate and communicate effectively
14
Process
A process is a flow of activities At Raol Guest House the process is simple since it operated at a small
scale The process is more coordinated according to the needs of the customers
15
Place
Place refers to the physical and virtual environment ambiance staff and activities and at the point of ser-
vice offering The atmosphere and the physical environment are the specific factors that each guest house
getsAccessibility is a critical element of place as it represents the extent to which markets and destinations
are connected (Weaver and Oppermann 2000) The location where Raol Guest House is situated is a highly
tourist attraction The guest house has 35 standard rooms are categorized into 3 groups-(Sea view Moun-
tain View and Road view)
Promotion
Promotion has got a vital role in promoting a destinationit enables to communicate with individual
groups organisations to directly or indirectly facilitate exchange by informing and persuading the different
market segments to welcome the choice of the destination being promoted
A successful promotion strategy is devised by having a push and pull promotion
According to Kotler (2001 pg531)
ldquoA push strategy involves pushing the product through distribution channels to final consumers The prod-
uct directs it marketing activities (personnel selling and trade promotion) toward channel members to in-
clude them to carry the product and to promote it to final consumers Using a pull strategy the producer
directs its marketing activities (primarily advertising and consumer promotions) towards final consumers to
induce them buy the productrdquo
Push strategy is also known as ldquotaking the product to the consumer ldquo The push promotional strategy in-
volves taking the leisure product directly to the customer This can be achieved by making use of any
means and the final aim is to ensure that the customer is aware of the guesthouse‟s name providing the lei-
sure activity at the point of purchase One example of the push promotional strategy is the point of sale
displays in the guesthouse lobby
Pull strategy is also known as ldquoGetting the customer to come to yourdquo The pull strategy is to motivate the
tourists in such a way that they are themselves encouraged to come and seek leisure facilities in the guest-
house One example of the pull strategy is advertising and mass media promotion
According to Kotler (2001) there are five strategy promotional mix they are
Advertising
Advertising is any form of non-personal communication from an identified sponsor about the organization
and its services using the media to influence a target market (Blech amp Blech 1998 Wells Burnett amp Mori-
aty 1998 Zikmund amp D‟amico 1996) This is to inform potential customers about the products that the
organization is offering and to persuade them to buy it Some examples of advertising can be yellow pages
local newspapers radio trade journals exhibitions and websites
16
Sales promotion
It is providing the customers with the basic service adding further appealing packages to it This can help to
achieve customer loyalty and as the same time attract new customers
Public Relations
Public Relations (PR) are defined by the British Institute of Public Relations as the planned and sustained
effort to establish and maintain goodwill between an organisation and its public Public Relations are ex-
tensively used in the tourism industry as a way of communicating with potential customers
Public Relations can also be defined as any group that has actual or potential interest on a company‟s abil-
ity to achieve its objectives (Kotler 2000)
PR is concerned with a number of marketing tasks These include the following
Building or maintaining image
Supporting the other communication activities
Handling problems and issues reinforcing position
Influencing specific publics
Direct Marketing
Direct marketing is to carry out a market research from time to time to know about the exact needs and
wants of the customers and to cater for them This component of the promotional mix does not use the tra-
ditional formal channels of advertising instead it is done through fliers catalogue distribution and promo-
tional letters
Personal Selling
Personal selling is to communicate orally with a potential customer of the leisure activity with the intention
to make a sale This is the most effective form of promotion as the customer is able to get the exact service
and information that she is expecting
17
STRATEGIC PLANNING APPROACHES
The Productmarket opportunity matrix (Ansoff Matrix) has been used to show strategic planning approach
that the company will adopt
Market Penetration
An organisation pursuing a market penetration strategy is aiming to sell more of its existing products in ex-
isting markets To support a market penetration strategy an organisation must make sure that it maintains
and builds the competences that are relevant to the particular market and that it has the relevant capacity to
meet higher levels of demand Raol Guest House can make use of the following strategies make use of ag-
gressive Make use of aggressive advertisement television radio newspapers health conscious magazines
and internet Build customer loyalty by providing discounts on cumulative purchases Offer discount cou-
pon for old customers
Productservice Development
This strategy involves the organisation operating in its existing markets and developing innovative or modi-
fied versions of its existing products to appeal to those markets For an effective product development
strategy an organisation must either be able to build on its existing competences or acquire new ones but it
does allow the organisation to exploit its existing knowledge of its customersRaol Guest House can Devel-
op new types of services like Spa
18
Market Development
This strategy entails expanding into new markets with existing products which are at the most only
slightly modified for the new market These may be new markets geographically new market segments
or new uses for products Whatever the market this approach to growth depends upon the existence of
new consumer groups who are willing and able to buy the existing product The company can look for
international markets like the European Countries enter new market segments market through Social
media (eg Facebook)
Diversification
Diversification involves the organisation moving into new markets with new products Diversification
may become necessary when none of the alternative mechanisms for generating growth are feasible and
is generally thought to be the more risky route to growth But for Raol Guest House for the time being it
can concentrate on the three above strategies since they carry lower risks as the organisation has some
experience in it By contrast the fourth strategy - diversification is much more risky because the organi-
sation is moving into areas in which it has little or no experience As a consequence the instances of
pure diversification are rare When diversification is undertaken the risks can be reduced by concentrat-
ing on either familiar markets or familiar technologies Moving into new markets with products which
require new technologies constitutes the riskiest and also the rarest form of diversification In the long-
runRaol Guest House can opt to diversify
CONTROLS AND EVALAUTION
Implementation
The marketing manager will coordinate the marketing activities that are crucial in achieving the finan-
cial and marketing objectives of the company Raol GuestHouse requires the marketing department to
maintain its professional integrity looking out for its marketing goals and implementing the marketing
programmes as best fits its strategy
Controls
To maximise the return on a marketing plan there need to be controls in place to monitor the plans pro-
gress Control is not a singular thing but a host of tools for making sure that the company is on track
Raol GuestHouse will be using four types of controls to monitor the service marketing plan progress
Annual plan control
The purpose of the annual plan control is to ensure that Raol GuestHouse achieves the sales profits and
other goals established in the marketing plan
Sales analysis - Actual sales will be compared to sales targets and budgets and an analysis of any vari-
ance between the two will be carefully examined
Market share analysis - Raol Guest House will be using overall market share served market share and
19
Customer attitude tracking - Raol Guest House will monitor customer feedback through polls and surveys
The company will carry out customer surveys by phone or in person and host online polls to gauge what
customers feel about the Services The company will also implement a customer complaint and suggestion
scheme to increase customer satisfaction level
Sales-to-expense ratios - Sales-to-expense ratios will be used to determine whether Raol Guest House is
spending too much or too little on marketing the Services in order to achieve its sales goals The following
sales-to-expense ratios will be used
advertising to sales
sales force size to sales
sales promotion to sales
marketing research to sales
Profitability control
Profitability control will help Raol Guest House to evaluate and improve spending and examine whether it
is making profits or losses The following measures will be taken to control its profitability
Sales revenue and costs from the previous year will be compared to that of the current year
Actual and estimated profits will also be compared to determine differences
A cost control system will be developed to maintain costs that remain within the specified budget
Efficiency control
Efficiency control will be used to evaluate and improve the spending efficiency and impact of marketing
expenditures The efficiency of sales force advertising sales promotion and distribution will be moni-
tored
Strategic control
The purpose of strategic control is to examine whether Raol Guest House is pursuing its best opportunities
with respect to markets products and channels The following marketing tools will be used
marketing effectiveness rating instrument
marketing audit
marketing excellence review
company ethical and social responsibility review
20
REFERENCES
BELCH GE AND BELCH MA 2007 Advertising and promotion an integrated marketing communi-
cation perspective In IrwinMcGraw Hill 7th ed Boston Massachusetts 45
FERREL O C and HARTLINEMD 2008 Marketing Strategy Mason Thomson Higher Education
KOEGEL K 2010 ldquoBuilding Brands Onlinerdquo Ad Age Insights October 11
KOTLER P ANG SH LEONG SM and TAN CT 1999 Marketing Management An AsianPer-
