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SALES & MARKETING PLAN (For 2011 – 2012)
THE IMAGERY HOTEL,
XYZ CITY, INDIA
The presented sales and marketing plan has been worked upon while covering the
theoretical knowledge gained during the duration of module. The sales and marketing plan covers only the rooms division strategy due to word count limitation (Revenue
aspects such as Food & Beverage outlets, other revenue etc are not being discussed.
!lossary at the end of appendices features the key industry specific terms used in the plan.
E!"#$%! '#r*
The "magery hotel is an established lu#ury hotel located in the $% city of "ndia. The
hotel is part of a renowned chain of hotel. The hotel has been an industry leader in the
city since its inception in ''.
The hotel follows the ob)ectives that are consistent with the company*s goals and mission
statement. "n the year +'', The "magery -otel is targeted to contribute sales revenue of"R '/0 1illion against a pro)ection of "R '2 1illion. The "magery -otel, has to
further maintain its market leadership in the city by achieving the highest Rev34R
3remium.
The marketing plan addresses following ma)or attributes5
• !rowing need to increase the high rated businesses
• "ncreasing the market share
• 6egment wise in depth analysis to gain competitor*s business
• 7hannel wise in depth analysis to gain competitor*s business• 8aying down the processes to ensure the customer is satisfied
I+$ro#"$%o+
The "magery hotel located in $% city offers breathtaking views of the sea perched on
the shore of Bay of Bengal. "magery hotel is a part of renowned hotel chain of "ndia thathas been a domestic market leader closely competing with + more ma)or players. The
brand recall among the travelers is high and customer perception is of high service
standards at a high price.
"magery is the first five star hotel to have appeared in the city in year '' followed bytwo additional competitors following similar price guidelines and similar room
occupancy patterns.
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C#rr!+$ Pro#"$ O--!r%+.'
The "magery hotel is a well known 0 rooms small high end hotelthat not only providesaccommodation facilities to its guests but also a host of other services such as food and
beverage (9ne 7hinese 6pecialty restaurant, one coffee shop and one bar, spa,
healthclub, pool, massage etc. /0: of the revenue share is contributed by the roomdivision sales. 4ll the rooms in the hotel have recently been refurbished and the
technologies have been upgraded to ensure a better guest satisfaction on the product
front.
T/! P/*'%" Pro#"$ ; 4nsoff*s product growth matri# in !+% 2 indicates the
hotel to increase the market penetration. <hile considering the != portfolio matri# (4s
appended in A!+% 2, we should hold our position by holding onto the current shareand margins. "n order to defend our share, following strategies can be applied5
• 1aintaining the customer value
• 1aintaining the market communication
• 7ontinuous product improvementT/! r+ ; The brand of The "magery -otel is well established and gives a high end
lu#ury perception in the market. The parent chain of The "magery -otel uses -ouse
Branding strategy.
#'%+!'' Mr3!$, $r!+' + !!"$! -#$#r!
7ity $%, located on the eastern coast, is a tier + city of "ndia. "t is a ma)or centre for "T
support, >efense, 6hipping, 8ogistics, =#ports and heavy engineering industries with a
large sea port. The city also serves as a ma)or transit point for the smaller industrial
locations and set ups around the area and is about to witness a flurry in hotel developmentwith one additional 0 star hotel aiming to open by the +nd ?uarter of +'' and another two
big hotel pro)ects to be operational by mid of +'+.
Taking in account the past data, domestic feeder markets to the city are 7hennai,
1umbai, >elhi, -yderabad and @olkata. "nternationally, Russia, 6pain, "taly and 7hina,are the ma)or feeder markets. The recent economic meltdown affected all these countries
and thus the business in the sectors like "T support, 8ogistics and 6hipping was affected.
-owever, the hotels managed to sustain due to an increase in the visitors working on the
long term government pro)ects. This however, decreased the hotel 4RRs due to lower entitlement of these visitors (4s declared by the government. "magery hotel believes that
since hotel accommodation service is highly perishable with a shelf life of )ust one day, itneeds to be sold at the highest possible rate for the day, thus it chose to accept the lower rated government businesses in order to accommodate for the lost chunk from higher
paying sectors such as "T support, 6hipping etc and attained market leadership in the city.
