Sleepy_Hollow

1. Situation Analysis Introduction Sleep Inn Motel is owned and operated by Eng Huang and his wife. He bought the motel two years ago after leaving his job as a production manager. He wanted something that would be less demanding. Huang was very content with his purchase in the beginning. He traveled a lot, so he knew what customers would want in a hotel. He did not want to add a swimming pool or a restaurant because of the amount of stress and work it would take to maintain them. He soon added a continental breakfast. His occupancy rate was a little low, but they never seemed to go above average. As far as marketing and advertisements, all he has are two large signs near the turnoff of the interstate. To avoid competition with the full-service resort motels, Huang lowered his prices by 40 percent. This made his prices more comparable to the lowest-price resort motels. Still Huang was not bringing in a lot of customers. People would come into the parking lot but not register. He does not know whether to make some minor changes or join either the Days Inn or Holiday Inn motel chains. Demand for Product Currently, Huang’s occupancy rates are below average and have been that way for two years. His occupancy rate has been about 55 percent and the average is about 68 percent. There are other hotels in the area that offer more amenities then the Sleep Inn Motel. For example, there is not a swimming pool or a restaurant, and some customers may not want to leave the resort for food or entertainment. This could be a deciding factor between hotels travelers may choose to stay at. Competitive Environment Sleep Inn Motel is located 10 miles from the tourist area with a number of franchised full-service resort motels. There is a Best Western, a Ramada Inn and a Hilton Inn and several mom and pop and limited-service motels. Some of these other resort motels have swimming pools and restaurants and Sleepy Inn Motel does not have either one. At this point the competition is starting to increase and it is becoming fierce. The External Market Environment The current economy has a lot to do with the decline in the number of travelers or maybe their stays are shorter than usual. This would make Sleepy Inn Motel one of the first choices due the recent cut in prices by 40 percent. The internet has made exchanging information easy. If Sleepy Inn Motel does not have a website of another way for reaching their customers then that give them a major disadvantage. This could be one of the reasons for the low occupancy rate. There are a lot of legal requirements that must be met and that come along with running a business. This could be one of the reasons why Huang does not want a swimming pool or restaurants. They would have to make sure they are operating under certain regulations. The social and cultural environment has an effect on customers buying behavior. Currently, the social trend is to spend less and save more. With the unstable economy people do not know if they will lose their jobs. Sleepy Inn Motel has a low affordable price but they need a better way to bring people to their motel. The Product Life Cycle Sleep Inn Motel is currently in the market growth stage but more towards the end of the stage and at the beginning of the market maturity stage. Competition is increasing and sales are starting to decline as more and more hotels open in the area. There were rumors that more motels were being planned for the area. Sleepy Inn Motel cut prices which tend to happen at the beginning for the maturity stage. Promotion costs rise because they more competitors the more the firms have to advertise. The Skills of the Owner Eng Huang traveled a lot and has stayed in many different hotels and motels. He has an idea of what travelers want. He knows that a modern room with a comfortable bed, standard bath facilities, and free cable television would appeal to most customers. He can use his skills from his previous career as production manager to help him manage the Sleepy Inn Motel. The Financial Resources of the Owner The case did not mention any thing about Huang’s finances. It did say that if he were to upgrade some of his facilities, including adding a swimming pool, he would need to raise his prices from $45 per day to $75 per day. 2. Evaluation of Alternatives Option 1 Become a Franchised Hotel, generating improved occupancy rates through central reservations and brand awareness. The nation chains also offer referenced information on their website regarding Huang’s location and rates. Option 2 Consider seeking advice from a full-service Internet marketing hospitality firm experienced in franchised hotel marketing to actively help you launch a local Internet marketing strategy and implement the latest trends and best practices in your Internet marketing efforts so you can realize substantial ROI and revenue growth. Huang should be prepared to spend 10 times more on marketing the website than he spent on the design. Search engine marketing with Yahoo! Sponsored Search costs $1000 plus a month. Option 3 Do It Yourself. Haung’s e-mails do not need to use fancy words. Each just needs to deliver one important message to your readers. This can be done without help from writers or marketers. Just make sure to send messages to people who have freely given their e-mail addresses because they want to get news and see offers at Sleepy Inn Motel. With Huang writing the e-mails it’s sure to establish a personal connection with his customers. Sleepy Inn Motel will launch a comprehensive Local Internet Marketing Strategy and chose a travel agent who provides best online bookings. 