spective 2nd Ed Prentice Hall
LANCASTER G AND REYNOLDS P 2005Management of Marketing Burlington Elsevier Butter-
worth ndash Heinemann
WEBSITES httpsquizletcom30731376casino-management-exam-2-flash-cards
httpfacultyjwuedupbagdanHOSP3050worksheetsch14_worksheetdoc
httpfacultyjwuedupbagdanHOSP3050worksheetsCHAPTER2014doc
12
MARKETING MIX
ldquoThe marketing mix concept is a well-established tool used as a structure by marketers It consists of the
various elements of a marketing programmed which need to be considered in order to successfully imple-
ment the marketing strategy and positioning in the company‟s market It is the important internal elements
or ingredients that make up an organization‟s marketing programmerdquo- Adrian Payne
Product
ldquoA product is anything that can be offered to a market for attention use or consumption that might satisfy a
want or a need It includes physical objects services places organisations and ideasrdquo KotlerBowen and
Makens
In the tourism industry there is no production of goods but rather this industry provides a myriad of ser-
vices and experiences The service that Raol Guest House procures has special characteristics
Intangibility
Services can be purchased but cannot be seen touched or tasted ndashthey are intangible The heart of a service
is the experience created for the customer In choosing Raol Guest House a customer might look to the ad-
ditional services that Raol Guest House offers to its customers
Inseparability
The service is created and consumed at the same time Therefore the client and employee are both in-
volved during this process During this process it is vital to keep the same standard of service when deliv-
ering to its customers
Heterogeneity
No 2 customers will demand exactly the same service they will have different de-
mandsexpectationstastesmoodsperceptions and emotions ( George200121)
Lack of ownership
In this conceptthe customer has nothing to take away except hisher experienceMost of the services are of
ldquo temporary use‟ and the memories arising from there Like for Raol Guest Housea room will only be
served to enhance or degrade their experience of the service being provided
Perishability
The hospitality offered by the Raol Guest House cannot be storedsaved or reuse-it is perishable
Some new services could be generated A babyndash sitting service a 24 hour room service car rental Fur-
thermore a fitness studio can be set up which will give more profit and a bit of modern touch to the Raol
Guest House Other services like organising transport facilities for their guests suggesting plans of inter-
ests in the area organising tours bookings can be offered Vacation packages also can be offered
13
Price
Price is the value that is placed on something Price is an indispensable element in the marketing mix since
it generated revenue and it is the only basis of recovering the costs and profitsZeithaml ( 1998 ) claimed
that the customers will think whether they received the value of money or before they decide to return the
purchase from the service provider Raol Guest House can adopt a seasonal pricing where the price paid for
a particular service can be during a certain time or period only or even price flexibility also can be em-
braced which is an unstable amount that can be paid for the same services by two different customers or it
can be adjustable price for different customers with the same service depending on the customer relation-
ship ( Keyes 2010104)
Physical Evidence
This factor refers to the ability and environment in which the service will be delivered For example the
interior and exterior decoration its furnishing lights Moreover Raol Guest House will have its own bro-
chures will be available for its customers This service scope includes three physical environment dimen-
sions that represent the relation between services and environment namely
1Environmental conditions such as temperaturesoundsmell
2Space and functions such as mapequipementdecoration
3Signssymbols and artefacts such as decoration style
The more intangible the service the more important it is to make the service around it tangible The physi-
cal evidence serves as a visual metaphor of what the company represents what services it facilitates and
the relations between customers and employees
People
All the staff being employed at Raol Guest House will be the locals since they are more acquainted with
the local tastes The personnel will be trained at a regular basis so as to keep them updated and also to be
able to meet up the customers‟ expectations In this way Raol Guest House will be able to bdquoadd value‟ to
its service through its employees Also the employees will be able to have a good clientele with the cus-
tomers In this way the staff will learn about the guests‟ likes and dislikes thus with this knowledge the
personnel can provide an improved experience to the tourists who would lead to an increased in the profita-
bility margin The resources that Raol Guest House has are its workers from waiter to the General Manag-
er each of them is recruited according to skills qualifications and work experience They are recruited
from Sir Gaeumltan Duval Hotel School Moreover Raol Guest House also encourages continuous training
which will help the employees to create innovate and communicate effectively
14
Process
A process is a flow of activities At Raol Guest House the process is simple since it operated at a small
scale The process is more coordinated according to the needs of the customers
15
Place
Place refers to the physical and virtual environment ambiance staff and activities and at the point of ser-
vice offering The atmosphere and the physical environment are the specific factors that each guest house
getsAccessibility is a critical element of place as it represents the extent to which markets and destinations
are connected (Weaver and Oppermann 2000) The location where Raol Guest House is situated is a highly
tourist attraction The guest house has 35 standard rooms are categorized into 3 groups-(Sea view Moun-
tain View and Road view)
Promotion
Promotion has got a vital role in promoting a destinationit enables to communicate with individual
groups organisations to directly or indirectly facilitate exchange by informing and persuading the different
market segments to welcome the choice of the destination being promoted
A successful promotion strategy is devised by having a push and pull promotion
According to Kotler (2001 pg531)
ldquoA push strategy involves pushing the product through distribution channels to final consumers The prod-
uct directs it marketing activities (personnel selling and trade promotion) toward channel members to in-
clude them to carry the product and to promote it to final consumers Using a pull strategy the producer
directs its marketing activities (primarily advertising and consumer promotions) towards final consumers to
induce them buy the productrdquo
Push strategy is also known as ldquotaking the product to the consumer ldquo The push promotional strategy in-
volves taking the leisure product directly to the customer This can be achieved by making use of any
means and the final aim is to ensure that the customer is aware of the guesthouse‟s name providing the lei-
sure activity at the point of purchase One example of the push promotional strategy is the point of sale
displays in the guesthouse lobby
Pull strategy is also known as ldquoGetting the customer to come to yourdquo The pull strategy is to motivate the
tourists in such a way that they are themselves encouraged to come and seek leisure facilities in the guest-
house One example of the pull strategy is advertising and mass media promotion
According to Kotler (2001) there are five strategy promotional mix they are
Advertising
Advertising is any form of non-personal communication from an identified sponsor about the organization
and its services using the media to influence a target market (Blech amp Blech 1998 Wells Burnett amp Mori-
aty 1998 Zikmund amp D‟amico 1996) This is to inform potential customers about the products that the
organization is offering and to persuade them to buy it Some examples of advertising can be yellow pages
local newspapers radio trade journals exhibitions and websites
16
Sales promotion
It is providing the customers with the basic service adding further appealing packages to it This can help to
achieve customer loyalty and as the same time attract new customers
Public Relations
Public Relations (PR) are defined by the British Institute of Public Relations as the planned and sustained
effort to establish and maintain goodwill between an organisation and its public Public Relations are ex-
tensively used in the tourism industry as a way of communicating with potential customers
Public Relations can also be defined as any group that has actual or potential interest on a company‟s abil-
ity to achieve its objectives (Kotler 2000)
PR is concerned with a number of marketing tasks These include the following
Building or maintaining image
Supporting the other communication activities
Handling problems and issues reinforcing position
Influencing specific publics
Direct Marketing
Direct marketing is to carry out a market research from time to time to know about the exact needs and
wants of the customers and to cater for them This component of the promotional mix does not use the tra-
ditional formal channels of advertising instead it is done through fliers catalogue distribution and promo-
tional letters
Personal Selling
Personal selling is to communicate orally with a potential customer of the leisure activity with the intention
to make a sale This is the most effective form of promotion as the customer is able to get the exact service
and information that she is expecting
17
STRATEGIC PLANNING APPROACHES
The Productmarket opportunity matrix (Ansoff Matrix) has been used to show strategic planning approach
that the company will adopt
Market Penetration
An organisation pursuing a market penetration strategy is aiming to sell more of its existing products in ex-
isting markets To support a market penetration strategy an organisation must make sure that it maintains
and builds the competences that are relevant to the particular market and that it has the relevant capacity to
meet higher levels of demand Raol Guest House can make use of the following strategies make use of ag-
gressive Make use of aggressive advertisement television radio newspapers health conscious magazines
and internet Build customer loyalty by providing discounts on cumulative purchases Offer discount cou-