A!+% 4 refers to the past performance of the city hotels and industry trends. The city
occupancies have dropped by '0: over the period of last one year due to economic
instability. "n order to sustain, hotels were forced to reduce their prices and thus 4RRs
+
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decreased by ':. 4n overall decrease of +0: has been cited in room revenues in the
city. "magery hotel has shown a 'A: increase in its Rev34R 3remium owing to
following factors5
• "magery hotel decreased 4RR by ': in order to achieve 2: increase in the
market share.
• 7ompetitor ' losing +0: of its market share because of its reluctance incompromising with the rates (7ompetitor ' has increased its 4RR by : over the8ast year.
• 8east degrowth in room revenues of "magery hotel.
• !aining the competitor '*s business ("ncreased by ':
<ith a bumpy economic improvement in =C and an uncertain future of C64 ("1F,
+', the imagery hotel will have to continue with the last year*s strategy. >uring the
economic downturn, the potential of government sector did not suffer (as per the pastrecords available with the hotel. The sector kept contributing '+ rpd in the city (/2: of
the total business for 0 star hotels in the year +'.
ew pro)ects (1a)ority of them being government backed in the city is e#pected toincrease the footfalls in $% city thus generating an increased demand as compared to
8ast %ear (The data collated from various market sources ; Darious 17s, 61=s &
industry development authorities of the state.. >ata shows an upward movement inR3>s from + in + to E in +'. From the data collected, the E footfalls is
e#pected to increase to EA0 in +''.
By +nd ?uarter of +'+, however, 4B7 hotel will open up to add up another '+ room
inventory ("ncreasing the available city supply from +/ rooms to E0 rooms. 4s per the
calculation the overall occupancy percentage may go up by '.+:. The addition of fresh
inventory will allow end user to witness a better playground of bargaining. 4s a result,while 'st ?uarter will show a consistent upward trend in city 4RR, it will start falling with
the advent of +nd ?uarter. -otels will thus have to strive & increase as much revenue as
the possible in the 'st ?uarter itself in order to fill up the deficit that may arise from + nd
uarter of +'' onwards.
E+%ro+!+$
The current environment in the city seems to be highly volatile with following forces
changing the market dynamics on an uncertain basis5
• Po%$%" E+%ro+!+$ ; The current state of politics in the state is highly
unstable with a group of politicians working in order to get the region passed as aseparate state. "n such a case, there might be instances of 1=s pulling off their
investments around the city affecting the hotel business adversely. -owever, oncontrary, since the city will gain a reputation of state capital, it may attract further
investment thus generating business for hotels. The matter is unpredictable and
makes the future highly uncertain.
E
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• E"o+o%" E+%ro+!+$ ; The regional economy is going through the ripples
of economic instability of =C and C64 and affecting the business as discussed
initially.
• So"% E+%ro+!+$ ; The parent hotel chain is run by a trust under a bigger
brand. The trust believes in social causes and donates a part of 3rofit into a charity
that helps the victims of any terrorist attack across the world.• T!"/+oo.%" E+%ro+!+$ ; 7ontinuous improvements and technological
enhancements call for a need of constant updating in order to maintain the product
superiority over competition.
• L!. E+%ro+!+$ ; <ith an unpredictable political future, the legal
environment also is sub)ected to controversy since new legislative regulations willcome into play ones the verdict is given by the government.
• E"oo.%" E+%ro+!+$ ; The hotel has ac?uired various initiatives for
sustainability. 6ome of these are waste reduction, reusing and recycling, constantmonitoring of gas, oil and electricity usage etc.
The environmental factors can further be e#plained on the basis of 3orter*s five forcesmodel in the !+% 5.
2
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S6OT A+*'%'
"magery hotel, on one hand has various advantages to its side that it can leverage to its
advantage, while on other handG it has some disadvantages that need to be looked into.The 6<9T analysis below will discuss the same.