3. Recommended Marketing Strategy for Sleepy Inn Motel Target Market The market is segmented into three target populations: 1. First time visitors/tourists 2. Young/old couples without children 3. Families The target market is the tourists and visitors both local and abroad. The city’s economy is boosted by its tourism industry. With this, travelers who are visiting historical sites can be regarded as potential customers. Since the city has been designated a tourist site, more and more tourists are expected to frequently visit the place. Given this probability and the Sleepy Inn Motels lack of a reputation, tourists are likely to select the national brand hotels and resorts. Huang needs a better marketing tool in order to reach his target market of young and older couples who are savvy online consumers. My strategy will increase the occupancy rate and profitability of Sleepy Inn Motel. By launching an independent property website and leaning the proper use e-business, Huang will be able to close the estimated 13% gap in occupancy rate ( 68% Industry – 55% Sleepy Inn).Under the right conditions and with the proper Internet marketing strategy will come significant increase in reservations at Sleepy Inn Motel. The Marketing Mix Promotion Huang’s E-mails will reach the 68% of visitors who are young and older couples without children. Almost 68% of young couples who are smartphone savvy have e-mails sent to their Mobile Phones. A large percent of people use cell phones to access their e-mail. This opens immediate communications and allows for influencing buyers and bringing in business quickly. Instant message delivery within seconds may reach thousands of potential customers. A local Brunswick bowling, for example, can send me an e-mail message advertising a special discount good anytime only because I have signed up for the free email. In turn, this keeps me returning and Brunswick increasing on property foot traffic, allowing add on sales via concession stand, bar, and kids arcade. By segmenting his emailing list, he can send a different message to different people. Delivering specific Sleepy Inn Motel information and offers to different groups depending on their interests, such as where they live. Huang can send information about a specific tourist event that may interest them. When people get e-mails containing relevant news and information, they will actually look forward to receiving more of them. The internet and websites are now becoming methods of exchange between business and clients. It is easier to use and can have lesser problems. One website that gives benefit to people of leisure is the Travelocity.com. This website offers online bookings for more than 700 airlines, 50,000 hotels and over 50 car rental companies, as well a large database of destination and interest information. The website’s most unique feature is the “Fare Watcher” section where one can see the prices on flights one has listed to keep an eye on them. Travelocity.com’s opportunity is its website. Once Huang gets a website up and running for Sleepy Inn Motel, the website of the company can still be improved and given a new look by Travelocity and be made more attractive and informative. Huangs website must be up to the companies standards and able to updates Sleepy Inn Motels information weekly. Travelocity.com will be used as a mother site, allowing more up to date and convenient to use for the clients. Another opportunity for the company is its wide range of travel packages. Adding Sleepy Inn Motel to its local searches, Travelocity can use Huangs site to satisfy the needs of the clients and offer these clients everything that they need to get there. This can also be used to increase the status of Sleepy Inn Motel against its competitors. Lastly an opportunity for the company is the internet constantly being improved to suit the lifestyle of the people. Through the constant innovations made regarding the internet, and increase of savvy internet browsers the clients now have access to the web via handheld devices(Smartphone’s, IPods, and Blackberry’s) . Sending Customer Loyalty email campaigns helps increase booking. Price Price is an inexpensive form of advertising that will attract more potential customers than the road and property signs. Huang will not really need any expensive programs, just a personal computer and an e-mail account. However, there are many time saving software programs that are reasonably priced, easy to learn and use, and include powerful features such as attractive templates. Most offer a free trial, so Huang may wish to experiment with a few of them. Constant Contact has a 60-day free trial, iContact offers 15 days