pon for old customers
Productservice Development
This strategy involves the organisation operating in its existing markets and developing innovative or modi-
fied versions of its existing products to appeal to those markets For an effective product development
strategy an organisation must either be able to build on its existing competences or acquire new ones but it
does allow the organisation to exploit its existing knowledge of its customersRaol Guest House can Devel-
op new types of services like Spa
18
Market Development
This strategy entails expanding into new markets with existing products which are at the most only
slightly modified for the new market These may be new markets geographically new market segments
or new uses for products Whatever the market this approach to growth depends upon the existence of
new consumer groups who are willing and able to buy the existing product The company can look for
international markets like the European Countries enter new market segments market through Social
media (eg Facebook)
Diversification
Diversification involves the organisation moving into new markets with new products Diversification
may become necessary when none of the alternative mechanisms for generating growth are feasible and
is generally thought to be the more risky route to growth But for Raol Guest House for the time being it
can concentrate on the three above strategies since they carry lower risks as the organisation has some
experience in it By contrast the fourth strategy - diversification is much more risky because the organi-
sation is moving into areas in which it has little or no experience As a consequence the instances of
pure diversification are rare When diversification is undertaken the risks can be reduced by concentrat-
ing on either familiar markets or familiar technologies Moving into new markets with products which
require new technologies constitutes the riskiest and also the rarest form of diversification In the long-
runRaol Guest House can opt to diversify
CONTROLS AND EVALAUTION
Implementation
The marketing manager will coordinate the marketing activities that are crucial in achieving the finan-
cial and marketing objectives of the company Raol GuestHouse requires the marketing department to
maintain its professional integrity looking out for its marketing goals and implementing the marketing
programmes as best fits its strategy
Controls
To maximise the return on a marketing plan there need to be controls in place to monitor the plans pro-
gress Control is not a singular thing but a host of tools for making sure that the company is on track
Raol GuestHouse will be using four types of controls to monitor the service marketing plan progress
Annual plan control
The purpose of the annual plan control is to ensure that Raol GuestHouse achieves the sales profits and
other goals established in the marketing plan
Sales analysis - Actual sales will be compared to sales targets and budgets and an analysis of any vari-
ance between the two will be carefully examined
Market share analysis - Raol Guest House will be using overall market share served market share and
19
Customer attitude tracking - Raol Guest House will monitor customer feedback through polls and surveys
The company will carry out customer surveys by phone or in person and host online polls to gauge what
customers feel about the Services The company will also implement a customer complaint and suggestion
scheme to increase customer satisfaction level
Sales-to-expense ratios - Sales-to-expense ratios will be used to determine whether Raol Guest House is
spending too much or too little on marketing the Services in order to achieve its sales goals The following
sales-to-expense ratios will be used
advertising to sales
sales force size to sales
sales promotion to sales
marketing research to sales
Profitability control
Profitability control will help Raol Guest House to evaluate and improve spending and examine whether it
is making profits or losses The following measures will be taken to control its profitability
Sales revenue and costs from the previous year will be compared to that of the current year
Actual and estimated profits will also be compared to determine differences
A cost control system will be developed to maintain costs that remain within the specified budget
Efficiency control
Efficiency control will be used to evaluate and improve the spending efficiency and impact of marketing
expenditures The efficiency of sales force advertising sales promotion and distribution will be moni-
tored
Strategic control
The purpose of strategic control is to examine whether Raol Guest House is pursuing its best opportunities
with respect to markets products and channels The following marketing tools will be used
marketing effectiveness rating instrument
marketing audit
marketing excellence review
company ethical and social responsibility review
20
REFERENCES
BELCH GE AND BELCH MA 2007 Advertising and promotion an integrated marketing communi-
cation perspective In IrwinMcGraw Hill 7th ed Boston Massachusetts 45
FERREL O C and HARTLINEMD 2008 Marketing Strategy Mason Thomson Higher Education
KOEGEL K 2010 ldquoBuilding Brands Onlinerdquo Ad Age Insights October 11
KOTLER P ANG SH LEONG SM and TAN CT 1999 Marketing Management An AsianPer-
spective 2nd Ed Prentice Hall
LANCASTER G AND REYNOLDS P 2005Management of Marketing Burlington Elsevier Butter-
worth ndash Heinemann
WEBSITES httpsquizletcom30731376casino-management-exam-2-flash-cards
httpfacultyjwuedupbagdanHOSP3050worksheetsch14_worksheetdoc
httpfacultyjwuedupbagdanHOSP3050worksheetsCHAPTER2014doc
13
Price
Price is the value that is placed on something Price is an indispensable element in the marketing mix since
it generated revenue and it is the only basis of recovering the costs and profitsZeithaml ( 1998 ) claimed
that the customers will think whether they received the value of money or before they decide to return the
purchase from the service provider Raol Guest House can adopt a seasonal pricing where the price paid for
a particular service can be during a certain time or period only or even price flexibility also can be em-
braced which is an unstable amount that can be paid for the same services by two different customers or it
can be adjustable price for different customers with the same service depending on the customer relation-
ship ( Keyes 2010104)
Physical Evidence
This factor refers to the ability and environment in which the service will be delivered For example the
interior and exterior decoration its furnishing lights Moreover Raol Guest House will have its own bro-
chures will be available for its customers This service scope includes three physical environment dimen-
sions that represent the relation between services and environment namely
1Environmental conditions such as temperaturesoundsmell
2Space and functions such as mapequipementdecoration
3Signssymbols and artefacts such as decoration style
The more intangible the service the more important it is to make the service around it tangible The physi-
cal evidence serves as a visual metaphor of what the company represents what services it facilitates and
the relations between customers and employees
People
All the staff being employed at Raol Guest House will be the locals since they are more acquainted with
the local tastes The personnel will be trained at a regular basis so as to keep them updated and also to be
able to meet up the customers‟ expectations In this way Raol Guest House will be able to bdquoadd value‟ to
its service through its employees Also the employees will be able to have a good clientele with the cus-
tomers In this way the staff will learn about the guests‟ likes and dislikes thus with this knowledge the
personnel can provide an improved experience to the tourists who would lead to an increased in the profita-
bility margin The resources that Raol Guest House has are its workers from waiter to the General Manag-
er each of them is recruited according to skills qualifications and work experience They are recruited
from Sir Gaeumltan Duval Hotel School Moreover Raol Guest House also encourages continuous training
which will help the employees to create innovate and communicate effectively
14
Process
A process is a flow of activities At Raol Guest House the process is simple since it operated at a small
scale The process is more coordinated according to the needs of the customers
15
Place
Place refers to the physical and virtual environment ambiance staff and activities and at the point of ser-
vice offering The atmosphere and the physical environment are the specific factors that each guest house
getsAccessibility is a critical element of place as it represents the extent to which markets and destinations
are connected (Weaver and Oppermann 2000) The location where Raol Guest House is situated is a highly
tourist attraction The guest house has 35 standard rooms are categorized into 3 groups-(Sea view Moun-
tain View and Road view)
Promotion
Promotion has got a vital role in promoting a destinationit enables to communicate with individual
groups organisations to directly or indirectly facilitate exchange by informing and persuading the different
market segments to welcome the choice of the destination being promoted
A successful promotion strategy is devised by having a push and pull promotion
According to Kotler (2001 pg531)
ldquoA push strategy involves pushing the product through distribution channels to final consumers The prod-
uct directs it marketing activities (personnel selling and trade promotion) toward channel members to in-
clude them to carry the product and to promote it to final consumers Using a pull strategy the producer
directs its marketing activities (primarily advertising and consumer promotions) towards final consumers to
induce them buy the productrdquo
Push strategy is also known as ldquotaking the product to the consumer ldquo The push promotional strategy in-
volves taking the leisure product directly to the customer This can be achieved by making use of any
means and the final aim is to ensure that the customer is aware of the guesthouse‟s name providing the lei-
sure activity at the point of purchase One example of the push promotional strategy is the point of sale
displays in the guesthouse lobby
Pull strategy is also known as ldquoGetting the customer to come to yourdquo The pull strategy is to motivate the
tourists in such a way that they are themselves encouraged to come and seek leisure facilities in the guest-