0
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Mr3!$ o!r%!7
"magery hotel currently has si# well defined market segments with eight subsegments as
shown in the model below5
Figure '
=ach of the market segment has been coded (7odes are mentioned ne#t to each segment
for an ease of reference at later stages. The structure of the past segment mi# for competition was also made in year +' ; +'' based on the market feedback, resident
guest feedback, taking information from competition employees, our own employees and
meeting competition guests on various occasions. The data was then verified with themarket figures being shared on a regular basis to prove the genuineness of figures.
Following graphs give a segment mi# of the competitive set in the city in terms of
occupancy level contribution and revenue contribution.
Figure +
/
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S!' + D%'$r%8#$%o+
The segments as mentioned above utiliHe our services from the following distribution
channels (3lease refer to segment codes in 1arket 9verview5
Figure E
M%''%o+, D%r!"$%o+ + O89!"$%!'
The parent company*s vision is to operate E, hotel rooms in E ma)or destinations
across the globe to earn a group turnover of + billion C6> and to maintain marketdominance in each of the locations.
"n line with the parent companies vision, The "magery hotel follows following ob)ectives5
• Financial 9b)ective5 To achieve the budgeted revenues of "R '/0 1illion for the
financial year +'' ; +'+
• 7ompetitive 9b)ective5 To achieve the market dominance by achieving the
highest Rev34R premium in the competitive set.
Tr.!$%+. + Po'%$%o+%+. D!"%'%o+'
Referring the market overview section (Figure +, our targeting and positioning should be
based on different strategies depending on the market segment, viH5
• Coror$!'5 6ince corporate market segment contributes ma#imum share to the
revenues (00: and has the highest paying capacity, hotel should continue to
retain its share. 4nother notable aspect is the historical data that shows the payingcapacity is higher in on egotiated Territory 4ccounts and egotiated ational
4ccounts is higher in comparison to egotiated Territory accounts. 6o the efforts
should be more concentrated on the earlier + subsets. The segment contributesma#imum on weekdays (i.e. 1onday to Friday. 7ompetitor ' has traded off this
A
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segment with groups since the location of the competitor gives it an advantage to
attract leisure groups to fill up on the weekends. The competitor + has traded this
segment with 8ong stay.
• Lo+. S$*5 The imagery hotel has taken a conscious decision to use this segment
as filler so that the gap created by corporates on weekends can be traded off with
this segment. "n case of "magery hotel, this segment contributes to E0:occupancy share but only +: revenue share. There is a huge gap evident in this
case when this figure is compared to the competition figures. 7ompetition hotels
seem to have customers who are paying comparatively more to them. The reasonof the same could be our historical data that shows we do not receive support
from egotiated ational 4ccounts sub segment. This segment has higher paying
capacity and our reports confirm their usage of competitors. The field sales team
will play a ma)or role in identifying the competitor customers in this segment.
• Co+-!r!+"!'5 The imagery hotel has maintained highest share from the
conferences due to the largest conference hall that the hotel built two years ago
within its premises. 6ince the hotel has largest conference hall, it charges a
premium to the guests attending the conference and using its accommodationfacilities. This segment contributes to '0: to occupancy and '0: to the revenue
of The "magery hotel. The strategy of charging slight premium to this segment
will be continued.
• Gro#'5 6ince "magery hotel is a business hotel, the share of groups is lower it.
The highest share for !roups is for 7ompetitor ' due to its location advantage
(8ocated on the beach. "t will be wise not to disturb that segment fromcompetition since The "magery -otel is not fully e?uipped to provide a beach
resort e#perience. -owever, the plans could be taken up by the corporate office at
a later stage to revamp the facilities and connect the hotel directly to one of the
close by beaches.
• E!+$'5 The $% city due to its siHe is not able to attract a lot of events. This isevident in the overall city performance as well. Being a competitive product in
terms of brand value and domestic recognition, "magery hotel can continue
charging a premium to this segment.
• Cr!7: L*o!r5 7ity $% does not have any crew base due to its siHe and
location.