free (prices starting at 15 a month) and MailChimp has a pay-as-you-go plan (beginners and those who manage a small subscriber list are able to use MailChimp free of charge.), so it only costs you when you use it, rather than charging a monthly fee. Product While simple and no nonsense Sleepy Inn Motel's good service, offset location and low cost is a bargain. Rooms run about $80(discounts up to 40%) which should still leave guest enough money to feed the local tourist economy. The rooms are very simple but do not lack in the basic amenities including air conditioning, refrigerators and continental breakfast. Pets are welcome as well. This is an ideal hotel for those who want their pets on vacation, without having them staying home or sleeping in the car. Place Simple, comfortable, away from the hordes of tourist that flock the resort area yet not far from the tourist area, the Sleepy Inn Motel is a great deal. With most hotels that are part of a large chain seem to be, designed, constructed and managed in very similar ways. It is sometimes difficult to remember where you are without reading the rate card on the door. That is why Sleepy Inn Motel is independently own and operated by Eng Huang. Who believes in a less demanding lifestyle, so he is easy going on your pocket! 4. Implementation and Control Send messages to people who have freely given you their e-mail addresses because they want to get news and see offers from you. Does it get any better than that' Your emails “speak” to an audience that already knows your hotel, amenities and services, or is at least familiar with your website. Test each of the addresses by e-mailing the account holder asking if it's OK to send e-mails to them. This confirms that they have chosen to receive communications from you. Most software programs automatically take care of this opt-in feature for you; Creating and maintaining “conversations” with your local customers (e.g. asking them for testimonials, photos, etc.) To see how effective your email marketing is at attracting buyers to your motel, take a look at your email statistics in accounts management ten most recent email messages, there Huang will find on the "Email Marketing" page. If you've sent email in the past, you can see the number of recipients, the number of recipients who opened the email, the date it was sent, the status, and any associated charges. There are a few ratios that may help Huang in tracking his success. 1. Deliverability: This metric gives you the picture of how many emails were successfully sent out by your email marketing software or provider. Deliverability = ((Number of Email Addresses Sent - Number of Email Addresses Bounced) /Number of Email Addresses Sent) * 100% 2. Detailed Domain Report: Just getting a consolidated report of emails delivered across all of the domains is not enough for a marketer. Marketer has to get a detailed report of the performance of the email marketing software on how many emails were sent successfully to each of the domains or ISPs (Gmail, Yahoo, MSN, AOL, etc.), how many were rejected, how many were blocked, what was the number of spam complaints etc. This requires your email marketing software or provider has to work with the ISPs to get these. If they do not, they may not have a relation with the ISPs and have a feedback loop for you to take further action. If you don’t have visibility to abuse complaints of your ISPs and your email marketing provider doesn’t provide them, your reputation will be badly hurt as you can’t take action on those proactively. 3. Opening Rate: This metric gives you the number of recipients who opened the email message. Open Rate = (Number of Emails Opened / (Number of Emails Sent - Number of Emails Bounced)) * 100% 4. Click Through Rate (CTR): This is a measure of the action of the recipient seeking more information by clicking the links embedded in the email message sent. This is a measure of the interest of the recipient. It doesn’t necessarily convert to a sale or registration, but it is a step closer. CTR = (Number of unique Emails clicked / (Number of Emails Sent - Number of Emails Bounced)) * 100% 5. Unsubscribe Rate: This is the number of unique email addresses that do not want further emails from you. They didn’t have an interest in your message so they unsubscribed. Unsubscribe rates are key to recognizing whether or not your content sucks. Just as important, though, is calculating when people unsubscribe. Perhaps it’s on the 2nd email or perhaps it’s the 4th… you need to figure that out and ensure that you provide some great content, especially at danger points when people are more likely to unsubscribe. Unsubscribe Rate = (Number of Email Addresses who unsubscribed / (Number of Email Addresses Sent - Number of Email Addresses Bounced)) * 100% Instead of taking an ax to your marketing budget, consider first how your budget is allocated and move some resources to marketing activities that yield a higher ROI. One such low-cost, high-ROI marketing activity is email marketing. In fact, a 2008 Direct Marketing Association (DMA) study found that email's ROI in 2008 was $45.06 for every dollar spent on it.