house One example of the pull strategy is advertising and mass media promotion
According to Kotler (2001) there are five strategy promotional mix they are
Advertising
Advertising is any form of non-personal communication from an identified sponsor about the organization
and its services using the media to influence a target market (Blech amp Blech 1998 Wells Burnett amp Mori-
aty 1998 Zikmund amp D‟amico 1996) This is to inform potential customers about the products that the
organization is offering and to persuade them to buy it Some examples of advertising can be yellow pages
local newspapers radio trade journals exhibitions and websites
16
Sales promotion
It is providing the customers with the basic service adding further appealing packages to it This can help to
achieve customer loyalty and as the same time attract new customers
Public Relations
Public Relations (PR) are defined by the British Institute of Public Relations as the planned and sustained
effort to establish and maintain goodwill between an organisation and its public Public Relations are ex-
tensively used in the tourism industry as a way of communicating with potential customers
Public Relations can also be defined as any group that has actual or potential interest on a company‟s abil-
ity to achieve its objectives (Kotler 2000)
PR is concerned with a number of marketing tasks These include the following
Building or maintaining image
Supporting the other communication activities
Handling problems and issues reinforcing position
Influencing specific publics
Direct Marketing
Direct marketing is to carry out a market research from time to time to know about the exact needs and
wants of the customers and to cater for them This component of the promotional mix does not use the tra-
ditional formal channels of advertising instead it is done through fliers catalogue distribution and promo-
tional letters
Personal Selling
Personal selling is to communicate orally with a potential customer of the leisure activity with the intention
to make a sale This is the most effective form of promotion as the customer is able to get the exact service
and information that she is expecting
17
STRATEGIC PLANNING APPROACHES
The Productmarket opportunity matrix (Ansoff Matrix) has been used to show strategic planning approach
that the company will adopt
Market Penetration
An organisation pursuing a market penetration strategy is aiming to sell more of its existing products in ex-
isting markets To support a market penetration strategy an organisation must make sure that it maintains
and builds the competences that are relevant to the particular market and that it has the relevant capacity to
meet higher levels of demand Raol Guest House can make use of the following strategies make use of ag-
gressive Make use of aggressive advertisement television radio newspapers health conscious magazines
and internet Build customer loyalty by providing discounts on cumulative purchases Offer discount cou-
pon for old customers
Productservice Development
This strategy involves the organisation operating in its existing markets and developing innovative or modi-
fied versions of its existing products to appeal to those markets For an effective product development
strategy an organisation must either be able to build on its existing competences or acquire new ones but it
does allow the organisation to exploit its existing knowledge of its customersRaol Guest House can Devel-
op new types of services like Spa
18
Market Development
This strategy entails expanding into new markets with existing products which are at the most only
slightly modified for the new market These may be new markets geographically new market segments
or new uses for products Whatever the market this approach to growth depends upon the existence of
new consumer groups who are willing and able to buy the existing product The company can look for
international markets like the European Countries enter new market segments market through Social
media (eg Facebook)
Diversification
Diversification involves the organisation moving into new markets with new products Diversification
may become necessary when none of the alternative mechanisms for generating growth are feasible and
is generally thought to be the more risky route to growth But for Raol Guest House for the time being it
can concentrate on the three above strategies since they carry lower risks as the organisation has some
experience in it By contrast the fourth strategy - diversification is much more risky because the organi-
sation is moving into areas in which it has little or no experience As a consequence the instances of
pure diversification are rare When diversification is undertaken the risks can be reduced by concentrat-
ing on either familiar markets or familiar technologies Moving into new markets with products which
require new technologies constitutes the riskiest and also the rarest form of diversification In the long-
runRaol Guest House can opt to diversify
CONTROLS AND EVALAUTION
Implementation
The marketing manager will coordinate the marketing activities that are crucial in achieving the finan-
cial and marketing objectives of the company Raol GuestHouse requires the marketing department to
maintain its professional integrity looking out for its marketing goals and implementing the marketing
programmes as best fits its strategy
Controls
To maximise the return on a marketing plan there need to be controls in place to monitor the plans pro-
gress Control is not a singular thing but a host of tools for making sure that the company is on track
Raol GuestHouse will be using four types of controls to monitor the service marketing plan progress
Annual plan control
The purpose of the annual plan control is to ensure that Raol GuestHouse achieves the sales profits and
other goals established in the marketing plan
Sales analysis - Actual sales will be compared to sales targets and budgets and an analysis of any vari-
ance between the two will be carefully examined
Market share analysis - Raol Guest House will be using overall market share served market share and
19
Customer attitude tracking - Raol Guest House will monitor customer feedback through polls and surveys
The company will carry out customer surveys by phone or in person and host online polls to gauge what
customers feel about the Services The company will also implement a customer complaint and suggestion
scheme to increase customer satisfaction level
Sales-to-expense ratios - Sales-to-expense ratios will be used to determine whether Raol Guest House is
spending too much or too little on marketing the Services in order to achieve its sales goals The following
sales-to-expense ratios will be used
advertising to sales
sales force size to sales
sales promotion to sales
marketing research to sales
Profitability control
Profitability control will help Raol Guest House to evaluate and improve spending and examine whether it
is making profits or losses The following measures will be taken to control its profitability
Sales revenue and costs from the previous year will be compared to that of the current year
Actual and estimated profits will also be compared to determine differences
A cost control system will be developed to maintain costs that remain within the specified budget
Efficiency control
Efficiency control will be used to evaluate and improve the spending efficiency and impact of marketing
expenditures The efficiency of sales force advertising sales promotion and distribution will be moni-
tored
Strategic control
The purpose of strategic control is to examine whether Raol Guest House is pursuing its best opportunities
with respect to markets products and channels The following marketing tools will be used
marketing effectiveness rating instrument
marketing audit
marketing excellence review
company ethical and social responsibility review
20
REFERENCES
BELCH GE AND BELCH MA 2007 Advertising and promotion an integrated marketing communi-
cation perspective In IrwinMcGraw Hill 7th ed Boston Massachusetts 45
FERREL O C and HARTLINEMD 2008 Marketing Strategy Mason Thomson Higher Education
KOEGEL K 2010 ldquoBuilding Brands Onlinerdquo Ad Age Insights October 11
KOTLER P ANG SH LEONG SM and TAN CT 1999 Marketing Management An AsianPer-
spective 2nd Ed Prentice Hall
LANCASTER G AND REYNOLDS P 2005Management of Marketing Burlington Elsevier Butter-
worth ndash Heinemann
WEBSITES httpsquizletcom30731376casino-management-exam-2-flash-cards
httpfacultyjwuedupbagdanHOSP3050worksheetsch14_worksheetdoc
httpfacultyjwuedupbagdanHOSP3050worksheetsCHAPTER2014doc
14
Process
A process is a flow of activities At Raol Guest House the process is simple since it operated at a small
scale The process is more coordinated according to the needs of the customers
15
Place
Place refers to the physical and virtual environment ambiance staff and activities and at the point of ser-
vice offering The atmosphere and the physical environment are the specific factors that each guest house
getsAccessibility is a critical element of place as it represents the extent to which markets and destinations
are connected (Weaver and Oppermann 2000) The location where Raol Guest House is situated is a highly
tourist attraction The guest house has 35 standard rooms are categorized into 3 groups-(Sea view Moun-
tain View and Road view)
Promotion
Promotion has got a vital role in promoting a destinationit enables to communicate with individual
groups organisations to directly or indirectly facilitate exchange by informing and persuading the different
market segments to welcome the choice of the destination being promoted
A successful promotion strategy is devised by having a push and pull promotion
According to Kotler (2001 pg531)
ldquoA push strategy involves pushing the product through distribution channels to final consumers The prod-
uct directs it marketing activities (personnel selling and trade promotion) toward channel members to in-
clude them to carry the product and to promote it to final consumers Using a pull strategy the producer
directs its marketing activities (primarily advertising and consumer promotions) towards final consumers to
induce them buy the productrdquo
Push strategy is also known as ldquotaking the product to the consumer ldquo The push promotional strategy in-
volves taking the leisure product directly to the customer This can be achieved by making use of any
means and the final aim is to ensure that the customer is aware of the guesthouse‟s name providing the lei-