Pro#"$ + r+ D!"%'%o+'
Pro#"$ Mr3!$%+. D!"%'%o+' ; The "magery -otel offers distinct product withe#clusive service levels. Renovation and product upgrade was finished in the +'. "n the
forthcoming year, the hotel plans to promote its product by its improved interiors andestablished service levels. Following aspects will be covered5
• Theme of advertisement and media releases will focus on upgrades done at the
hotel. 7oncentration will be on print media.
• 3rinting of new brochures to be distributed across the hotels in the chain, sales
offices and to be handed over to the ma)or business sources.
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• 9rganiHing familiariHation trip for sales office employees working in different
locations and ma)or business sources in order to showcase the actual product
offering
r+ Mr3!$%+. D!"%'%o+ ; Brand value enhancement to be undertaken in line with the
corporate marketing strategy. 9wing to renovation and product upgrading, brand valuecan be revamped this year to ma#imiHe the room revenue. 9n a local level, the hotel will
get associated with the high end e#clusive shopping arcades, monthly magaHines etc for
)oint promotional activities.
Pr%"%+. D!"%'%o+'
"n line with the overall company strategy, The "magery -otel plans for ': increase in published tariff. The e#pected published tariff is attached in A!+% ;. "t also carries
the pricing template to be followed in order to load rates on all the channels. For
corporate rate negotiations, rate tie up negotiation guidelines are also given in A!+%
;. The hotel has prepared an e#pected demand calendar that considers the past occupancytrends and future Business on Books. 4ccordingly, dynamic discounted price (Rate of the
>ay has been set against each day of the year. The rates are to be loaded on the systemand will be visible on all the distribution channels simultaneously. These rates can be
changed by the hotel as and when re?uired.
C/++! D!"%'%o+'
Figure E shows the distribution system of The "magery -otel. 4s per historical data,
ma#imum revenue for the city hotels is achieved from reservations offices, sales officesand electronic channels (!>6 7hannels. The "magery -otel will attain a strong channel
support by concentrating on following aspects5• S!' O--%"!'5 6ales blitH to the domestic feeder markets to be done by the hotel
sales team. 4n aggressive push is re?uired from 6ales offices to increase the business. For this, new brochures will be helpful.
• GDS C/++!'5 The hotel receives !>6I =lectronic channel booking re?uests
from !alileo, 6abre, <orldspan and 4madeus. 9ut of these, !alileo and 4madeuscontribute ma#imum to the city hotels. "n year +' The "magery hotel received a
fair share of 2/: from !alileo which is highest in the city, however, there is a
scope of improvement in the 4madeus channel wherein the hotel received only
+2: of fair share. "n the year +'', The "magery -otel needs to promote itself more aggressively on 4madeus by )oint marketing programs and tie ups, online
virtual store and channel advertising.
Mr3!$%+. Co#+%"$%o+' D!"%'%o+'
• A!r$%'%+.5 4dvertisements to appear in print media in feeder markets.
4dvertising this year will concentrate on the enhanced product features whichhave been added during the renovation of the hotel.
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• P#8%" R!$%o+'5 3ress meets will be conducted before every food promotion
and will include all publications from the city. The press meet will also be
conducted in order to showcase the renovated rooms to the general public. 7ricketteams that are scheduled to stay with us in 1arch, June, 4ugust and 6eptember
will increase the buHH surrounding the hotel.
• S!' Proo$%o+'5 7hannel selective sales promotion for 4madeus will beinitiated as earlier discussed. FamiliariHation Trip is to be arranged for the ma)or business sources in order to showcase the improved product (4s discussed
earlier.
• P!r'o+ S!%+.5 6ales team will continue to visit the corporate houses and
maintain the relationship with e#isting users (Retention 4ccounts and to flourish
the relationship with the competitor users (-it 4ccounts.
• D%r!"$ Mr3!$%+.5 Reservation department has been given an authoriHation to go
' level below the approved Best 4vailable Rate as mentioned on the >emand7alendar in case they feel the customer is not willing to pay the rate of the day.
C#'$o!r S!r%"! + I+$!r+ Mr3!$%+.