sure activity at the point of purchase One example of the push promotional strategy is the point of sale
displays in the guesthouse lobby
Pull strategy is also known as ldquoGetting the customer to come to yourdquo The pull strategy is to motivate the
tourists in such a way that they are themselves encouraged to come and seek leisure facilities in the guest-
house One example of the pull strategy is advertising and mass media promotion
According to Kotler (2001) there are five strategy promotional mix they are
Advertising
Advertising is any form of non-personal communication from an identified sponsor about the organization
and its services using the media to influence a target market (Blech amp Blech 1998 Wells Burnett amp Mori-
aty 1998 Zikmund amp D‟amico 1996) This is to inform potential customers about the products that the
organization is offering and to persuade them to buy it Some examples of advertising can be yellow pages
local newspapers radio trade journals exhibitions and websites
16
Sales promotion
It is providing the customers with the basic service adding further appealing packages to it This can help to
achieve customer loyalty and as the same time attract new customers
Public Relations
Public Relations (PR) are defined by the British Institute of Public Relations as the planned and sustained
effort to establish and maintain goodwill between an organisation and its public Public Relations are ex-
tensively used in the tourism industry as a way of communicating with potential customers
Public Relations can also be defined as any group that has actual or potential interest on a company‟s abil-
ity to achieve its objectives (Kotler 2000)
PR is concerned with a number of marketing tasks These include the following
Building or maintaining image
Supporting the other communication activities
Handling problems and issues reinforcing position
Influencing specific publics
Direct Marketing
Direct marketing is to carry out a market research from time to time to know about the exact needs and
wants of the customers and to cater for them This component of the promotional mix does not use the tra-
ditional formal channels of advertising instead it is done through fliers catalogue distribution and promo-
tional letters
Personal Selling
Personal selling is to communicate orally with a potential customer of the leisure activity with the intention
to make a sale This is the most effective form of promotion as the customer is able to get the exact service
and information that she is expecting
17
STRATEGIC PLANNING APPROACHES
The Productmarket opportunity matrix (Ansoff Matrix) has been used to show strategic planning approach
that the company will adopt
Market Penetration
An organisation pursuing a market penetration strategy is aiming to sell more of its existing products in ex-
isting markets To support a market penetration strategy an organisation must make sure that it maintains
and builds the competences that are relevant to the particular market and that it has the relevant capacity to
meet higher levels of demand Raol Guest House can make use of the following strategies make use of ag-
gressive Make use of aggressive advertisement television radio newspapers health conscious magazines
and internet Build customer loyalty by providing discounts on cumulative purchases Offer discount cou-
pon for old customers
Productservice Development
This strategy involves the organisation operating in its existing markets and developing innovative or modi-
fied versions of its existing products to appeal to those markets For an effective product development
strategy an organisation must either be able to build on its existing competences or acquire new ones but it
does allow the organisation to exploit its existing knowledge of its customersRaol Guest House can Devel-
op new types of services like Spa
18
Market Development
This strategy entails expanding into new markets with existing products which are at the most only
slightly modified for the new market These may be new markets geographically new market segments
or new uses for products Whatever the market this approach to growth depends upon the existence of
new consumer groups who are willing and able to buy the existing product The company can look for
international markets like the European Countries enter new market segments market through Social
media (eg Facebook)
Diversification
Diversification involves the organisation moving into new markets with new products Diversification
may become necessary when none of the alternative mechanisms for generating growth are feasible and
is generally thought to be the more risky route to growth But for Raol Guest House for the time being it
can concentrate on the three above strategies since they carry lower risks as the organisation has some
experience in it By contrast the fourth strategy - diversification is much more risky because the organi-
sation is moving into areas in which it has little or no experience As a consequence the instances of
pure diversification are rare When diversification is undertaken the risks can be reduced by concentrat-
ing on either familiar markets or familiar technologies Moving into new markets with products which
require new technologies constitutes the riskiest and also the rarest form of diversification In the long-
runRaol Guest House can opt to diversify
CONTROLS AND EVALAUTION
Implementation
The marketing manager will coordinate the marketing activities that are crucial in achieving the finan-
cial and marketing objectives of the company Raol GuestHouse requires the marketing department to
maintain its professional integrity looking out for its marketing goals and implementing the marketing
programmes as best fits its strategy
Controls
To maximise the return on a marketing plan there need to be controls in place to monitor the plans pro-
gress Control is not a singular thing but a host of tools for making sure that the company is on track
Raol GuestHouse will be using four types of controls to monitor the service marketing plan progress
Annual plan control
The purpose of the annual plan control is to ensure that Raol GuestHouse achieves the sales profits and
other goals established in the marketing plan
Sales analysis - Actual sales will be compared to sales targets and budgets and an analysis of any vari-
ance between the two will be carefully examined
Market share analysis - Raol Guest House will be using overall market share served market share and
19
Customer attitude tracking - Raol Guest House will monitor customer feedback through polls and surveys
The company will carry out customer surveys by phone or in person and host online polls to gauge what
customers feel about the Services The company will also implement a customer complaint and suggestion
scheme to increase customer satisfaction level
Sales-to-expense ratios - Sales-to-expense ratios will be used to determine whether Raol Guest House is
spending too much or too little on marketing the Services in order to achieve its sales goals The following
sales-to-expense ratios will be used
advertising to sales
sales force size to sales
sales promotion to sales
marketing research to sales
Profitability control
Profitability control will help Raol Guest House to evaluate and improve spending and examine whether it
is making profits or losses The following measures will be taken to control its profitability
Sales revenue and costs from the previous year will be compared to that of the current year
Actual and estimated profits will also be compared to determine differences
A cost control system will be developed to maintain costs that remain within the specified budget
Efficiency control
Efficiency control will be used to evaluate and improve the spending efficiency and impact of marketing
expenditures The efficiency of sales force advertising sales promotion and distribution will be moni-
tored
Strategic control
The purpose of strategic control is to examine whether Raol Guest House is pursuing its best opportunities
with respect to markets products and channels The following marketing tools will be used
marketing effectiveness rating instrument
marketing audit
marketing excellence review
company ethical and social responsibility review
20
REFERENCES
BELCH GE AND BELCH MA 2007 Advertising and promotion an integrated marketing communi-
cation perspective In IrwinMcGraw Hill 7th ed Boston Massachusetts 45
FERREL O C and HARTLINEMD 2008 Marketing Strategy Mason Thomson Higher Education
KOEGEL K 2010 ldquoBuilding Brands Onlinerdquo Ad Age Insights October 11
KOTLER P ANG SH LEONG SM and TAN CT 1999 Marketing Management An AsianPer-
spective 2nd Ed Prentice Hall
LANCASTER G AND REYNOLDS P 2005Management of Marketing Burlington Elsevier Butter-
worth ndash Heinemann
WEBSITES httpsquizletcom30731376casino-management-exam-2-flash-cards
httpfacultyjwuedupbagdanHOSP3050worksheetsch14_worksheetdoc
httpfacultyjwuedupbagdanHOSP3050worksheetsCHAPTER2014doc
15
Place
Place refers to the physical and virtual environment ambiance staff and activities and at the point of ser-
vice offering The atmosphere and the physical environment are the specific factors that each guest house
getsAccessibility is a critical element of place as it represents the extent to which markets and destinations
are connected (Weaver and Oppermann 2000) The location where Raol Guest House is situated is a highly
tourist attraction The guest house has 35 standard rooms are categorized into 3 groups-(Sea view Moun-
tain View and Road view)
Promotion
Promotion has got a vital role in promoting a destinationit enables to communicate with individual
groups organisations to directly or indirectly facilitate exchange by informing and persuading the different
market segments to welcome the choice of the destination being promoted
A successful promotion strategy is devised by having a push and pull promotion
According to Kotler (2001 pg531)
ldquoA push strategy involves pushing the product through distribution channels to final consumers The prod-
uct directs it marketing activities (personnel selling and trade promotion) toward channel members to in-
clude them to carry the product and to promote it to final consumers Using a pull strategy the producer
directs its marketing activities (primarily advertising and consumer promotions) towards final consumers to
induce them buy the productrdquo
Push strategy is also known as ldquotaking the product to the consumer ldquo The push promotional strategy in-
volves taking the leisure product directly to the customer This can be achieved by making use of any