7ustomer Feedback 6ystem is in place as per the corporate office guidelines. 4ll the
feedback as received is being addressed by the !eneral 1anager within +2 hours of
feedback receipt. The practice will continue to be followed. The sales team will send =1ailers to their respective clients about any new activity taking place in the hotel or is
related to the hotel. The sales team will take customer feedback after the sale and feed it
into the online 7ustomer Feedback 6ystem as per the process.
P!o! D!"%'%o+'
The "magery hotel attracts a healthy talent pool due to its brand and generous salaries. "nthe forthcoming year, employees in direct guest contact especially the once from Front
office and reservations will be authoriHed to take their own decisions which is discussed
further in the ne#t section.
Pro"!'' D!"%'%o+'
"n order to make the decision process faster, employees working in the Front 9ffice
>epartment are authoriHed to do the following in order to do customer recovery in case of
a complaint5
• 7harging one slab lower than the Best 4vailable rate of the day.
• "ncluding a breakfastI lunchI dinner complimentary in the rate
• "ncluding a complimentary airport pick upI drop in the rate.
• "ncluding a complimentary fruit basketI cookies platter in the room.
Mr3!$%+. Pro.r'
4 calendar has been prepared for the marketing activities to be conducted in +'' and can
be referred to in A!+% <.
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For!"'$' + F%++"% D!$%'
Budgeted forecasts show room revenue of "R '2 1illion for the Financial %ear +'' ; +'+ with an average occupancy rate of A2:.
APPENDIX 1
The A 3*s 1arketing model
The 6ales and 1arketing plan uses the above A 3 model to attain the ob)ectives asmentioned in the plan.
APPENDIX 2
A+'o--=' M$r%
''
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The 4nsoff*s 1atri# is showing the current hotel positioning in the market. The product
e#ists in an already e#isting market. 6o the strategy should be of market penetration
GE Por$-o%o M$r%
The != 3ortfolio matri# above shows the positioning of the E hotels in the city. The
circles carry the revenue share of each of the hotels. The "magery -otel has a very high
competitive edge but located in an unattractive market due to low demand. Thus, as per
!= portfolio matri#, it falls under Hone +, which suggests following strategy (Maximize profits while maintaining position)5
'+
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APPENDIX 4
'E
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'2
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APPENDIX 5
39RT=R*6 F"D= F9R7=6 448%6"6
Following is an analysis done in order to find the effects of factors on hotel industry inthe city as per 3orter*s 0 forces model5
THREAT OF NE6 ENTRANT
Dery -igh K K -igh K K Mo!r$! K K 8ow K K Dery 8ow
ENTRY ARRIERS NE6 PRO>ECT ATTRACTIONS-igh capital e#penditure and costs 8ong term perspective of increase in
demand
-igh investment recovery time !overnment efforts in creating
attractive environment by tourism promotion channels
3olitical instability in the state >evelopment of corporate and industryenvironment.
=#istence of e#isting brands with a first
mover advantage
ARGAINING PO6ER OF ?YERSDery -igh K K H%./ K K 1oderate K K 8ow K K Dery 8ow
FACTORS DISCO?RAGING THE
C?STOMER TO ARGAIN
FACTORS ENCO?RAGING THE
C?STOMER TO ARGAIN
Top end brand perception. 8ong term business potential
-igh service delivery standards 9verall brand usage of the company
(7ustomer using services at all the
'0
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locations
6uperior product standards Bulk Businesses
3hysical location of the hotel ; "n close pro#imity to client premises ; =asy to
commute.
6iHe of the company using our service.
6imilar pricing structure of competitiveset
1ore supply then demand
=ase of access to senior management
for feedback. 9pportunity to negotiate
effectively in future.
-ighly perishable product
THREAT OF S?STIT?TE
PROD?CTS AND SER@ICES (E! – G#!'$ /o#'!', $!r+$! ""oo$%o+
!$")
Dery -igh K K -igh K K 1oderate K K Lo7 K K Dery 8ow
FACTORS DISCO?RAGING
S?STIT?TES
FACTORS ENCO?RAGING
S?STIT?TES
-igh service standards 7ost consciousness of consumers
-igh brand perception "ncrease in the transit travel
-igh levels of security, cleanliness and
staff training
ARGAINING PO6ER OF S?PPLIERS
Dery -igh K K -igh K K 1oderate K K Lo7 K K Dery 8ow
FACTORS DISCO?RAGING
S?PPLIER ARGAINING PO6ER
FACTORS ENCO?RAGING
S?PPLIER ARGAINING PO6ER
8ong term relationship "ncreasing inflation
Bulk purchasing from suppliers Fle#ibility for supplier in order to meet
demands as per fluctuations
1ore supply then demand
9n analyHing the above five factors, we can establish the given diagram on the basis of
3orter*s Five Forces model.
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APPENDIX ;
'A
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A!+% <
1arketing 4ctivities 7alendar
'
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Go''r*
R3> Rooms 6old per day
4RR L4lso known as 4>R is a statistical unit that is often
used in the lodging industry. The number represents
the average rental income per occupied room in agiven time period. 4>R along with the propertyMs
occupancy are the foundations for the propertyMs
financial performance. The 4>R can be calculated bydividing the room revenue by the number of rooms
soldN (<ikipedia, +'.
9ccupancy L9ccupancy is the percentage of available rooms that
were sold during a specified period of time.9ccupancy is calculated by dividing the number of
rooms sold by rooms availableN (6TR !lobal, +'.
7ompetitive set
L4 competitive set consists of a group of hotels bywhich a property can compare itself to the group*s
aggregate performance. There must be a minimum of
three hotels in any competitive set and a minimum of
four hotels in =urope, e#cluding the sub)ect hotel. To protect proprietary data, a single hotel or brand can
not e#ceed 2: of the competitive set for orth
4merican hotels and 0: for hotels outside of orth4merica. 4 single hotel company (i.e. 1arriott brands,
7hoice brands, etc. may only comprise / percent of
the competitive set room supplyN (6TR !lobal, +'.
1arket 6hare 3ercentage4lso referred to as 9ccupancy 3enetration "nde#. L4ninde# designed to measure a hotelMs share of the
segmentMs (comp set, market, tract, etc. demand
(demand O rooms sold. "t is calculated as5 (-otel
9ccupancy I 6egment 9ccupancy # ' O 9ccupancy"nde#. (6TR !lobal, +'
9ther Revenue
L"ncludes all other revenue e#cluding room revenue
and F&B revenueN (6TR !lobal, +'.
Rev34R (Revenue 3er 4vailable
Room LRevenue per 4vailable Room (Rev34R is the totalguest room revenue divided by the total number of
available rooms. Rev34R differs from 4>R because
Rev34R is affected by the amount of unoccupiedavailable rooms, while 4>R shows only the average
rate of rooms actually soldN (6TR !lobal, +'.
Rev34R 3remium
4lso referred to as Rev34R (%ield "nde#. L4
+
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Rev34R (%ield "nde# measures a hotel*s fair market
share of their segment*s (competitive set, market,
submarket, etc. revenue per available room. "f a hotelis capturing its fair market share, the inde# will be
'G if capturing less than its fair market share, ahotel*s inde# will be less than 'G and if capturingmore than its fair market share, a hotel*s inde# will be
greater than 'N (6TR !lobal, +'.
Room Revenue
LTotal room revenue generated from the sale or rental
of roomsN (6TR !lobal, +'.
%8%o.r/*
"nternational 1onetary Fund, +'. World Economic Outlook 2010, 7hapter +.
<ashington >75 "nternational 1onetary Fund.
6TR !lobal, +'. 4 !uide to our terminology P9nlineQ. 4vailable fromhttp5IIwww.strglobal.comIResourcesI!lossary.asp#R P4ccessed5 'st January +'Q
<ikipedia, +'. 4verage >aily Rate P9nlineQ. 4vailable fromhttp5IIen.wikipedia.orgIwikiI4verageSdailySrate P4ccessed5 'st January +''Q