means and the final aim is to ensure that the customer is aware of the guesthouse‟s name providing the lei-
sure activity at the point of purchase One example of the push promotional strategy is the point of sale
displays in the guesthouse lobby
Pull strategy is also known as ldquoGetting the customer to come to yourdquo The pull strategy is to motivate the
tourists in such a way that they are themselves encouraged to come and seek leisure facilities in the guest-
house One example of the pull strategy is advertising and mass media promotion
According to Kotler (2001) there are five strategy promotional mix they are
Advertising
Advertising is any form of non-personal communication from an identified sponsor about the organization
and its services using the media to influence a target market (Blech amp Blech 1998 Wells Burnett amp Mori-
aty 1998 Zikmund amp D‟amico 1996) This is to inform potential customers about the products that the
organization is offering and to persuade them to buy it Some examples of advertising can be yellow pages
local newspapers radio trade journals exhibitions and websites
16
Sales promotion
It is providing the customers with the basic service adding further appealing packages to it This can help to
achieve customer loyalty and as the same time attract new customers
Public Relations
Public Relations (PR) are defined by the British Institute of Public Relations as the planned and sustained
effort to establish and maintain goodwill between an organisation and its public Public Relations are ex-
tensively used in the tourism industry as a way of communicating with potential customers
Public Relations can also be defined as any group that has actual or potential interest on a company‟s abil-
ity to achieve its objectives (Kotler 2000)
PR is concerned with a number of marketing tasks These include the following
Building or maintaining image
Supporting the other communication activities
Handling problems and issues reinforcing position
Influencing specific publics
Direct Marketing
Direct marketing is to carry out a market research from time to time to know about the exact needs and
wants of the customers and to cater for them This component of the promotional mix does not use the tra-
ditional formal channels of advertising instead it is done through fliers catalogue distribution and promo-
tional letters
Personal Selling
Personal selling is to communicate orally with a potential customer of the leisure activity with the intention
to make a sale This is the most effective form of promotion as the customer is able to get the exact service
and information that she is expecting
17
STRATEGIC PLANNING APPROACHES
The Productmarket opportunity matrix (Ansoff Matrix) has been used to show strategic planning approach
that the company will adopt
Market Penetration
An organisation pursuing a market penetration strategy is aiming to sell more of its existing products in ex-
isting markets To support a market penetration strategy an organisation must make sure that it maintains
and builds the competences that are relevant to the particular market and that it has the relevant capacity to
meet higher levels of demand Raol Guest House can make use of the following strategies make use of ag-
gressive Make use of aggressive advertisement television radio newspapers health conscious magazines
and internet Build customer loyalty by providing discounts on cumulative purchases Offer discount cou-
pon for old customers
Productservice Development
This strategy involves the organisation operating in its existing markets and developing innovative or modi-
fied versions of its existing products to appeal to those markets For an effective product development
strategy an organisation must either be able to build on its existing competences or acquire new ones but it
does allow the organisation to exploit its existing knowledge of its customersRaol Guest House can Devel-
op new types of services like Spa
18
Market Development
This strategy entails expanding into new markets with existing products which are at the most only
slightly modified for the new market These may be new markets geographically new market segments
or new uses for products Whatever the market this approach to growth depends upon the existence of
new consumer groups who are willing and able to buy the existing product The company can look for
international markets like the European Countries enter new market segments market through Social
media (eg Facebook)
Diversification
Diversification involves the organisation moving into new markets with new products Diversification
may become necessary when none of the alternative mechanisms for generating growth are feasible and
is generally thought to be the more risky route to growth But for Raol Guest House for the time being it
can concentrate on the three above strategies since they carry lower risks as the organisation has some
experience in it By contrast the fourth strategy - diversification is much more risky because the organi-
sation is moving into areas in which it has little or no experience As a consequence the instances of
pure diversification are rare When diversification is undertaken the risks can be reduced by concentrat-
ing on either familiar markets or familiar technologies Moving into new markets with products which
require new technologies constitutes the riskiest and also the rarest form of diversification In the long-
runRaol Guest House can opt to diversify
CONTROLS AND EVALAUTION
Implementation
The marketing manager will coordinate the marketing activities that are crucial in achieving the finan-
cial and marketing objectives of the company Raol GuestHouse requires the marketing department to
maintain its professional integrity looking out for its marketing goals and implementing the marketing
programmes as best fits its strategy
Controls
To maximise the return on a marketing plan there need to be controls in place to monitor the plans pro-
gress Control is not a singular thing but a host of tools for making sure that the company is on track
Raol GuestHouse will be using four types of controls to monitor the service marketing plan progress
Annual plan control
The purpose of the annual plan control is to ensure that Raol GuestHouse achieves the sales profits and
other goals established in the marketing plan
Sales analysis - Actual sales will be compared to sales targets and budgets and an analysis of any vari-
ance between the two will be carefully examined
Market share analysis - Raol Guest House will be using overall market share served market share and
19
Customer attitude tracking - Raol Guest House will monitor customer feedback through polls and surveys
The company will carry out customer surveys by phone or in person and host online polls to gauge what
customers feel about the Services The company will also implement a customer complaint and suggestion
scheme to increase customer satisfaction level
Sales-to-expense ratios - Sales-to-expense ratios will be used to determine whether Raol Guest House is
spending too much or too little on marketing the Services in order to achieve its sales goals The following
sales-to-expense ratios will be used
advertising to sales
sales force size to sales
sales promotion to sales
marketing research to sales
Profitability control
Profitability control will help Raol Guest House to evaluate and improve spending and examine whether it
is making profits or losses The following measures will be taken to control its profitability
Sales revenue and costs from the previous year will be compared to that of the current year
Actual and estimated profits will also be compared to determine differences
A cost control system will be developed to maintain costs that remain within the specified budget
Efficiency control
Efficiency control will be used to evaluate and improve the spending efficiency and impact of marketing
expenditures The efficiency of sales force advertising sales promotion and distribution will be moni-
tored
Strategic control
The purpose of strategic control is to examine whether Raol Guest House is pursuing its best opportunities
with respect to markets products and channels The following marketing tools will be used
marketing effectiveness rating instrument
marketing audit
marketing excellence review
company ethical and social responsibility review
20
REFERENCES
BELCH GE AND BELCH MA 2007 Advertising and promotion an integrated marketing communi-
cation perspective In IrwinMcGraw Hill 7th ed Boston Massachusetts 45
FERREL O C and HARTLINEMD 2008 Marketing Strategy Mason Thomson Higher Education
KOEGEL K 2010 ldquoBuilding Brands Onlinerdquo Ad Age Insights October 11
KOTLER P ANG SH LEONG SM and TAN CT 1999 Marketing Management An AsianPer-
spective 2nd Ed Prentice Hall
LANCASTER G AND REYNOLDS P 2005Management of Marketing Burlington Elsevier Butter-
worth ndash Heinemann
WEBSITES httpsquizletcom30731376casino-management-exam-2-flash-cards
httpfacultyjwuedupbagdanHOSP3050worksheetsch14_worksheetdoc
httpfacultyjwuedupbagdanHOSP3050worksheetsCHAPTER2014doc
16
Sales promotion
It is providing the customers with the basic service adding further appealing packages to it This can help to
achieve customer loyalty and as the same time attract new customers
Public Relations
Public Relations (PR) are defined by the British Institute of Public Relations as the planned and sustained
effort to establish and maintain goodwill between an organisation and its public Public Relations are ex-
tensively used in the tourism industry as a way of communicating with potential customers
Public Relations can also be defined as any group that has actual or potential interest on a company‟s abil-
ity to achieve its objectives (Kotler 2000)
PR is concerned with a number of marketing tasks These include the following
Building or maintaining image
Supporting the other communication activities
Handling problems and issues reinforcing position
Influencing specific publics
Direct Marketing
Direct marketing is to carry out a market research from time to time to know about the exact needs and
wants of the customers and to cater for them This component of the promotional mix does not use the tra-
ditional formal channels of advertising instead it is done through fliers catalogue distribution and promo-
tional letters
Personal Selling
Personal selling is to communicate orally with a potential customer of the leisure activity with the intention
to make a sale This is the most effective form of promotion as the customer is able to get the exact service
and information that she is expecting
17
STRATEGIC PLANNING APPROACHES
The Productmarket opportunity matrix (Ansoff Matrix) has been used to show strategic planning approach
that the company will adopt
Market Penetration
An organisation pursuing a market penetration strategy is aiming to sell more of its existing products in ex-
isting markets To support a market penetration strategy an organisation must make sure that it maintains
and builds the competences that are relevant to the particular market and that it has the relevant capacity to
meet higher levels of demand Raol Guest House can make use of the following strategies make use of ag-
gressive Make use of aggressive advertisement television radio newspapers health conscious magazines
and internet Build customer loyalty by providing discounts on cumulative purchases Offer discount cou-
pon for old customers
Productservice Development
This strategy involves the organisation operating in its existing markets and developing innovative or modi-
fied versions of its existing products to appeal to those markets For an effective product development
strategy an organisation must either be able to build on its existing competences or acquire new ones but it
does allow the organisation to exploit its existing knowledge of its customersRaol Guest House can Devel-
op new types of services like Spa
18
Market Development
This strategy entails expanding into new markets with existing products which are at the most only
slightly modified for the new market These may be new markets geographically new market segments
or new uses for products Whatever the market this approach to growth depends upon the existence of
new consumer groups who are willing and able to buy the existing product The company can look for
international markets like the European Countries enter new market segments market through Social
media (eg Facebook)
Diversification
Diversification involves the organisation moving into new markets with new products Diversification
may become necessary when none of the alternative mechanisms for generating growth are feasible and
is generally thought to be the more risky route to growth But for Raol Guest House for the time being it
can concentrate on the three above strategies since they carry lower risks as the organisation has some
experience in it By contrast the fourth strategy - diversification is much more risky because the organi-
sation is moving into areas in which it has little or no experience As a consequence the instances of
pure diversification are rare When diversification is undertaken the risks can be reduced by concentrat-
ing on either familiar markets or familiar technologies Moving into new markets with products which
require new technologies constitutes the riskiest and also the rarest form of diversification In the long-
runRaol Guest House can opt to diversify
CONTROLS AND EVALAUTION
Implementation
The marketing manager will coordinate the marketing activities that are crucial in achieving the finan-
cial and marketing objectives of the company Raol GuestHouse requires the marketing department to
maintain its professional integrity looking out for its marketing goals and implementing the marketing
programmes as best fits its strategy
Controls
To maximise the return on a marketing plan there need to be controls in place to monitor the plans pro-
gress Control is not a singular thing but a host of tools for making sure that the company is on track
Raol GuestHouse will be using four types of controls to monitor the service marketing plan progress
Annual plan control
The purpose of the annual plan control is to ensure that Raol GuestHouse achieves the sales profits and
other goals established in the marketing plan
Sales analysis - Actual sales will be compared to sales targets and budgets and an analysis of any vari-
ance between the two will be carefully examined
Market share analysis - Raol Guest House will be using overall market share served market share and
19
Customer attitude tracking - Raol Guest House will monitor customer feedback through polls and surveys
The company will carry out customer surveys by phone or in person and host online polls to gauge what
customers feel about the Services The company will also implement a customer complaint and suggestion
scheme to increase customer satisfaction level
Sales-to-expense ratios - Sales-to-expense ratios will be used to determine whether Raol Guest House is
spending too much or too little on marketing the Services in order to achieve its sales goals The following
sales-to-expense ratios will be used
advertising to sales
sales force size to sales
sales promotion to sales
marketing research to sales
Profitability control
Profitability control will help Raol Guest House to evaluate and improve spending and examine whether it
is making profits or losses The following measures will be taken to control its profitability
Sales revenue and costs from the previous year will be compared to that of the current year
Actual and estimated profits will also be compared to determine differences
A cost control system will be developed to maintain costs that remain within the specified budget
Efficiency control
Efficiency control will be used to evaluate and improve the spending efficiency and impact of marketing
expenditures The efficiency of sales force advertising sales promotion and distribution will be moni-
tored
Strategic control
The purpose of strategic control is to examine whether Raol Guest House is pursuing its best opportunities
with respect to markets products and channels The following marketing tools will be used
marketing effectiveness rating instrument
marketing audit
marketing excellence review
company ethical and social responsibility review
20
REFERENCES
BELCH GE AND BELCH MA 2007 Advertising and promotion an integrated marketing communi-
cation perspective In IrwinMcGraw Hill 7th ed Boston Massachusetts 45
FERREL O C and HARTLINEMD 2008 Marketing Strategy Mason Thomson Higher Education
KOEGEL K 2010 ldquoBuilding Brands Onlinerdquo Ad Age Insights October 11
KOTLER P ANG SH LEONG SM and TAN CT 1999 Marketing Management An AsianPer-
spective 2nd Ed Prentice Hall
LANCASTER G AND REYNOLDS P 2005Management of Marketing Burlington Elsevier Butter-
worth ndash Heinemann
WEBSITES httpsquizletcom30731376casino-management-exam-2-flash-cards
httpfacultyjwuedupbagdanHOSP3050worksheetsch14_worksheetdoc
httpfacultyjwuedupbagdanHOSP3050worksheetsCHAPTER2014doc
17
STRATEGIC PLANNING APPROACHES
The Productmarket opportunity matrix (Ansoff Matrix) has been used to show strategic planning approach
that the company will adopt
Market Penetration
An organisation pursuing a market penetration strategy is aiming to sell more of its existing products in ex-
isting markets To support a market penetration strategy an organisation must make sure that it maintains
and builds the competences that are relevant to the particular market and that it has the relevant capacity to
meet higher levels of demand Raol Guest House can make use of the following strategies make use of ag-
gressive Make use of aggressive advertisement television radio newspapers health conscious magazines
and internet Build customer loyalty by providing discounts on cumulative purchases Offer discount cou-
pon for old customers
Productservice Development
This strategy involves the organisation operating in its existing markets and developing innovative or modi-
fied versions of its existing products to appeal to those markets For an effective product development
strategy an organisation must either be able to build on its existing competences or acquire new ones but it
does allow the organisation to exploit its existing knowledge of its customersRaol Guest House can Devel-
op new types of services like Spa
18
Market Development
This strategy entails expanding into new markets with existing products which are at the most only
slightly modified for the new market These may be new markets geographically new market segments
or new uses for products Whatever the market this approach to growth depends upon the existence of
new consumer groups who are willing and able to buy the existing product The company can look for
international markets like the European Countries enter new market segments market through Social
media (eg Facebook)
Diversification
Diversification involves the organisation moving into new markets with new products Diversification
may become necessary when none of the alternative mechanisms for generating growth are feasible and
is generally thought to be the more risky route to growth But for Raol Guest House for the time being it
can concentrate on the three above strategies since they carry lower risks as the organisation has some
experience in it By contrast the fourth strategy - diversification is much more risky because the organi-
sation is moving into areas in which it has little or no experience As a consequence the instances of
pure diversification are rare When diversification is undertaken the risks can be reduced by concentrat-
ing on either familiar markets or familiar technologies Moving into new markets with products which
require new technologies constitutes the riskiest and also the rarest form of diversification In the long-
runRaol Guest House can opt to diversify
CONTROLS AND EVALAUTION
Implementation
The marketing manager will coordinate the marketing activities that are crucial in achieving the finan-
cial and marketing objectives of the company Raol GuestHouse requires the marketing department to
maintain its professional integrity looking out for its marketing goals and implementing the marketing
programmes as best fits its strategy
Controls
To maximise the return on a marketing plan there need to be controls in place to monitor the plans pro-
gress Control is not a singular thing but a host of tools for making sure that the company is on track
Raol GuestHouse will be using four types of controls to monitor the service marketing plan progress
Annual plan control
The purpose of the annual plan control is to ensure that Raol GuestHouse achieves the sales profits and
other goals established in the marketing plan
Sales analysis - Actual sales will be compared to sales targets and budgets and an analysis of any vari-
ance between the two will be carefully examined
Market share analysis - Raol Guest House will be using overall market share served market share and
19
Customer attitude tracking - Raol Guest House will monitor customer feedback through polls and surveys
The company will carry out customer surveys by phone or in person and host online polls to gauge what
customers feel about the Services The company will also implement a customer complaint and suggestion
scheme to increase customer satisfaction level
Sales-to-expense ratios - Sales-to-expense ratios will be used to determine whether Raol Guest House is
spending too much or too little on marketing the Services in order to achieve its sales goals The following
sales-to-expense ratios will be used
advertising to sales
sales force size to sales
sales promotion to sales
marketing research to sales
Profitability control
Profitability control will help Raol Guest House to evaluate and improve spending and examine whether it
is making profits or losses The following measures will be taken to control its profitability
Sales revenue and costs from the previous year will be compared to that of the current year
Actual and estimated profits will also be compared to determine differences
A cost control system will be developed to maintain costs that remain within the specified budget
Efficiency control
Efficiency control will be used to evaluate and improve the spending efficiency and impact of marketing
expenditures The efficiency of sales force advertising sales promotion and distribution will be moni-
tored
Strategic control
The purpose of strategic control is to examine whether Raol Guest House is pursuing its best opportunities
with respect to markets products and channels The following marketing tools will be used
marketing effectiveness rating instrument
marketing audit
marketing excellence review
company ethical and social responsibility review
20
REFERENCES
BELCH GE AND BELCH MA 2007 Advertising and promotion an integrated marketing communi-
cation perspective In IrwinMcGraw Hill 7th ed Boston Massachusetts 45
FERREL O C and HARTLINEMD 2008 Marketing Strategy Mason Thomson Higher Education
KOEGEL K 2010 ldquoBuilding Brands Onlinerdquo Ad Age Insights October 11
KOTLER P ANG SH LEONG SM and TAN CT 1999 Marketing Management An AsianPer-
spective 2nd Ed Prentice Hall
LANCASTER G AND REYNOLDS P 2005Management of Marketing Burlington Elsevier Butter-
worth ndash Heinemann
WEBSITES httpsquizletcom30731376casino-management-exam-2-flash-cards
httpfacultyjwuedupbagdanHOSP3050worksheetsch14_worksheetdoc
httpfacultyjwuedupbagdanHOSP3050worksheetsCHAPTER2014doc
18
Market Development
This strategy entails expanding into new markets with existing products which are at the most only
slightly modified for the new market These may be new markets geographically new market segments
or new uses for products Whatever the market this approach to growth depends upon the existence of
new consumer groups who are willing and able to buy the existing product The company can look for
international markets like the European Countries enter new market segments market through Social
media (eg Facebook)
Diversification
Diversification involves the organisation moving into new markets with new products Diversification
may become necessary when none of the alternative mechanisms for generating growth are feasible and
is generally thought to be the more risky route to growth But for Raol Guest House for the time being it
can concentrate on the three above strategies since they carry lower risks as the organisation has some
experience in it By contrast the fourth strategy - diversification is much more risky because the organi-
sation is moving into areas in which it has little or no experience As a consequence the instances of
pure diversification are rare When diversification is undertaken the risks can be reduced by concentrat-
ing on either familiar markets or familiar technologies Moving into new markets with products which
require new technologies constitutes the riskiest and also the rarest form of diversification In the long-
runRaol Guest House can opt to diversify
CONTROLS AND EVALAUTION
Implementation
The marketing manager will coordinate the marketing activities that are crucial in achieving the finan-
cial and marketing objectives of the company Raol GuestHouse requires the marketing department to
maintain its professional integrity looking out for its marketing goals and implementing the marketing
programmes as best fits its strategy
Controls
To maximise the return on a marketing plan there need to be controls in place to monitor the plans pro-
gress Control is not a singular thing but a host of tools for making sure that the company is on track
Raol GuestHouse will be using four types of controls to monitor the service marketing plan progress
Annual plan control
The purpose of the annual plan control is to ensure that Raol GuestHouse achieves the sales profits and
other goals established in the marketing plan
Sales analysis - Actual sales will be compared to sales targets and budgets and an analysis of any vari-
ance between the two will be carefully examined
Market share analysis - Raol Guest House will be using overall market share served market share and
19
Customer attitude tracking - Raol Guest House will monitor customer feedback through polls and surveys
The company will carry out customer surveys by phone or in person and host online polls to gauge what
customers feel about the Services The company will also implement a customer complaint and suggestion
scheme to increase customer satisfaction level
Sales-to-expense ratios - Sales-to-expense ratios will be used to determine whether Raol Guest House is
spending too much or too little on marketing the Services in order to achieve its sales goals The following
sales-to-expense ratios will be used
advertising to sales
sales force size to sales
sales promotion to sales
marketing research to sales
Profitability control
Profitability control will help Raol Guest House to evaluate and improve spending and examine whether it
is making profits or losses The following measures will be taken to control its profitability
Sales revenue and costs from the previous year will be compared to that of the current year
Actual and estimated profits will also be compared to determine differences
A cost control system will be developed to maintain costs that remain within the specified budget
Efficiency control
Efficiency control will be used to evaluate and improve the spending efficiency and impact of marketing
expenditures The efficiency of sales force advertising sales promotion and distribution will be moni-
tored
Strategic control
The purpose of strategic control is to examine whether Raol Guest House is pursuing its best opportunities
with respect to markets products and channels The following marketing tools will be used
marketing effectiveness rating instrument
marketing audit
marketing excellence review
company ethical and social responsibility review
20
REFERENCES
BELCH GE AND BELCH MA 2007 Advertising and promotion an integrated marketing communi-
cation perspective In IrwinMcGraw Hill 7th ed Boston Massachusetts 45
FERREL O C and HARTLINEMD 2008 Marketing Strategy Mason Thomson Higher Education
KOEGEL K 2010 ldquoBuilding Brands Onlinerdquo Ad Age Insights October 11
KOTLER P ANG SH LEONG SM and TAN CT 1999 Marketing Management An AsianPer-
spective 2nd Ed Prentice Hall
LANCASTER G AND REYNOLDS P 2005Management of Marketing Burlington Elsevier Butter-
worth ndash Heinemann
WEBSITES httpsquizletcom30731376casino-management-exam-2-flash-cards
httpfacultyjwuedupbagdanHOSP3050worksheetsch14_worksheetdoc
httpfacultyjwuedupbagdanHOSP3050worksheetsCHAPTER2014doc
19
Customer attitude tracking - Raol Guest House will monitor customer feedback through polls and surveys
The company will carry out customer surveys by phone or in person and host online polls to gauge what
customers feel about the Services The company will also implement a customer complaint and suggestion
scheme to increase customer satisfaction level
Sales-to-expense ratios - Sales-to-expense ratios will be used to determine whether Raol Guest House is
spending too much or too little on marketing the Services in order to achieve its sales goals The following
sales-to-expense ratios will be used
advertising to sales
sales force size to sales
sales promotion to sales
marketing research to sales
Profitability control
Profitability control will help Raol Guest House to evaluate and improve spending and examine whether it
is making profits or losses The following measures will be taken to control its profitability
Sales revenue and costs from the previous year will be compared to that of the current year
Actual and estimated profits will also be compared to determine differences
A cost control system will be developed to maintain costs that remain within the specified budget
Efficiency control
Efficiency control will be used to evaluate and improve the spending efficiency and impact of marketing
expenditures The efficiency of sales force advertising sales promotion and distribution will be moni-
tored
Strategic control
The purpose of strategic control is to examine whether Raol Guest House is pursuing its best opportunities
with respect to markets products and channels The following marketing tools will be used
marketing effectiveness rating instrument
marketing audit
marketing excellence review
company ethical and social responsibility review
20
REFERENCES
BELCH GE AND BELCH MA 2007 Advertising and promotion an integrated marketing communi-
cation perspective In IrwinMcGraw Hill 7th ed Boston Massachusetts 45
FERREL O C and HARTLINEMD 2008 Marketing Strategy Mason Thomson Higher Education
KOEGEL K 2010 ldquoBuilding Brands Onlinerdquo Ad Age Insights October 11
KOTLER P ANG SH LEONG SM and TAN CT 1999 Marketing Management An AsianPer-
spective 2nd Ed Prentice Hall
LANCASTER G AND REYNOLDS P 2005Management of Marketing Burlington Elsevier Butter-
worth ndash Heinemann
WEBSITES httpsquizletcom30731376casino-management-exam-2-flash-cards
httpfacultyjwuedupbagdanHOSP3050worksheetsch14_worksheetdoc
httpfacultyjwuedupbagdanHOSP3050worksheetsCHAPTER2014doc
20
REFERENCES
BELCH GE AND BELCH MA 2007 Advertising and promotion an integrated marketing communi-
cation perspective In IrwinMcGraw Hill 7th ed Boston Massachusetts 45
FERREL O C and HARTLINEMD 2008 Marketing Strategy Mason Thomson Higher Education
KOEGEL K 2010 ldquoBuilding Brands Onlinerdquo Ad Age Insights October 11
KOTLER P ANG SH LEONG SM and TAN CT 1999 Marketing Management An AsianPer-
spective 2nd Ed Prentice Hall
LANCASTER G AND REYNOLDS P 2005Management of Marketing Burlington Elsevier Butter-
worth ndash Heinemann
WEBSITES httpsquizletcom30731376casino-management-exam-2-flash-cards
httpfacultyjwuedupbagdanHOSP3050worksheetsch14_worksheetdoc
httpfacultyjwuedupbagdanHOSP3050worksheetsCHAPTER2014doc